424B3
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Filed pursuant to Rule 424(b)(3)
Registration No. 333-237515

 

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

April 2, 2020

Dear Stockholder:

As previously announced, on January 15, 2020, Neon Therapeutics, Inc., or Neon, entered into an Agreement and Plan of Merger, or, as amended, modified or otherwise supplemented from time to time, the Merger Agreement, with BioNTech SE, a Societas Europaea organized and existing under the laws of Germany, or BioNTech and Endor Lights, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of BioNTech, or Merger Sub. Under the Merger Agreement, Merger Sub will merge with and into Neon, with Neon continuing as the surviving corporation and a wholly-owned subsidiary of BioNTech, or the Merger. Before Neon completes the Merger, Neon stockholders must approve and adopt the Merger Agreement. Neon stockholders will vote to approve and adopt the Merger Agreement and approve related matters as more fully described in this proxy statement/prospectus at Neon’s virtual special meeting of stockholders, which will be held on May 4, 2020, at 10:00 a.m. Eastern Time, or the Neon Special Meeting. In light of COVID-19 (coronavirus) and to support the well-being of our stockholders and partners, the Neon Special Meeting will be completely virtual. You may attend the meeting, submit questions and vote your shares electronically during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/NTGN2020. You will need the control number that is printed on your proxy card to enter the Neon Special Meeting. We recommend that you log in at least 15 minutes before the meeting to ensure you are logged in when the Neon Special Meeting starts. Please note that you will not be able to attend the Neon Special Meeting in person.

If the Merger is completed, each share of Neon common stock, par value $0.001 per share, or the Neon common stock, that was issued and outstanding immediately prior to the effective time of the Merger, excluding shares owned by the parties to the Merger Agreement, will be converted into the right to receive 0.063 American Depositary Shares of BioNTech, or the BioNTech ADSs, and such number of BioNTech ADSs, referred to as the Exchange Ratio, without interest, but subject to any withholding under applicable law, plus the right, if any, to receive cash in lieu of fractional shares of BioNTech ADSs, or collectively, the Merger Consideration. Although the Exchange Ratio for the Merger Consideration is fixed, the market value of the Merger Consideration will fluctuate with the market price of the BioNTech ADSs. Based on the closing price of the BioNTech ADSs on January 15, 2020, the last trading day before the public announcement of the signing of the Merger Agreement, the implied aggregate value of the Merger Consideration is approximately $67 million, or $2.18 per share of Neon common stock. Based on the closing price of the BioNTech ADSs on March 26, 2020, the last practicable date before the date of this proxy statement/prospectus, the implied aggregate value of the Merger Consideration will be up to approximately $107.2 million, or $3.47 per share of Neon common stock, depending on the number of options to purchase Neon common stock exercised prior to the closing of the Merger. We urge you to obtain current market quotations of the BioNTech ADSs and Neon common stock.

BioNTech estimates that it may issue up to approximately 1,949,458 BioNTech ADSs to Neon stockholders in the Merger pursuant to the Merger Agreement. The BioNTech ADSs and the shares of Neon common stock are each listed on the Nasdaq Global Select Market, or Nasdaq, under the trading symbols “BNTX” and “NTGN,” respectively. Upon completion of the Merger, Neon will no longer be a publicly held corporation, so shares of Neon common stock will be delisted from Nasdaq and Neon will stop filing periodic reports with the United States Securities and Exchange Commission, or the SEC.

At the Neon Special Meeting, Neon stockholders will be asked to consider and vote on: (i) a proposal to approve and adopt the Merger Agreement, or the Merger Proposal; and (ii) a proposal to approve the adjournment of the Neon Special Meeting, if necessary or appropriate, to solicit additional proxies in favor of approval of the Merger Proposal, or the Adjournment Proposal.

The record date for determining the Neon stockholders entitled to receive notice of, and to vote at, the Neon Special Meeting is March 23, 2020. Only Neon stockholders of record at that time are entitled to notice of, and to vote at, the Neon Special Meeting, or any adjournment or postponement of the Neon Special Meeting. The


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Merger cannot be completed unless, among other matters, Neon stockholders approve the Merger Proposal by the affirmative vote of holders of a majority of the outstanding shares of Neon common stock entitled to vote on such matter.

The Neon board of directors, or the Neon Board, unanimously (1) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, were in the best interests of Neon stockholders; (2) approved and declared advisable the Merger Agreement and the transactions contemplated thereby in accordance with the requirements of the Delaware General Corporation Law; and (3) recommended that Neon stockholders approve and adopt the Merger Agreement at the Neon Special Meeting. The Neon Board unanimously recommends that Neon stockholders vote “FOR” the Merger Proposal and “FOR” the Adjournment Proposal.

Your vote is important. Whether or not you expect to attend the Neon Special Meeting online, we urge you to vote your shares of Neon common stock as promptly as possible by (1) accessing the Internet website specified on your proxy card; (2) calling the toll-free number specified on your proxy card; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares of Neon common stock may be represented and voted at the Neon Special Meeting. If your shares of Neon common stock are held in the name of a bank, broker or other fiduciary, please follow the instructions on the voting instruction card furnished by the record holder.

The obligations of Neon and BioNTech to complete the Merger are subject to the satisfaction or waiver of several conditions set forth in the Merger Agreement. More information about Neon, BioNTech and the Merger is contained in this proxy statement/prospectus. Please read this entire proxy statement/prospectus carefully, including “Risk Factors” located elsewhere in this proxy statement/prospectus.

Sincerely,

 

LOGO

Hugh O’Dowd

President and Chief Executive Officer

Neither the SEC nor any state securities commission has approved or disapproved the Merger described in this proxy statement/prospectus, or the issuance of the BioNTech ADSs in connection with the Merger, or passed upon the accuracy or adequacy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated April 2, 2020 and is first being mailed to the stockholders of Neon on or about April 3, 2020.


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LOGO

Neon Therapeutics, Inc.

40 Erie St., Suite 110

Cambridge, MA 02139

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held on May 4, 2020

Notice is hereby given that Neon Therapeutics, Inc., or Neon, will hold a special meeting of stockholders on May 4, 2020, at 10:00 a.m. Eastern Time, or the Neon Special Meeting. You may attend the Neon Special Meeting, submit questions and vote your shares electronically during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/NTGN2020. You will need the control number that is printed on your proxy card to enter the Neon Special Meeting. We recommend that you log in at least 15 minutes before the meeting to ensure you are logged in when the meeting starts. Please note that you will not be able to attend the Neon Special Meeting in person. The Neon Special Meeting will be held for the purpose of allowing stockholders of Neon to consider and vote upon the following matters:

 

   

a proposal to approve and adopt the Agreement and Plan of Merger, dated as of January 15, 2020, or as amended, modified or otherwise supplemented from time to time, the Merger Agreement, by and among Neon, BioNTech SE, or BioNTech, and Endor Lights, Inc., or Merger Sub, pursuant to which Merger Sub will merge with and into Neon, with Neon continuing as the surviving corporation and as a wholly-owned subsidiary of BioNTech, or the Merger, as more fully described in the attached proxy statement/prospectus, or the Merger Proposal; and

 

   

a proposal to approve the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies in favor of approval of the Merger Proposal, or the Adjournment Proposal.

The Merger cannot be completed unless, among other matters, Neon stockholders approve the Merger Proposal by the affirmative vote of holders of a majority of the shares of outstanding Neon common stock, par value $0.001 per share, or Neon common stock, entitled to vote on such matter. The Merger Proposal is described in more detail in the accompanying proxy statement/prospectus, which you should read carefully in its entirety before you vote. A copy of the Merger Agreement is attached as Annex A to the accompanying proxy statement/prospectus.

The record date for determining the Neon stockholders entitled to receive notice of, and to vote at, the Neon Special Meeting is March 23, 2020. Only Neon stockholders of record at that time are entitled to notice of, and to vote at, the Neon Special Meeting, or any adjournment or postponement of the Neon Special Meeting.

Your vote is important. Whether or not you expect to attend the Neon Special Meeting online, we urge you to vote your shares of Neon common stock as promptly as possible by (1) accessing the Internet website specified on your proxy card; (2) calling the toll-free number specified on your proxy card; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares of Neon common stock may be represented and voted at the Neon Special Meeting. If your shares of Neon common stock are held in the name of a bank, broker or other fiduciary, please follow the instructions on the voting instruction card furnished by the record holder.

The Neon Board unanimously (1) determined that the Merger Agreement and the Transactions contemplated hereby, including the Merger, upon the terms and subject to the conditions set forth therein, were in the best interests of Neon stockholders; (2) approved and declared advisable the Merger Agreement and the transactions contemplated thereby in accordance with the requirements of the Delaware General Corporation Law; and (3)


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recommended that Neon stockholders approve and adopt the Merger Agreement at the Neon Special Meeting. The Neon Board unanimously recommends that Neon stockholders vote “FOR” the Merger Proposal and “FOR” the Adjournment Proposal.

BY ORDER OF THE BOARD OF DIRECTORS

 

LOGO

Hugh O’Dowd

President and Chief Executive Officer

April 2, 2020

Cambridge, Massachusetts


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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This proxy statement/prospectus, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission, or the SEC, by BioNTech SE, or BioNTech, constitutes a prospectus of BioNTech under Section 5 of the Securities Act of 1933, as amended, or the Act or the Securities Act, with respect to the ordinary shares, each of no par value, in the share capital of BioNTech, or the BioNTech Shares or a BioNTech Share, which will be represented by American Depositary Shares of BioNTech, or the BioNTech ADSs or the ADSs, to be issued to stockholders of Neon Therapeutics, Inc., or Neon, pursuant to the merger of Endor Lights, Inc., a wholly-owned subsidiary of BioNTech, with and into Neon, with Neon continuing as the surviving corporation in the merger and a wholly-owned subsidiary of BioNTech, or the Merger. This proxy statement/prospectus also constitutes a proxy statement of Neon under Section 14(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and constitutes a notice of meeting with respect to a special meeting of Neon stockholders, or the Neon Special Meeting.

No person has been authorized to provide you with information that is different from that which is contained in this proxy statement/prospectus. BioNTech and Neon take no responsibility for, and can provide no assurances as to the reliability of, any other information that others may give you and, if given, such information must not be relied upon as having been authorized. This proxy statement/prospectus is dated April 2, 2020. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than that date. Neither the mailing of this proxy statement/prospectus to Neon stockholders nor the issuance by BioNTech of the BioNTech ADSs in connection with the Merger will create any implication to the contrary.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation. Information contained in this proxy statement/prospectus regarding BioNTech has been provided by BioNTech and information contained in this proxy statement/prospectus regarding Neon has been provided by Neon.

Neither BioNTech shareholders nor Neon stockholders should construe the contents of this proxy statement/prospectus as legal, tax or financial advice. BioNTech shareholders and Neon stockholders should consult with their own legal, tax, financial or other professional advisors. All summaries of, and references to, the agreements governing the terms of the transactions described in this proxy statement/prospectus are qualified by the full copies of and complete text of such agreements in the forms attached hereto as annexes.

Neither the SEC nor any state securities commission has approved or disapproved the Merger described in this proxy statement/prospectus, the issuance of the BioNTech ADSs in connection with the Merger, or passed upon the accuracy or adequacy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense. For the avoidance of doubt, this proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom or from whom it is unlawful to make any such offer or solicitation in that jurisdiction.

 

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LOGO

Neon Therapeutics, Inc.

Attention: Corporate Secretary

40 Erie Street, Suite 110

Cambridge, Massachusetts 02139

Telephone number: (617) 337-4701

In addition, if you have questions about the Merger, the Neon Special Meeting, or the proposals to be considered at the Neon Special Meeting, need additional copies of this document and the annexes to this document or need to obtain proxy cards or other information related to the proxy solicitation, you may contact Neon’s proxy solicitor, Innisfree M&A Incorporated, or Innisfree, at the following address and telephone number:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Stockholders Call: (888) 750-5834

Banks and Brokers Call: (212) 750-5833

In order for Neon stockholders to receive timely delivery of the documents in advance of the Neon Special Meeting, Neon stockholders must request the documents no later than April 27, 2020.

INDUSTRY AND MARKET DATA

This proxy statement/prospectus contains industry, market and competitive position data that are based on industry publications and studies conducted by third parties as well as BioNTech’s own internal estimates and research. These industry publications and third-party studies generally state that the information they contain has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While BioNTech believes that each of these publications and third-party studies is reliable, BioNTech has not independently verified the market and industry data obtained from these third-party sources. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements contained in this proxy statement/prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause results to differ materially from those expressed in BioNTech’s forecasts or estimates or those of independent third parties. While BioNTech believes its internal research is reliable and the definitions of its market and industry are appropriate, neither such research nor these definitions have been verified by any independent source.

PRESENTATION OF FINANCIAL INFORMATION

This proxy statement/prospectus includes BioNTech’s audited consolidated financial statements as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017, which have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, which differ in certain significant respects from U.S. generally accepted accounting principles, or U.S. GAAP.

 

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BioNTech’s financial information is presented in Euros. For the convenience of the reader, BioNTech has translated some of its financial information into U.S. dollars. Unless otherwise indicated, these translations were made at the rate of €1.00 to $1.1026, the noon buying rate of the Federal Reserve Bank of New York on January 24, 2020. Such U.S. dollar amounts are not necessarily indicative of the amounts of U.S. dollars that could actually have been purchased upon exchange of Euros at the dates indicated. All references in this proxy statement/prospectus to “$” mean U.S. dollars and all references to “€” mean Euros.

BioNTech has made rounding adjustments to some of the figures contained in this proxy statement/prospectus. Accordingly, numerical figures shown as totals in some tables may not be exact arithmetic aggregations of the figures that preceded them.

TRADEMARKS, SERVICE MARKS AND TRADENAMES

The BioNTech SE logo, FixVac®, RiboMab®, RiboCytokine®, MammaTyper® and other trademarks or service marks of BioNTech appearing in this proxy statement/prospectus are the property of BioNTech. Solely for convenience, some of the trademarks, service marks, logos and trade names referred to in this proxy statement/prospectus are presented without the ® and symbols, but such references are not intended to indicate, in any way, that BioNTech will not assert, to the fullest extent under applicable law, its rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This proxy statement/prospectus contains additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this proxy statement/prospectus are, to BioNTech’s knowledge, the property of their respective owners. BioNTech does not intend its use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of BioNTech by, any other companies.

 

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Questions and Answers About the Merger and the Neon Special Meeting

     1  

Summary

     8  

Information about the Companies

     8  

Summary of the Merger

     10  

Merger Consideration

     10  

Treatment of Neon Options, Neon Units and Neon Restricted Stock

     10  

Risk Factors

     11  

The Neon Special Meeting

     11  

Share Ownership and Voting by Neon Directors and Executive Officers

     11  

Recommendation of the Neon Board and its Reasons for the Merger

     11  

Opinion of Neon’s Financial Advisor

     12  

Accounting Treatment

     12  

Regulatory Approvals Required for the Merger

     12  

Appraisal Rights

     12  

Interests of Neon’s Directors and Executive Officers in the Merger

     12  

Board of Directors and Senior Management of the Combined Company

     13  

BioNTech’s Reasons for the Merger

     13  

Listing of the BioNTech ADSs

     13  

Delisting and Deregistration of Neon Common Stock

     13  

Litigation Related to the Merger

     13  

The Merger Agreement

     14  

No Solicitation of Offers

     14  

Change of Recommendation

     16  

Indemnification and Insurance

     17  

Conditions to Closing

     17  

Termination Events

     19  

Termination Fees

     20  

Material U.S. Federal Income Tax Considerations

     20  

Material German Tax Considerations

     21  

Comparison of Shareholder Rights

     21  

Selected Consolidated Financial Data of BioNTech

     22  

Selected Consolidated Financial Data of Neon

     23  

Unaudited Pro Forma Condensed Combined Financial Information

     24  

Unaudited Comparative Historical and Pro Forma Per Share Data

     31  

Comparative Per Share Market Price and Dividend Information

     33  

Cautionary Statement Regarding Forward-Looking Statements

     35  

Risk Factors

     37  

Risk Factors Related to the Merger

     37  

Risk Factors Related to the Combined Company

     41  

Risk Factors Related to the BioNTech ADSs

     42  

Risk Factors Related to BioNTech’s Business

     53  

Risk Factors Related to Neon’s Business

     126  

The Neon Special Meeting

     190  

Date, Time and Place of the Neon Special Meeting

     190  

Purpose of the Neon Special Meeting

     190  

Recommendation of the Neon Board

     190  

Record Date for the Neon Special Meeting; Stock Entitled to Vote

     190  

Quorum; Abstentions and Broker Non-Votes

     190  

Neon Voting Agreements

     191  

How to Vote

     191  

 

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Voting of Proxies

     192  

Revoking Your Proxy

     192  

Attending the Neon Special Meeting

     192  

Adjournments and Postponements

     193  

Housekeeping of Stockholder Materials

     193  

Solicitation of Proxies

     193  

Proposal 1: The Merger Proposal

     194  

Proposal 2: The Adjournment Proposal

     194  

The Merger

     196  

Summary of the Merger

     196  

Background of the Merger

     196  

Neon’s Reasons for the Merger

     208  

Certain Prospective Financial Information Reviewed by the Neon Board and Neon’s Financial Advisor

     210  

Opinion of Neon’s Financial Advisor

     213  

Board of Directors and Senior Management of the Combined Company

     219  

Accounting Treatment

     219  

Interests of Neon’s Directors and Executive Officers in the Merger

     220  

Treatment of Neon Options, Neon Units and Neon Restricted Stock

     222  

BioNTech’s Reasons for the Merger

     223  

Listing of the BioNTech ADSs

     224  

Delisting and Deregistration of Neon Common Stock

     224  

Restrictions on Sales of BioNTech ADSs Received in the Merger

     224  

Litigation Related to the Merger

     224  

Regulatory Approvals Required for the Merger

     224  

Appraisal Rights

     224  

The Merger Agreement

     225  

The Merger

     225  

Merger Consideration

     225  

Treatment of Neon Options, Neon Units, Neon Restricted Stock and ESPP

     226  

Closing and Effective Time

     227  

Conversion of Shares

     227  

Share Exchange; Letter of Transmittal

     227  

Withholding

     228  

Dividends and Distributions

     228  

Representations and Warranties of BioNTech, Merger Sub and Neon

     229  

Material Adverse Effect

     231  

Restrictions on Neon’s Business Pending the Closing of the Merger

     232  

Restrictions on BioNTech’s Business Pending the Closing of the Merger

     234  

Agreement Not to Solicit Other Offers

     234  

Neon’s Board Recommendation

     236  

Preparation of the Form F-4 and the Proxy Statement; Neon Special Meeting

     237  

Indemnification and Insurance

     238  

Regulatory Filings

     239  

Other Agreements

     239  

Conditions to Closing

     239  

Termination Events

     241  

Termination Fees

     242  

Effect of Termination

     243  

Expenses

     243  

Amendment

     243  

Governing Law; Jurisdiction; Waiver of Trial by Jury

     243  

Specific Performance

     244  

 

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Business of BioNTech and Certain Information About BioNTech

     245  

BioNTech Management

     368  

Beneficial Ownership of Certain Shareholders of BioNTech and the BioNTech Board

     381  

Related Party Transactions

     383  

BioNTech’s Management’s Discussions and Analysis of Financial Condition and Results of Operations of BioNTech

     385  

Business of Neon and Certain Information About Neon

     408  

Neon’s Management’s Discussion and Analysis of Financial Condition and Results of Operations of Neon

     446  

Neon Security Ownership of Certain Beneficial Owners and Management

     459  

Certain Material U.S. Federal Income Tax Considerations

     462  

Material German Tax Considerations

     466  

Description of BioNTech Share Capital and Articles of Association (Satzung)

     473  

Description of the BioNTech ADSs

     488  

Comparison of Shareholder Rights

     496  

Exchange Controls

     516  

Submission of Stockholder Proposals

     517  

Other Business at the Neon Special Meeting

     517  

Legal Matters

     517  

Experts

     518  

Service of Process and Enforcement of Judgments

     518  

Where You Can Find More Information

     519  

Index to Consolidated Financial Statements

     F-1  

Annex A: Agreement and Plan of Merger

     A-1  

Annex B: Voting Agreement

     B-1  

Annex C: Opinion of Neon’s Financial Advisor

     C-1  

 

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE NEON SPECIAL MEETING

The following questions and answers address briefly some questions you may have regarding the Merger and the Neon Special Meeting. These questions and answers may not address all questions that may be important to you. Please refer to the more detailed information contained elsewhere in this proxy statement/prospectus, as well as the additional documents referred to in this proxy statement/prospectus.

General Questions and Answers about the Merger

What is the proposed transaction on which I am being asked to vote?

You are being asked to vote to approve and adopt the Agreement and Plan of Merger, dated as of January 15, 2020, or as may be further amended from time to time, the Merger Agreement, entered into by and among BioNTech SE, a Societas Europaea organized and existing under the laws of Germany, or BioNTech, Endor Lights, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of BioNTech, or Merger Sub, and Neon Therapeutics, Inc., a Delaware corporation, or Neon. A copy of the Merger Agreement is included as Annex A to this proxy statement/prospectus. Pursuant to the Merger Agreement, Merger Sub will merge with and into Neon, with Neon surviving the merger as a wholly-owned subsidiary of BioNTech, or the Merger. Following the Merger, Neon will no longer be a publicly traded corporation. BioNTech and its subsidiaries following the Merger, including Neon, are referred to in this proxy statement/prospectus as the Combined Company.

Why am I receiving this document and why am I being asked to vote on the Merger Agreement?

BioNTech has agreed to acquire Neon under the terms of the Merger Agreement that are described in this proxy statement/prospectus. If the Merger Proposal is approved by Neon stockholders and the other conditions to closing under the Merger Agreement are satisfied or waived, Merger Sub will merge with and into Neon, with Neon surviving the Merger as a wholly owned subsidiary of BioNTech. As a result of the Merger, Neon will no longer be a publicly held corporation. Following the Merger, shares of Neon common stock will be delisted from the Nasdaq Global Select Market, or Nasdaq, and deregistered under the Exchange Act, and Neon will no longer file periodic reports with the SEC.

This proxy statement/prospectus includes important information about the Merger, the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus, the form of voting agreement, a copy of which is attached as Annex B to this proxy statement/prospectus, and the Neon Special Meeting. Neon stockholders should read this information carefully and in its entirety. The enclosed voting materials allow stockholders to vote their shares without attending the special meeting in person.

Is my vote important?

Your vote is important. Whether or not you expect to attend the Neon Special Meeting online, we urge you to vote your shares of Neon common stock as promptly as possible by: (1) accessing the Internet website specified on your proxy card; (2) calling the toll-free number specified on your proxy card; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares of Neon common stock may be represented and voted at the Neon Special Meeting. If your shares of Neon common stock are held in the name of a bank, broker or other fiduciary, please follow the instructions on the voting instruction card furnished by the record holder.

What will Neon stockholders receive in the Merger?

If the Merger is completed, each share of Neon common stock that was issued and outstanding immediately prior to the effective time of the Merger, or the Effective Time, excluding shares owned by the parties to the

 

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Merger Agreement, will be converted into the right to receive 0.063 American Depositary Shares of BioNTech, or the BioNTech ADSs, and such number of BioNTech ADSs, referred to as the Exchange Ratio, without interest, but subject to any withholding under applicable law, plus the right, if any, to receive cash in lieu of fractional shares of BioNTech ADSs, or, collectively, the Merger Consideration. Although the Exchange Ratio for the Merger Consideration is fixed, the market value of the Merger Consideration will fluctuate with the market price of the BioNTech ADSs. Based on the closing price of the BioNTech ADSs on January 15, 2020, the last trading day before the public announcement of the signing of the Merger Agreement, the implied aggregate value of the Merger Consideration is approximately $67 million, or $2.18 per share of Neon common stock. Based on the closing price of the BioNTech ADSs on March 26, 2020, the last practicable date before the date of this proxy statement/prospectus, the implied aggregate value of the Merger Consideration will be up to approximately $107.2 million, or $3.47 per share of Neon common stock, depending on the number of options to purchase Neon common stock exercised prior to the closing of the Merger.

After the Merger, how much of the Combined Company will Neon stockholders own?

As of immediately following the Effective Time, former Neon stockholders are expected to own approximately 0.85% of the outstanding equity interests of the Combined Company on an undiluted basis.

Can the value of the Merger Consideration change between now and the time the Merger is consummated?

Yes. Although the Exchange Ratio is fixed, the value of the Merger Consideration will fluctuate between the date of this proxy statement/prospectus and the completion of the Merger based on the market value of BioNTech ADSs. Any change in the market price of BioNTech ADSs after the date of this proxy statement/prospectus will change the value of the Merger Consideration that Neon stockholders will receive.

What will happen to my Neon options, Neon restricted stock units, and/or Neon restricted stock in the Merger?

Neon Options

At the Effective Time, each stock option to acquire shares of Neon common stock pursuant to the Neon 2015 Stock Option and Grant Plan or the Neon 2018 Stock Option and Incentive Plan, as applicable, or collectively, the Neon Equity Plans, which is outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, or each, a Neon Option, will be automatically cancelled and converted into the right to receive, as soon as reasonably practicable after the Effective Time (but no later than ten business days thereafter), a cash payment equal to (i) the excess, if any, of the Cash Merger Consideration over the applicable per-share exercise price of such cancelled Neon Option, multiplied by (ii) the number of shares of Neon common stock subject to such Neon Option immediately prior to such cancellation. Each Neon Option that has a per-share exercise price that is equal to or greater than the Cash Merger Consideration shall be cancelled at the Effective Time for no consideration. No Neon Options will remain outstanding following the consummation of the Merger. “Cash Merger Consideration” means the product of the volume weighted average price of one BioNTech ADS for the ten trading days immediately prior to the second business day prior to the date of the closing of the Merger, starting with the opening of trading on the first trading day to the closing of the second to last trading day prior to the date of closing of the Merger, as reported by Bloomberg, multiplied by the Exchange Ratio.

Neon Units

At the Effective Time, each restricted stock unit granted under the Neon Equity Plans and held by a current Neon employee that is outstanding immediately prior to the Effective Time, or each, a Neon Unit, shall vest in full and be cancelled and converted into the right to receive from the Company Trust (as defined below) as soon as reasonably practicable after the Effective Time (but no later than five business days thereafter) the Merger Consideration for each share of Neon common stock underlying each such Neon Unit. No Neon Units will remain outstanding following the consummation of the Merger.

Prior to the Effective Time, Neon shall establish a trust (which will not be affiliated with either BioNTech or Neon) to hold shares of Neon common stock (before the Merger and BioNTech ADSs thereafter), or the

 

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Company Trust. Prior to the Effective Time, Neon shall issue and deliver to the Company Trust such number of shares of Neon common stock as is necessary to satisfy the obligations under all Neon Units outstanding as of immediately prior to the Effective Time.

Neon Restricted Stock

At the Effective Time, each share of Neon common stock that is subject to a risk of forfeiture or repurchase by Neon, whether subject to time- or performance-based vesting and whether granted by Neon pursuant to the Neon Equity Plans or otherwise issued or granted, or each, a share of Neon Restricted Stock, which is outstanding immediately prior to the Effective Time, shall vest in full and be cancelled and converted into the right to receive the Merger Consideration in the same manner as other outstanding shares of Neon common stock.

What is a BioNTech ADS?

A BioNTech ADS is an American Depositary Share, which is a security that allows persons in the United States to more easily hold and trade interests in companies incorporated or organized outside of the United States. BioNTech is a Societas Europaea organized and existing under the laws of Germany that issues ordinary shares that are equivalent in many respects to the common stock of a U.S. company. See “Comparison of Shareholder Rights” located elsewhere in this proxy statement/prospectus for a discussion of the differences between shares of Neon common stock and BioNTech Shares. Each BioNTech ADS represents one BioNTech Share. BioNTech has applied to list the BioNTech ADSs on Nasdaq, under the symbol “BNTX.” The Bank of New York Mellon is the depositary of the BioNTech Shares underlying the BioNTech ADSs and will be responsible for issuing BioNTech ADSs to Neon stockholders in the Merger.

Will Neon stockholders be able to trade the BioNTech ADSs that they receive in the transaction?

Yes. BioNTech has applied to list the BioNTech ADSs on Nasdaq under the symbol “BNTX.” BioNTech ADSs received in exchange for shares of Neon common stock in the transaction will be freely transferable under United States federal securities laws. BioNTech ADSs will be listed for trading, and be quoted, in U.S. dollars.

Can I receive BioNTech Shares in the Merger instead of BioNTech ADSs?

No. However, you may turn in your BioNTech ADSs at the depositary’s corporate office or by providing appropriate instructions to your broker. Upon payment of the fees provided in the deposit agreement and any applicable taxes, the depositary will deliver to you the BioNTech Shares underlying your BioNTech ADSs held on deposit by the custodian.

What are the material U.S. federal income tax considerations of the Merger for U.S. holders of shares of Neon common stock?

It is intended that, for U.S. federal income tax purposes, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. If the Merger qualifies for such intended tax treatment, a U.S. holder (as defined under “Certain Material U.S. Federal Income Tax Considerations”) generally will not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of such holder’s shares of Neon common stock for BioNTech ADSs in the Merger, except that such holder of Neon common stock may recognize gain or loss with respect to cash received in lieu of a fractional BioNTech ADSs.

You should read “Certain Material U.S. Federal Income Tax Considerations” located elsewhere in this proxy statement/prospectus for a more complete summary of the U.S. federal income tax considerations of the Merger to U.S. holders of shares of Neon common stock. Tax matters can be complicated, and the tax consequences of the merger to you will depend on your particular situation. You should consult your tax advisor to determine the tax consequences of the Merger to you.

 

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What are the material German tax considerations of owning BioNTech ADSs for me?

You are referred to “Material German Tax Considerations” located elsewhere in this proxy statement/prospectus for a summary of the anticipated material German tax considerations of ownership of BioNTech ADSs. You are urged to consult with your own tax advisor for a full understanding of the German tax considerations to you of owning BioNTech ADSs.

When is the Merger expected to be completed?

BioNTech and Neon expect to complete the Merger promptly after Neon receives, at the Neon Special Meeting, an affirmative vote in favor of the approval and adoption of the Merger Agreement by holders of a majority of the shares of Neon common stock entitled to vote at the Neon Special Meeting, or the Neon Stockholder Approval. BioNTech and Neon currently anticipate that the Merger will occur during the second quarter of 2020. However, neither BioNTech nor Neon can predict the exact timing of the completion of the Merger because the Merger is subject to certain other conditions to closing as set forth in the Merger Agreement. See “The Merger Agreement—Conditions to Closing” located elsewhere in this proxy statement/prospectus.

What is required to complete the Merger?

Each of BioNTech’s and Neon’s obligation to consummate the Merger is subject to a number of conditions specified in the Merger Agreement, including, among other customary conditions (i) the approval and adoption of the Merger Agreement by Neon stockholders, (ii) the absence of an enacted or promulgated law by any federal or state governmental entity of competent jurisdiction that precludes, restrains, enjoins or prohibits the consummation of the Merger, (iii) the absence of any temporary restraining order, preliminary or permanent injunction or any other order preventing the consummation of the Merger and any law that makes illegal the consummation of the Merger, (iv) the SEC having declared effective a registration statement on Form F-4 to be filed with the SEC and the absence of a stop order suspending such effectiveness and the absence of any proceeding initiated for that purpose by the SEC, (v) the approval for listing on Nasdaq, subject to official notice of issuance, of the BioNTech ADSs to be issued in the Merger, (vi) subject to certain materiality exceptions, the accuracy of certain representations and warranties of each of the parties contained in the Merger Agreement and the compliance by each party with the covenants contained in the Merger Agreement, and (vii) the absence of a material adverse effect with respect to each of the parties thereto. The parties expect the Merger will be completed during the second quarter of 2020. See “The Merger Agreement—Conditions to Closing” located elsewhere in this proxy statement/prospectus.

What happens if the Merger is not completed?

If the Merger Agreement is not approved and adopted by Neon stockholders or if the Merger is not completed for any other reason, Neon stockholders will not receive the Merger Consideration in exchange for their shares of Neon common stock. Instead, Neon will remain an independent public company and Neon common stock will continue to be listed and traded on Nasdaq. Under specified circumstances, Neon may be required to pay BioNTech a termination fee, as described in “The Merger Agreement—Termination Fees” located elsewhere in this proxy statement/prospectus.

What do I need to do?

You should carefully read and consider the information contained in this proxy statement/prospectus, including its annexes. Even if you plan to attend the Neon Special Meeting online, after carefully reading and considering the information contained in this proxy statement/prospectus, please vote promptly to ensure that your shares are represented at the Neon Special Meeting, as applicable.

 

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Questions and Answers about the Neon Special Meeting

When and where is the Neon Special Meeting?

The Neon Special Meeting will be held on May 4, 2020, at 10:00 a.m. Eastern Time. In light of COVID-19 (coronavirus) and to support the well-being of our stockholders and partners, the Neon Special Meeting will be completely virtual. Stockholders can attend the Neon Special Meeting by visiting www.virtualshareholdermeeting.com/NTGN2020.

How can I attend the Neon Special Meeting?

You may attend the Neon Special Meeting, submit questions and vote your shares electronically during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/NTGN2020. You will need the control number that is printed on your proxy card to enter the Neon Special Meeting. We recommend that you log in at least 15 minutes before the Neon Special Meeting to ensure you are logged in when the meeting starts. Please note that you will not be able to attend the Neon Special Meeting in person.

Why is the Neon Special Meeting a virtual meeting?

We have decided to hold our Special Meeting virtually due to COVID-19; we are sensitive to the public health and travel concerns of our stockholders and employees and the protocols that federal, state and local governments may impose. We believe that hosting a virtual meeting will enable greater stockholder attendance and participation from any location around the world.

What matters will Neon stockholders vote on at the special meeting?

Neon is asking its stockholders to consider and vote on: (i) a proposal to approve and adopt the Merger Agreement, or the Merger Proposal; and (ii) a proposal to approve the adjournment of the Neon Special Meeting, if necessary or appropriate, to solicit additional proxies in favor of approval of the Merger Proposal, or the Adjournment Proposal.

What if during the check-in time or during the Neon Special Meeting I have technical difficulties or trouble accessing the virtual meeting website?

If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log in page.

How many votes are needed for the proposals considered by Neon stockholders at the Neon Special Meeting?

The Merger cannot be completed unless, among other matters, Neon stockholders approve the Merger Proposal by the affirmative vote of holders of a majority of the shares of outstanding Neon common stock entitled to vote on such matter. Approval of the Adjournment Proposal requires the affirmative vote of a majority of the shares of Neon common stock present online at the meeting in person or by proxy entitled to vote.

Are there any voting agreements with existing stockholders?

On January 15, 2020, concurrently with the execution and delivery of the Merger Agreement, certain directors, executive officers and Third Rock Ventures entered into voting agreements with BioNTech, pursuant to which such stockholders have agreed, among other things, to vote their respective shares of Neon common stock in favor of the Merger Agreement and the transactions contemplated thereby. As of the public announcement of the Merger, those certain directors and executive officers who signed the Neon voting agreements owned an aggregate of approximately 36% in voting power of the outstanding shares of Neon common stock. As of the record date for the Neon Special Meeting, the directors and executive officers of Neon

 

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who signed the Neon voting agreements owned an aggregate of approximately 39% of the voting power of the outstanding Neon common stock as described in “The Neon Special Meeting—Neon Voting Agreement” located elsewhere in this proxy statement/prospectus. The form of Neon voting agreements are attached to this proxy statement/prospectus as Annex B.

What is the quorum requirement for the Neon Special Meeting?

The presence, online or represented by proxy, of a majority of all issued and outstanding shares of Neon common stock entitled to vote at the Neon Special Meeting will constitute a quorum at the meeting. Holders of shares of Neon common stock present online at the Neon Special Meeting but not voting, and shares of Neon common stock for which Neon has received proxies indicating that their holders have abstained, will be counted as present at the Neon Special Meeting for purposes of determining whether a quorum is established.

As a Neon stockholder, how can I vote?

Whether or not you expect to attend the Neon Special Meeting online, we urge you to vote your shares of Neon common stock as promptly as possible by (1) accessing the Internet website specified on your proxy card; (2) calling the toll-free number specified on your proxy card; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares of Neon common stock may be represented and voted at the Neon Special Meeting. If your shares of Neon common stock are held in the name of a bank, broker or other fiduciary, please follow the instructions on the voting instruction card furnished by the record holder.

Stockholders who choose to participate in the Neon Special Meeting can vote their shares electronically during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/NTGN2020. You will need the control number that is printed on your proxy card to enter the Neon Special Meeting. We recommend that you log in at least 15 minutes before the meeting to ensure you are logged in when the meeting starts.

Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/NTGN2020. Even if you plan to participate in the Neon Special Meeting online, we recommend that you also vote by proxy as described above so that your vote will be counted if you later decide not to participate in the Neon Special Meeting.

As a Neon stockholder, what happens if I do not vote?

Failure to vote or give voting instructions to your broker or nominee for the Neon Special Meeting could make it more difficult to meet the voting requirement that the total affirmative votes cast to approve the Merger Proposal and the Adjournment Proposal. Therefore, Neon urges Neon stockholders to vote.

As a Neon stockholder, may I change my vote after I have submitted a proxy card or voting instruction card?

Yes. You may revoke your election at or prior to the election deadline by submitting a written notice of revocation to Neon or by submitting new election materials. Revocations must specify the name in which your shares are registered on the share transfer books of Neon and any other information that Neon may request. If you wish to submit a new election, you must do so in accordance with the election procedures described in this proxy statement/prospectus and the form of election. If you instructed a bank, brokerage firm or other nominee holder to submit an election for your shares, you must follow your bank’s, brokerage firm’s or other nominee’s directions for changing those instructions. The notice of revocation must be received by Neon at or prior to the election deadline in order for the revocation or new election to be valid.

Should Neon stock certificates be sent in now?

No, please do NOT return your share certificate(s) with your proxy. You will be mailed appropriate and customary transmittal materials within five business days of the mailing of this proxy statement/prospectus, but

 

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under separate cover, describing how you may exchange your shares of Neon common stock for the per share Merger Consideration. If your shares of Neon common stock are held in “street name” through a bank, brokerage firm or other nominee, you will receive instructions from your bank, brokerage firm or other nominee as to how to effect the surrender of your “street name” shares of Neon common stock in exchange for the per share Merger Consideration.

What do Neon stockholders need to do now?

Even if you plan to attend the Neon Special Meeting online, after carefully reading and considering the information contained in this proxy statement/prospectus, please vote promptly to ensure that your shares are represented at the Neon Special Meeting. If you are a stockholder of record, you may vote using any of the following methods:

 

   

by telephone or on the Internet, by calling the toll-free telephone number or visiting the Internet website specified on the enclosed proxy card. Please have your proxy card handy to verify your identity using the control number provided on your proxy card. When voting over the telephone or online you can confirm that your instructions have been properly recorded;

 

   

by completing, signing, dating and returning the enclosed proxy card or voting instruction card in the accompanying prepaid reply envelope; or

 

   

by attending the Neon Special Meeting online and casting your vote there. You may also be represented by another person at the special meeting if you execute a proper proxy designating that person.

If you decide to attend the Neon Special Meeting and vote online, your vote by ballot will revoke any proxy previously submitted. If you are a beneficial owner, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Please note that if you are a beneficial owner and wish to vote online at the special meeting, you must obtain a legal proxy from your bank, broker or other holder of record and present it to the inspectors of election with your ballot.

Who can answer questions?

If you need assistance in voting or completing your proxy card or have questions regarding the Neon Special Meeting, please contact Innisfree, the proxy solicitor for Neon, by telephone at (888) 750-5834. Banks and brokers can call (212) 750-5833 (collect).

 

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SUMMARY

This summary highlights information contained elsewhere in this proxy statement/prospectus. This summary may not contain all the information that may be important to you, and you are urged to read this entire proxy statement/prospectus carefully, including the attached annexes, and the other documents to which this proxy statement/prospectus refers in order for you to fully understand the Merger.

Information about the Companies

BioNTech SE

BioNTech was founded in 2008 on the understanding that every cancer patient’s tumor is unique and that in order to effectively address this challenge, we must create individualized treatments for each patient. To realize this vision, BioNTech combines decades of groundbreaking research in immunology, cutting-edge therapeutic platforms, and a variety of patient profiling and bioinformatic tools to develop individualized immunotherapies for cancer as well as other diseases. BioNTech leverages powerful new therapeutic mechanisms and exploits a diverse array of biological targets to harness the power of each patient’s immune system to address the unique molecular signature of each patient’s underlying disease. BioNTech believes it is uniquely positioned to develop and commercialize the next generation of immunotherapies with the potential to significantly improve clinical outcomes for patients and usher in a new era of individualized medicine.

BioNTech and its collaborators have advanced a development pipeline of over 20 product candidates, of which 10 have entered into 11 ongoing clinical trials. While BioNTech believes its approach is broadly applicable across a number of therapeutic areas, its most advanced programs are focused on oncology, where it has treated over 400 patients across 17 tumor types to date. BioNTech’s immunotherapy drug classes consist of messenger ribonucleic acid, or mRNA, therapeutics, engineered cell therapies, antibodies and small molecule immunomodulators. BioNTech’s product candidates span oncology, infectious diseases and rare diseases.

BioNTech has established relationships with eight pharmaceutical collaborators, including Genentech, Inc., or Genentech, Sanofi S.A., or Sanofi, Genmab A/S, or Genmab, Genevant Sciences GmbH, or Genevant, Eli Lilly and Company, or Eli Lilly, Bayer AG, or Bayer, and Pfizer Inc., or Pfizer, and Shanghai Fosun Pharmaceutical (Group) Co., Ltd., or Fosun Pharma.

The principal executive offices of BioNTech are located at An der Goldgrube 12, D-55131 Mainz, Germany. Its telephone number is +49 6131-9084-0. Its website address is http://www.biontech.de. The information contained on, or that can be accessed through, BioNTech’s website is not incorporated by reference into this proxy statement/prospectus. BioNTech has included its website address as an inactive textual reference only.

Merger Sub

Merger Sub is a wholly-owned direct subsidiary of BioNTech and was formed on January 8, 2020 exclusively for the purpose of effecting the Merger. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Merger. Merger Sub’s separate corporate existence will cease upon the consummation of the Merger and Neon will continue as the surviving corporation. The address and telephone number for Merger Sub’s principal executive offices are 228 E. 45th Street, Suite 9e, New York, NY 10017 and +1 (347) 694-5321, respectively.

Neon Therapeutics, Inc.

Neon is a clinical-stage immuno-oncology company and a leader in the field of neoantigen-targeted therapies, dedicated to transforming the treatment of cancer by directing the immune system towards neoantigens. Neon is leveraging its neoantigen platform and over a decade of insights from its founders to



 

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develop neoantigen-targeted therapies that use two distinct approaches. The first are fully personal therapies that target neoantigens specific to each individual and the second are therapies that target neoantigens that are shared across subsets of patients or tumor types. These approaches focus on targeting a prioritized set of what Neon believes are the most therapeutically-relevant neoantigens. Neon is applying these two approaches to develop neoantigen-targeted product candidates using multiple treatment modalities.

NEO-PTC-01, Neon’s personal neoantigen adoptive T cell therapy, consists of multiple T cell populations targeting what Neon predicts to be the most therapeutically-relevant neoantigens from each patient’s tumor. NEO-PTC-01 is currently in preclinical development, and Neon announced the filing of a clinical trial application in Europe in December 2019 to evaluate NEO-PTC-01 in solid tumors in patients who are refractory to checkpoint inhibitors. Neon plans to initiate a Phase 1 dose escalation clinical trial in metastatic melanoma in collaboration with the Netherlands Cancer Institute in the middle of 2020. The second planned indication for NEO-PTC-01 is metastatic ovarian cancer, with the potential to both expand to other solid tumor types and pursue clinical development in the United States.

In parallel to its personal therapies, Neon is advancing additional therapies that use a precision medicine approach. These include multiple neoantigen-targeted therapies that direct the immune system towards prevalent mutations that are shared across patients in specific tumor types. Neon intends to develop product candidates targeting shared neoantigens using both non-engineered and non-engineered T cell modalities. Neon’s first product candidate using this approach, NEO-STC-01, is a shared neoantigen adoptive T cell therapy for the treatment of RAS-mediated cancers. Neon continues to make significant progress with respect to its precision T cell approach and have also assembled libraries of high-quality T cell receptors, or TCRs, against various shared neoantigens across common human leukocyte antigens, or HLAs which are suitable for an engineered TCR-T cell therapy approach.

Neon also has two neoantigen vaccines in its portfolio: NEO-PV-01 and NEO-SV-01. The most clinically advanced of these is NEO-PV-01, a fully personal neoantigen cancer vaccine, custom-designed and manufactured for each individual patient’s tumor mutations. It is in Phase 1b clinical development in metastatic disease settings, with three ongoing trials. Neon reported top line results from the first trial, NT-001, recently at the Society of Immunotherapy for Cancer 2019 meeting. Neon subsequently announced in November 2019, that it will cease undertaking new announced the cessation of additional spending commitments related to its cancer vaccine programs, NEO-PV-01 and NEO-SV-01. Neon will continue to conduct follow-up from its ongoing NT-002 clinical trial of NEO-PV-01 in first-line patients with untreated advanced or metastatic non-small cell lung cancer, with plans to report initial clinical data from this trial in the third quarter of 2020. Neon has also ceased future enrollment in its NT-003 trial in metastatic melanoma.

Neon generates its product candidate pipeline using our proprietary neoantigen platform, which continuously improves as our product candidates generate data. This platform comprises two key elements: our Real-time Epitope Computation for ONcology, or RECON, bioinformatics engine and our combined T cell biology and immune-monitoring expertise, in particular NEO-STIM, our proprietary antigen-specific T cell induction protocol.

The principal executive offices of Neon are located at 40 Erie Street, Suite 110 Cambridge, Massachusetts 02139. Its telephone number is (617) 337-4701. Its website address is https://neontherapeutics.com/. This proxy statement/prospectus incorporates important business and financial information about Neon from other documents that are not included in or delivered with this proxy statement/prospectus.



 

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Summary of the Merger (page 196)

Subject to the terms and conditions of the Merger Agreement, Merger Sub, a wholly owned direct subsidiary of BioNTech, will be merged with and into Neon, and Neon will continue as the surviving corporation in the Merger and a wholly owned direct subsidiary of BioNTech. At the Effective Time, the certificate of incorporation and the bylaws of Merger Sub, each as in effect immediately prior to completion of the Merger, will be the certificate of incorporation and bylaws, respectively, of the surviving corporation in the Merger, in each case, as amended to change the name of the surviving corporation and to comply with the indemnification obligations provided in the Merger Agreement.

Merger Consideration (page 225)

At the Effective Time, each share of Neon common stock, excluding shares owned by the parties to the Merger Agreement, that is issued and outstanding immediately prior to the Effective Time will be automatically cancelled and converted into the right to receive the Merger Consideration, with each BioNTech ADS representing one BioNTech Share, without interest but subject to any withholding required under applicable law.

As of immediately following the Effective Time, former Neon stockholders are expected to own approximately 0.85% of the outstanding equity interests of the Combined Company on an undiluted basis. No fractional BioNTech ADSs will be issued in the Merger. Each holder of shares of Neon common stock converted pursuant to the Merger who would otherwise have been entitled to receive a fraction of a BioNTech ADS shall receive, in lieu thereof, cash (rounded to the nearest whole cent), without interest, in an amount equal to such fractional part of a BioNTech ADS multiplied by the volume weighted average price of one BioNTech ADS for the ten trading days immediately prior to the second business day prior to the date of the closing of the Merger, starting with the opening of trading on the first trading day to the closing of the second to last trading day prior to the date of closing of the Merger, as reported by Bloomberg.

Treatment of Neon Options, Neon Units and Neon Restricted Stock (page 226)

Neon Options

At the Effective Time, each Neon Option will be automatically cancelled and converted into the right to receive, as soon as reasonably practicable after the Effective Time (but no later than ten business days thereafter), a cash payment equal to (i) the excess, if any, of the Cash Merger Consideration over the applicable per-share exercise price of such cancelled Neon Option, multiplied by (ii) the number of shares of Neon common stock subject to such Neon Option immediately prior to such cancellation. Each Neon Option that has a per-share exercise price that is equal to or greater than the Cash Merger Consideration shall be cancelled at the Effective Time for no consideration. No Neon Options will remain outstanding following the consummation of the Merger.

Neon Units

Prior to the Effective Time, Neon shall issue and deliver to the Company Trust such number of shares of Neon common stock as is necessary to satisfy the obligations under all Neon Units outstanding as of immediately prior to the Effective Time.

At the Effective Time, each Neon Unit shall vest in full and be cancelled and converted into the right to receive from the Company Trust as soon as reasonably practicable after the Effective Time (but no later than five business days thereafter) the Merger Consideration for each share of Neon common stock underlying each such Neon Unit. No Neon Units will remain outstanding following the consummation of the Merger.



 

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Neon Restricted Stock

At the Effective Time, each share of Neon Restricted Stock, which is outstanding immediately prior to the Effective Time, shall vest in full and be cancelled and converted into the right to receive the Merger Consideration in the same manner as other outstanding shares of Neon common stock.

Risk Factors (page 37)

You should carefully read this proxy statement/prospectus and especially consider the factors discussed in “Risk Factors” in connection with your consideration of the Merger before deciding whether to vote for approval of the Merger Proposal.

The Neon Special Meeting (page 190)

The Neon Special Meeting will be held on May 4, 2020, at 10:00 a.m. Eastern Time. In light of COVID-19 (coronavirus) and to support the well-being of our stockholders and partners, the Neon Special Meeting will be completely virtual. Stockholders can attend the Neon Special Meeting by visiting www.virtualshareholdermeeting.com/NTGN2020. At the Neon Special Meeting, Neon stockholders will be asked to consider and vote upon the following proposals:

 

   

the Merger Proposal; and

 

   

the Adjournment Proposal.

You may vote at the Neon Special Meeting if you owned shares of Neon common stock at the close of business on March 23, 2020, the Neon record date. You may cast one vote for each share of Neon common stock that you owned as of the Neon record date, including (i) shares held directly in your name as the stockholder of record and (ii) shares held for you as the beneficial owner in street name through a broker, bank, or other nominee. On the Neon record date, there were outstanding a total of 28,931,978 shares of Neon common stock entitled to vote at the Neon Special Meeting.

Completion of the Merger is conditioned on the approval of the Merger Proposal. Approval of the Merger Proposal requires the affirmative vote of a majority of the outstanding shares of Neon common stock entitled to vote on such matter. Approval of the Adjournment Proposal requires the affirmative vote of a majority of the shares of Neon common stock present at the meeting online or by proxy.

Share Ownership and Voting by Neon Directors and Executive Officers (page 459)

As of the record date, approximately 40% of the outstanding shares of Neon common stock was held by Neon directors and executive officers and their respective affiliates.

Recommendation of the Neon Board and its Reasons for the Merger (page 208)

At a meeting of the Neon Board held on January 15, 2020, the Neon Board unanimously: (1) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and conditions set forth therein, were in the best interests of Neon stockholders; (2) approved and declared advisable the Merger Agreement and the transactions contemplated thereby in accordance with the requirements of the Delaware General Corporation Law; and (3) recommended that Neon stockholders approve and adopt the Merger Agreement at the Neon Special Meeting.

The Neon Board unanimously recommends that the Neon stockholders vote “FOR” the Merger Proposal, and “FOR” the Adjournment Proposal. For the factors considered by the Neon Board in reaching its decision to approve the Merger Agreement and the recommendations of the Neon Board, see “The Merger— Recommendation of the Neon Board and its Reasons for the Merger” located elsewhere in this proxy statement/prospectus.



 

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Opinion of Neon’s Financial Advisor (page 213 and Annex C)

In connection with the Merger, at the meeting of the Neon Board on January 15, 2020, Duff & Phelps LLC, or Duff & Phelps, rendered an oral opinion to the Neon Board, which was subsequently confirmed by delivery of a written opinion immediately after the meeting on January 15, 2020, to the effect that, as of that date, the Exchange Ratio provided for in the proposed transaction was fair, from a financial point of view, to the holders of shares of Neon common stock (without giving effect to any impact of the proposed transaction on any particular stockholders other than in its capacity as a stockholder).

The full text of the Duff & Phelps written opinion, dated January 15, 2020 which describes the assumptions made and limitations upon the review undertaken by Duff & Phelps in preparing its opinion, is attached hereto as Annex C and is incorporated by reference herein. You should read the opinion carefully in its entirety.

Accounting Treatment (page 219)

The Merger will be accounted for in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, and in particular, with IFRS 3, Business Combinations, or IFRS 3, under which the Merger qualifies since the acquisition of Neon by BioNTech fulfills the definition of a business. On the date of the acquisition, the identifiable assets and liabilities of Neon will be recorded by BioNTech at their respective acquisition-date fair values. Any excess of the purchase price over the net acquisition-date fair value of the identifiable assets acquired and liabilities assumed will be recognized as goodwill.

Regulatory Approvals Required for the Merger (page 224)

In connection with the issuance of BioNTech ADSs in the Merger, pursuant to the Merger Agreement, as a condition to the closing of the Merger, BioNTech must file a registration statement with the SEC under the Act, of which this proxy statement/prospectus forms a part, that is declared effective by the SEC.

Appraisal Rights (page 224)

Under Delaware law, the Neon stockholders are not entitled to appraisal rights in connection with the Merger or any other transaction contemplated by the Merger Agreement.

Interests of Neon’s Directors and Executive Officers in the Merger (page 220)

In considering the recommendation of the Neon board of directors, or the Neon Board, to approve and declare advisable the Merger Agreement, Neon stockholders should be aware that some of the Neon directors and executive officers have interests in the Merger and have arrangements that are different from, or in addition to, those of Neon stockholders generally, including, but not limited to, the following:

 

   

Neon has entered into executive employment agreements with certain employees, including its executive officers, entitling them to certain payments and benefits in connection with a termination of employment following a change of control of Neon;

 

   

Neon has entered into retention letter agreements with certain employees, including its executive officers, entitling them to a retention bonus upon the closing of the Merger;

 

   

pursuant to the terms of the Merger Agreement, all outstanding equity awards will accelerate upon the closing of the Merger; and

 

   

directors and officers of Neon have continuing rights to indemnification and directors’ and officers’ liability insurance.



 

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These interests and arrangements may create potential conflicts of interest. The Neon Board was aware of these potential conflicts of interest and considered them, among other matters, in reaching its decision to approve and declare advisable the Merger Agreement and recommend that the Neon stockholders approve and adopt the Merger Agreement.

Board of Directors and Senior Management of the Combined Company (page 219)

The Supervisory Board (Aufsichtsrat) and Management Board (Vorstand) of the Combined Company will be comprised of the Supervisory Board (Aufsichtsrat) and Management Board (Vorstand) of BioNTech prior to the Effective Time.

Dr. Ulrich Wandschneider and Mr. Michael Motschmann qualify as “independent directors” as such term is defined in Rule 10A-3 under the Exchange Act and Nasdaq Rule 5605(a)(2).

BioNTech’s Reasons for the Merger (page 223)

At each of their respective meetings on January 15, 2020, the BioNTech Supervisory Board and the BioNTech Management Board determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein, are fair to, and in the best interests of, BioNTech and BioNTech’s stockholders, and approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, upon the terms and subject to the conditions set forth therein.

In reaching their respective decisions to approve the Merger Agreement and transactions provided for therein, the BioNTech Supervisory Board and BioNTech Management Board evaluated the Merger and the Merger Agreement in consultation with BioNTech’s senior management and outside financial, legal and other advisors, reviewed various financial data and due diligence information, and considered a variety of factors, determining that the Merger would expand BioNTech’s cell therapy pipeline through the addition of neoantigen specific cell therapies which are complementary to BioNTech’s pipeline and focus on solid tumors. These include an adoptive T cell therapy targeting individual neoantigens, and a T cell therapy targeting shared RAS oncogenes. Moreover, the Merger would accelerate BioNTech’s strategy to expand its capabilities and build BioNTech’s presence in the United States by creating a U.S. hub for research and clinical development. Finally, BioNTech believes the acquisition creates long-term value for BioNTech and Neon shareholders by combining capabilities, intellectual property and synergistic pipeline programs.

Listing of the BioNTech ADSs (page 224)

The BioNTech ADSs are listed on Nasdaq under the symbol “BNTX.”

Delisting and Deregistration of Neon Common Stock (page 224)

When the Merger is completed, the shares of Neon common stock currently listed on Nasdaq will cease to be quoted on Nasdaq and will be deregistered under the Exchange Act.

Litigation Related to the Merger (page 224)

It is a condition to the Merger that no temporary restraining order, preliminary or permanent injunction or any other order precluding, restraining, enjoining, prohibiting, suspending or making illegal the consummation of the Merger nor any law that precludes, restrains, enjoins or prohibits the consummation of the Merger shall have been issued by any governmental entity or a court of competent jurisdiction. No party to the Merger Agreement



 

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is aware of any lawsuit or proceeding specific to the Merger having been filed to date. If such a lawsuit or other proceeding is commenced and if in any such litigation or proceeding a plaintiff is successful in obtaining a restraining order or injunction prohibiting the consummation of the Merger Agreement or the transactions contemplated thereby, then the closing of the Merger may be delayed or may never occur. Even if the Merger is permitted to occur, the parties may be required to pay damages, fees or expenses in respect of claims related to the Merger or the transactions contemplated thereby.

The Merger Agreement (page 225 and Annex A)

A complete copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus. You should read the entire Merger Agreement carefully because it is the principal document governing the Merger. For a further discussion of the Merger Agreement, see “The Merger Agreement” located elsewhere in this proxy statement/prospectus.

No Solicitation of Offers (page 234 and Annex A)

As more fully described in this proxy statement/prospectus and in the Merger Agreement, and subject to the exceptions described below and in the Merger Agreement, Neon has agreed, among other things, that it will not, directly or indirectly:

 

   

solicit, initiate, propose, knowingly facilitate or knowingly encourage any inquiries, proposals or offers that constitute, or that could reasonably be expected to lead to an acquisition proposal;

 

   

enter into, engage in, continue or otherwise participate in any discussions or negotiations with any third party regarding an acquisition proposal, or furnish to any third party information or data or provide to any third party access to the businesses, properties, assets, books or records, or personnel of Neon or any of its subsidiaries, in each case with respect to any acquisition proposal or any inquiry, proposal or offer that could reasonably be expected to lead to an acquisition proposal;

 

   

grant any waiver, amendment or release of or under, or fail to enforce, any confidentiality, standstill or similar agreement (or any confidentiality, standstill or similar provision of any other contract);

 

   

approve, endorse or recommend any proposal that constitutes or could reasonably be expected to lead to any acquisition proposal;

 

   

enter into any letter of intent, agreement, contract, commitment or agreement in principle (other than a customary confidentiality agreement on terms not less favorable in the aggregate to Neon than the terms of the existing confidentiality agreements between BioNTech and Neon) with respect to an acquisition proposal or enter into any agreement, contract or commitment requiring Neon to abandon, terminate or fail to consummate, or that could otherwise materially impede the ability of BioNTech and Merger Sub to consummate, the Merger or the other transactions contemplated by the Merger Agreement; or

 

   

propose, resolve or agree to do any of the foregoing.

Neon has further agreed (1) to immediately cease and terminate any existing solicitations, encouragements, facilitations, discussions or negotiations with any third party with respect to any acquisition proposal, and (2) promptly terminate any physical or electronic data room access and use commercially reasonable efforts to cause all non-public information previously provided by or on behalf of Neon or any of its subsidiaries to any third party or representative to be returned or destroyed in accordance with the applicable confidentiality agreement.

However, at any time prior to the approval and adoption of the Merger Agreement by Neon stockholders, Neon receives an unsolicited written bona fide acquisition proposal from a third party, which did not result from a breach of provisions of the Merger Agreement related to unsolicited proposals and adverse board



 

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recommendation changes, and the Neon Board determines in good faith, after consultation with its financial advisor and outside legal counsel, that such acquisition proposal constitutes, or would reasonably be expected to lead to, a superior proposal, and that failure to take the following actions would be inconsistent with fiduciary duties under applicable law, then Neon may:

 

   

furnish information and data with respect to Neon and its subsidiaries to the third party making such acquisition proposal and afford such third party access to the businesses, properties, assets and personnel of Neon and its subsidiaries; and

 

   

enter into, maintain and participate in discussions or negotiations with the third party making such acquisition proposal regarding such acquisition proposal or otherwise cooperate with or assist or participate in, or facilitate, any such discussions or negotiations;

provided, however, that Neon will not furnish any non-public information except pursuant to a customary confidentiality agreement on terms not less favorable in the aggregate to Neon than the terms of the existing confidentiality agreement between BioNTech and Neon and Neon will concurrently provide to BioNTech any information concerning Neon or its subsidiaries provided to such third party which was not previously provided to BioNTech.

Notwithstanding the foregoing, Neon and its representatives may, following the receipt of an unsolicited written bona fide acquisition proposal from a third party, contact such third party solely in order to clarify and understand the terms and conditions of such acquisition proposal in order to permit the Neon Board to determine in good faith, after consultation with its financial advisor and outside legal counsel, whether such acquisition proposal constitutes, or would reasonably be expected to lead to, a superior proposal, and direct any persons to the Merger Agreement.

The Merger Agreement provides that the term “acquisition proposal” means, with respect to Neon, any offer or proposal from any third party relating to any transaction or series of related transactions involving (i) any acquisition or purchase by any third party, directly or indirectly, of 15% or more of any class of outstanding voting or equity securities of Neon, or any tender offer or exchange offer that, if consummated, would result in any third party beneficially owning 15% or more of any class of outstanding voting or equity securities of Neon, (ii) any merger, amalgamation, consolidation, share exchange, asset acquisitions, business combination, joint venture, license, collaboration, research and development or other similar transaction involving Neon or any of its subsidiaries, the business of which constitutes 15% or more of the net revenues, net income or assets of Neon and its subsidiaries, taken as a whole, (iii) any liquidation, dissolution, recapitalization, extraordinary dividend or other significant corporate reorganization of Neon or any of its subsidiaries, the business of which constitutes 15% or more of the net revenues, net income or assets of Neon and its subsidiaries, taken as a whole, or (iv) any combination of the foregoing.

The Merger Agreement provides that the term “superior proposal” means any bona fide written acquisition proposal made after the date hereof that the Neon Board, determines in good faith (after consultation with its financial advisor and outside legal counsel), taking into account, among other things, all legal, financial, regulatory, and other aspects of the acquisition proposal and the third party making the acquisition proposal, including the form of consideration, financing terms (and certainty of financing) thereof and the likelihood of consummation, any applicable termination fees, as well as any adjustment to the terms and conditions offered in writing by BioNTech in response to such proposal pursuant to the provisions of the Merger Agreement related to adverse board recommendation changes, which (a) would, if consummated, result in a transaction that is more favorable from a financial point of view to Neon stockholders than the Merger and (b) is reasonably capable of being consummated in accordance with its terms; provided, however, that, for purposes of this definition of “superior proposal,” references in the term “acquisition proposal” to “15%” shall be deemed to be references to “50%”.



 

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Change of Recommendation (page 236)

Neon’s Board Recommendation

Subject to the exceptions described below and in the Merger Agreement, Neon has agreed to recommend that the Neon stockholders approve and adopt the Merger Agreement at the Neon Special Meeting, or the Neon Board Recommendation.

Notwithstanding the above, the Neon Board may, if it determines in good faith (after consultation with its financial advisor and outside legal counsel), that the failure to do so would be inconsistent with its fiduciary duties under applicable law, make an adverse board recommendation change, provided that:

 

   

Neon shall have provided at least four business days’ prior written notice to BioNTech advising BioNTech that the Neon Board intends to make an adverse board recommendation change, or a Notice of Superior Proposal, and specifying the reasons therefor, including, the material terms and conditions of, and the identity of the third party making, such superior proposal, and a copy of any other relevant transaction documents;

 

   

during such notice period, Neon shall, and shall cause its representatives to, to the extent requested by BioNTech, negotiate with BioNTech in good faith to make such adjustments to the terms and conditions of the Merger Agreement as would enable the Neon Board to maintain the Neon Board Recommendation; and

 

   

taking into account all adjustments to the terms of the Merger Agreement that may be irrevocably offered in writing by BioNTech as described above, the Neon Board (no earlier than the end of such four business day notice period) determines in good faith after consultation with its financial advisor and outside legal counsel that such acquisition proposal constitutes a superior proposal and the failure to effect an adverse board recommendation change would be inconsistent with its fiduciary duties under applicable law.

Notwithstanding the above, the Neon Board may fail to (i) make, withdraw, amend, modify, or materially qualify, in a manner adverse to BioNTech or Merger Sub, or otherwise make any statement or proposal inconsistent with, the Neon Board Recommendation; (ii) include the Neon Board Recommendation in the proxy statement that is mailed to Neon’s stockholders; or (iii) reaffirm (publicly, if so requested by BioNTech) the Neon Board Recommendation within ten business days after the date any acquisition proposal (or material modification thereto) is first publicly disclosed by Neon or the person making such acquisition proposal, each following the occurrence of an intervening event, if the Neon Board determines in good faith (after consultation with its financial advisor and outside legal counsel), that the failure to do so would be inconsistent with its fiduciary duties under applicable law, provided that:

 

   

Neon shall have provided at least four business days’ prior written notice to BioNTech advising BioNTech that the Neon Board intends to make an adverse board recommendation change and specifying the material facts underlying the determination by the Neon Board that an intervening event has occurred and the reason for such adverse board recommendation change, in reasonable detail (a “Notice of Intervening Event”);

 

   

during such notice period, Neon shall, and shall cause its representatives to, to the extent requested by BioNTech, negotiate with BioNTech in good faith to make such adjustments to the terms and conditions of the Merger Agreement as would enable the Neon Board to maintain the Neon Board Recommendation; and

 

   

taking into account all adjustments to the terms of the Merger Agreement that may be irrevocably offered in writing by BioNTech as described above, the Neon Board (no earlier than the end of such four business day notice period) determines in good faith after consultation with its financial advisor



 

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and outside legal counsel that the failure to effect an adverse board recommendation change would be inconsistent with its fiduciary duties under applicable law.

Indemnification and Insurance (page 238)

Pursuant to the terms of the Merger Agreement, Neon’s directors and executive officers will be entitled to certain ongoing indemnification and coverage under directors’ and officers’ liability insurance policies of, and the organizational documents of, Neon and BioNTech. See “The Merger Agreement—Indemnification and Insurance” located elsewhere in this proxy statement/prospectus.

Conditions to Closing (page 239)

Each party’s obligation to effect the Merger is subject to satisfaction at or prior to the Effective Time of each of the following conditions (which may be waived in whole or in part by such party):

 

   

the Neon Stockholder Approval shall have been obtained;

 

   

no law shall have been enacted by any federal or state governmental entity of competent jurisdiction and remain in effect that precludes, restrains, enjoins or prohibits the consummation of the Merger;

 

   

no order (whether temporary, preliminary or permanent) of a governmental entity or court of competent jurisdiction is in effect precluding, restraining, enjoining, prohibiting, suspending or making illegal the consummation of the Merger;

 

   

the Form F-4 shall have been declared effective by the SEC under the Securities Act and no stop order suspending the effectiveness of the Form F-4 shall have been issued by the SEC and remain in effect, and no proceeding for that purpose shall have been initiated by the SEC and not subsequently withdrawn;

 

   

the BioNTech ADSs issued in the Merger shall have been approved for listing on Nasdaq, subject to official notice of issuance; and

 

   

as required by German law, a draft of the determination of adequacy of the contribution-in-kind by the German court-appointed accounting firm shall confirm such adequacy.

The obligations of BioNTech and Merger Sub to effect the Merger are further subject to the satisfaction or waiver of BioNTech at or prior to the Effective Time of the following conditions:

 

   

the representations and warranties of Neon in the Merger Agreement (without giving effect to any references therein to material adverse effect or other materiality qualifiers), other than the representations and warranties related to capitalization, due organization, absence of changes, authority and the binding nature of the Merger Agreement, takeover statutes, the fairness opinion and the financial advisor, will be true and correct in all respects as of January 15, 2020 and as of the date of closing of the Merger as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall have been true and correct as of such earlier date), unless the failure of such representations and warranties of Neon to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect with respect to Neon;

 

   

the representations and warranties relating to capitalization will be true and correct in all respects (except to a de minimis extent) as of January 15, 2020 and as of the date of the closing of the Merger as though made on and as of such date and time;



 

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the representations and warranties relating to due organization, absence of changes, authority and the binding nature of the Merger Agreement, takeover statutes, the fairness opinion and the financial advisor will be true and correct in all material respects as of January 15, 2020 and as of the date of the closing of the Merger as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date);

 

   

Neon shall have performed or complied in all material respects with all of the obligations, agreements and covenants required to be performed or complied with by Neon under the Merger Agreement at or prior to the closing of the Merger;

 

   

BioNTech shall have received a closing certificate signed by an authorized executive officer of Neon, dated as of the date of the closing of the Merger to the effect that certain conditions in the Merger Agreement have been satisfied;

 

   

since January 15, 2020, a material adverse effect with respect to Neon shall not have occurred;

 

   

no more than 30 days prior to the closing of the Merger, Neon shall have delivered to BioNTech a certificate (in form and substance reasonably satisfactory to BioNTech) pursuant to Treasury Regulations Section 1.1445-2(c)(3), stating that Neon is not and has not been a United States real property holding corporation (as defined in Section 897(c)(2) of the Internal Revenue Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of the Internal Revenue Code; and

 

   

BioNTech shall have received its counsel’s tax opinion, dated as of the date of the closing of the Merger.

Neon’s obligation to effect the Merger is further subject to the satisfaction or waiver of Neon at or prior to the Effective Time of the following conditions:

 

   

the representations and warranties of BioNTech and Merger Sub in the Merger Agreement (without giving effect to any references therein to material adverse effect or other materiality qualifiers), other than the representations and warranties related to capitalization, due organization, SEC filings and financial statements, absence of changes, authority and the binding nature of the Merger Agreement, and the financial advisor, will be true and correct in all respects as of January 15, 2020 and as of the date of the closing of the Merger as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall have been true and correct as of such earlier date), unless the failure of such representations and warranties of BioNTech and Merger Sub to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect with respect to BioNTech;

 

   

the representations and warranties relating to capitalization will be true and correct in all respects (except to a de minimis extent) as of January 15, 2020 and as of the date of the closing of the Merger as though made on and as of such date and time;

 

   

the representations and warranties relating to due organization, SEC filings and financial statements, absence of changes, authority and the binding nature of the Merger Agreement, and the financial advisor will be true and correct in all material respects as of January 15, 2020 and as of the date of the closing of the Merger as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date);



 

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BioNTech and Merger Sub shall have performed or complied in all material respects with all of the obligations, agreements and covenants required to be performed or complied with by BioNTech and Merger Sub under the Merger Agreement at or prior to the closing of the Merger;

 

   

Neon shall have received a closing certificate signed by an authorized executive officer of BioNTech, dated as of the date of the closing of the Merger to the effect that certain conditions in the Merger Agreement have been satisfied; and

 

   

Neon shall have received its counsel’s tax opinion, dated as of the date of the closing of the Merger.

Termination Events (page 241)

The Merger Agreement may be terminated at any time prior to the Effective Time by mutual written consent of BioNTech and Neon, and either party may terminate the Merger Agreement in the following circumstances:

 

   

if the Merger shall not have been consummated by October 15, 2020, or the End Date, except that the right to terminate the Merger Agreement on this basis shall not be available to any party whose breach of any representation, warranty, covenant, or agreement set forth in the Merger Agreement has been the cause of, or resulted in, the failure of the Merger to be consummated on or before the End Date;

 

   

if any governmental entity of competent jurisdiction shall have enacted, issued, promulgated, enforced, or entered any law or order making illegal, permanently enjoining, or otherwise permanently prohibiting the consummation of the Merger or the other transactions contemplated by the Merger Agreement and such law or order shall have become final and nonappealable; provided, however, the right to terminate the Merger Agreement on this basis shall not be available to any party whose breach of any representation, warranty, covenant, or agreement set forth in the Merger Agreement has been the cause of, or resulted in, the issuance, promulgation, enforcement, or entry of any such law or order; or

 

   

if the Merger Agreement has been submitted to the Neon stockholders for adoption at a duly convened Neon stockholders’ meeting and the Neon Stockholder Approval shall not have been obtained at such meeting (unless such Neon stockholders’ meeting has been adjourned or postponed, in which case at the final adjournment or postponement thereof).

BioNTech may terminate the Merger Agreement at any time prior to the Effective Time as follows:

 

   

if an adverse board recommendation change shall have occurred or Neon shall have materially breached its obligations under the Merger Agreement related to unsolicited proposal and adverse board recommendation changes; or

 

   

if there shall have been a breach by Neon of any representation, warranty, covenant, or agreement on the part of Neon set forth in the Merger Agreement such that the conditions to the closing of the Merger set forth in the Merger Agreement would not be satisfied and, in either such case, such breach is incapable of being cured by the End Date, or if curable prior to the End Date, has not been cured within the earlier of (i) 30 calendar days after the receipt of written notice thereof from BioNTech stating BioNTech’s intention to terminate the Merger Agreement on this basis and (ii) three business days before the End Date.

Neon may terminate the Merger Agreement at any time prior to the Effective Time as follows:

 

   

if there shall have been a breach by BioNTech or Merger Sub of any representation, warranty, covenant or agreement on the part of BioNTech or Merger Sub set forth in the Merger Agreement such that the conditions to the closing of the Merger set forth in the Merger Agreement would not be satisfied and, in either such case, such breach is incapable of being cured by the End Date, or if curable prior to the End Date, has not been cured with the earlier of (i) 30 calendar days after the receipt of written notice



 

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thereof from Neon stating Neon’s intention to terminate the Merger Agreement and (ii) three business days before the End Date.

Termination Fees (page 242)

Neon will be required to pay to BioNTech a termination fee of $3,200,000 by wire transfer of immediately available funds if the Merger Agreement is terminated as follows:

 

   

by BioNTech in the event that an adverse board recommendation change shall have occurred or Neon shall have materially breached its obligations under the Merger Agreement related to unsolicited proposal and adverse board recommendation changes;

 

   

by BioNTech in the event that there shall have been a breach by Neon of any representation, warranty, covenant, or agreement on the part of Neon set forth in the Merger Agreement such that the conditions to the closing of the Merger set forth in the Merger Agreement would not be satisfied and, in either such case, such breach is incapable of being cured by the End Date, or if curable prior to the End Date, has not been cured within the earlier of (i) 30 calendar days after the receipt of written notice thereof from BioNTech stating BioNTech’s intention to terminate the Merger Agreement on this basis and (ii) three business days before the End Date, an acquisition proposal is made or communicated to Neon or is publicly disclosed and not withdrawn before such termination, and during the period from January 15, 2020 through twelve months after such termination, Neon consummates an acquisition proposal or enters into a definitive agreement in respect of an acquisition proposal, which acquisition proposal is subsequently consummated; or

 

   

by BioNTech or Neon in the event that the Merger Agreement has been submitted to the Neon stockholders for adoption at a duly convened Neon stockholders’ meeting and the Neon Stockholder Approval shall not have been obtained at such meeting, an acquisition proposal is made or communicated to Neon or is publicly disclosed and not withdrawn before the Neon Special Meeting, and during the period from January 15, 2020 through twelve months after such termination, Neon consummates an acquisition proposal or enters into a definitive agreement in respect of an acquisition proposal, which acquisition proposal is subsequently consummated.

Certain Material U.S. Federal Income Tax Considerations (page 462)

It is intended that, for U.S. federal income tax purposes, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986. If the Merger qualifies for such intended tax treatment, a U.S. holder (as defined in “Certain Material U.S. Federal Income Tax Considerations” located elsewhere in this proxy statement/prospectus) generally will not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of such holder’s shares of Neon common stock for BioNTech ADSs in the Merger, except that such holder of shares of Neon common stock may recognize gain or loss with respect to cash received in lieu of a fractional BioNTech ADSs.

For a more complete discussion of the material U.S. federal income tax considerations of the Merger applicable to U.S. holders of shares of Neon common stock, please carefully review the information set forth in “Certain Material U.S. Federal Income Tax Considerations” located elsewhere in this proxy statement/prospectus. The discussion of U.S. federal income tax considerations of the Merger contained in this proxy statement/prospectus is intended to provide only a general summary and is not a complete analysis or description of all potential U.S. federal income tax consequences of the Merger. The discussion does not address tax consequences that may vary with, or are contingent on, individual circumstances. In addition, it does not address the effects of any non-U.S., state or local tax laws. Holders of shares of Neon common stock should consult their tax advisor to determine the tax consequences of the Merger to them.



 

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Material German Tax Considerations (page 466)

For a summary of the anticipated material German tax considerations of ownership of BioNTech ADSs, please see “Material German Tax Considerations” located elsewhere in this proxy statement/prospectus.

Comparison of Shareholder Rights (page 496)

As a result of the Merger, Neon stockholders will become holders of BioNTech ADSs, and will have different rights as holders of BioNTech ADSs than they had as holders of Neon common stock. The differences between the rights of these respective holders result from the differences among (1) German, European and Delaware law, (2) the respective governing documents of BioNTech and Neon, and (3) the terms of the deposit agreement among The Bank of New York Mellon, BioNTech and the holders and beneficial owners of BioNTech ADSs. For additional information, see “Comparison of Shareholder Rights” and “Description of the BioNTech ADSs” located elsewhere in this proxy statement/prospectus. For a copy of Neon’s current certificate of incorporation or bylaws, see “Where You Can Find More Information” located elsewhere in this proxy statement/prospectus. BioNTech’s articles of association as of the date hereof are included as an exhibit to the registration statement of which this proxy statement/prospectus is a part.



 

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SELECTED CONSOLIDATED FINANCIAL DATA OF BIONTECH

The following tables present selected consolidated financial data of BioNTech as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017. We derived the selected consolidated statements of operations for the years ended December 31, 2019, 2018 and 2017 and the selected consolidated statement of financial position data as of December 31, 2019 and 2018 from our audited consolidated financial statements included elsewhere in this proxy statement/prospectus. We present our consolidated financial statements in Euros and in accordance with IFRS as issued by the IASB.

The selected consolidated financial data below should be read together with our consolidated financial statements and related notes included elsewhere in this proxy statement/prospectus. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period.

 

     For the Years Ended
December 31,
 
     2019      2018      2017  
(in thousands except per share data)                     

Consolidated statement of operations:

        

Revenues from contracts with customers

   108,589      127,575      61,598  

Cost of sales

     (17,361      (13,690      (9,318
  

 

 

    

 

 

    

 

 

 

Gross profit

     91,228        113,885        52,280  
  

 

 

    

 

 

    

 

 

 

Research and development expenses

     (226,466      (143,040      (85,496
  

 

 

    

 

 

    

 

 

 

Operating loss

     (181,518      (53,854      (61,277
  

 

 

    

 

 

    

 

 

 

Loss before tax

     (179,440      (47,662      (85,905
  

 

 

    

 

 

    

 

 

 

Income taxes

     268        (600      (45

Loss for the period

   (179,172    (48,262    (85,950
  

 

 

    

 

 

    

 

 

 

Loss attributable to non-controlling interests

     (116      (243      (297
  

 

 

    

 

 

    

 

 

 

Loss attributable to equity holders of the parent

   (179,056    (48,019    (85,653
  

 

 

    

 

 

    

 

 

 

Basic and diluted loss per share

   (0.85    (0.25    (0.51
  

 

 

    

 

 

    

 

 

 

 

     As of December 31,  
     2019      2018  
(in thousands)              

Consolidated statement of financial position:

     

Cash and cash equivalents

   519,149      411,495  

Total assets

     797,647        652,986  

Total current liabilities

     138,142        126,121  

Total non-current liabilities

     166,013        259,865  

Ordinary shares outstanding

     226,779        193,296  

Total equity

     493,492        267,000  


 

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Table of Contents

SELECTED CONSOLIDATED FINANCIAL DATA OF NEON

The following tables present selected consolidated financial data of Neon as of and for the years ended December 31, 2019 and 2018. Neon derived the selected consolidated statements of operations and comprehensive loss for the years ended December 31, 2019 and 2018 and the selected consolidated statement of financial position data as of December 31, 2019 from Neon’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus. We present our consolidated financial statements in US dollars and in accordance with GAAP. The selected consolidated financial data below should be read together with Neon’s consolidated financial statements and related notes included elsewhere in this proxy statement/prospectus. Neon’s historical results for any prior period are not necessarily indicative of results to be expected in any future period.

 

     Year Ended December 31,  
     2019     2018  
(In thousands, except share and per share amounts)             

Consolidated statements of operations and comprehensive loss:

    

Operating expenses:

    

Research and development

   $ 59,718     $ 60,425  

General and administrative

     21,420       18,276  
  

 

 

   

 

 

 

Total operating expenses

     81,138       78,701  
  

 

 

   

 

 

 

Loss from operations

     (81,138     (78,701

Other income (expense), net

    

Interest income

     1,401       1,792  

Other expense

     (39     (25
  

 

 

   

 

 

 

Total other income (expense), net

     1,362       1,767  
  

 

 

   

 

 

 

Net loss

     (79,776     (76,934

Accretion of redeemable convertible preferred stock to redemption value

     —         (6,371
  

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (79,776   $ (83,305
  

 

 

   

 

 

 

Net loss per share attributable to common stockholders, basic and diluted

   $ (2.86   $ (5.54
  

 

 

   

 

 

 

Weighted average common shares outstanding, basic and diluted

     27,878,701       15,036,397  
  

 

 

   

 

 

 

Comprehensive loss:

    

Net loss

   $ (79,776   $ (76,934

Other comprehensive loss:

    

Unrealized gains (losses) on marketable securities

     75       (62
  

 

 

   

 

 

 

Total other comprehensive income (loss)

     75       (62
  

 

 

   

 

 

 

Comprehensive loss

   $ (79,701   $ (76,996
  

 

 

   

 

 

 
     As of December 31,  
     2019      2018  
(in thousands)              

Consolidated statement of financial position:

     

Cash, cash equivalents and marketable securities

   $ 29,395      $ 103,311  

Total current assets

     31,243        105,427  

Total assets

     46,372        114,088  

Total liabilities

     16,955        12,839  

Total stockholders’ equity

     29,417        101,249  


 

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Table of Contents

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

On January 15, 2020 BioNTech entered into an agreement to acquire Neon in exchange for a consideration of 0.063 ADSs, representing BioNTech’s ordinary shares, per share of Neon. The relevant 30-day volume weighted average price on March 24, 2020, the trading day a week prior to the date of this proxy statement/prospectus, equaled $57.50 per ADS. BioNTech plans to finance the acquisition by issuing new ordinary shares.

Although the exchange ratio of BioNTech ADS to each share of Neon common stock is fixed at 0.063, the value of the Merger Consideration will fluctuate between the date of this proxy statement/prospectus and the completion of the Merger based on the market value of BioNTech ADSs. Any change in the market price of BioNTech ADSs after the date of this proxy statement/prospectus will change the value of the Merger Consideration that Neon stockholders will receive.

The following unaudited pro forma condensed combined financial information are based on BioNTech’s historical consolidated financial statements prepared in accordance with International Financial Reporting Standards as issued by the IASB, or IFRS, and Neon’s historical consolidated financial statements as adjusted to give effect to BioNTech’s pending acquisition of Neon. Additionally, as Neon prepared its financial statements in accordance with U.S. general accepted accounting principles, or U.S. GAAP, and applied U.S. dollars as its reporting currency, adjustments have been made to convert Neon’s financial statements to IFRS and its reporting currency to Euros. Please see “Unaudited Pro Forma Condensed Combined Financial Information — 2 Accounting policy conformity changes” and “— 3 Foreign currency adjustments” below for a discussion of the adjustments made to convert Neon’s financial information from U.S. GAAP to IFRS.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2019 gives effect to this transaction as if it had occurred on January 1, 2019. The unaudited pro forma condensed combined statement of financial position as of December 31, 2019 gives effect to this transaction as if it had occurred on December 31, 2019.

As of the date of this filing, BioNTech has not performed the detailed valuation studies necessary to derive the required estimates of the fair value of the Neon’s assets to be acquired and liabilities to be assumed and the related allocations of the purchase price, and BioNTech has performed a high-level assessment of the adjustments necessary to conform Neon’s U.S. GAAP accounting policies to the IFRS accounting policies of BioNTech.

As indicated in Note 5 to the unaudited pro forma condensed consolidated financial information, BioNTech has made certain adjustments to adjust the historical book values of the assets and liabilities of Neon to reflect preliminary estimates of the fair values necessary to prepare the unaudited pro forma condensed consolidated financial information, with the excess of the estimated purchase price over the net assets of Neon, as adjusted to reflect estimated fair values, recorded as intangible assets and goodwill.

Additionally, as indicated in Note 2 to the unaudited pro forma condensed consolidated financial information, estimated effects related to the application of IFRS have been based on high-level, preliminary assessments and as indicated in Note 3 to the unaudited pro forma condensed consolidated financial information, the reporting currency has been applied based on a simplified method. Actual results are expected to differ from these unaudited pro forma condensed combined financial information once BioNTech has determined the final purchase price for Neon, completed the valuation studies necessary to finalize the required purchase price allocation and finalized conforming accounting changes for Neon. Such differences may be material.

The assumptions and estimates underlying the unaudited adjustments to the pro forma condensed combined financial information are described in the accompanying notes, which should be read together with the pro forma



 

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condensed combined financial information. The unaudited pro forma condensed combined financial information should be read together with:

 

   

BioNTech’s audited consolidated financial statements and related notes included in this proxy statement/prospectus as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017; and

 

   

Neon’s audited consolidated financial statements and related notes included in this proxy statement/prospectus as of and for the years ended December 31, 2019 and 2018.

The unaudited pro forma condensed consolidated financial information do not include the realization of any future cost savings or restructuring or integration charges that are expected to result from the Merger.

The unaudited pro forma condensed combined financial information is not intended to represent or be indicative of the consolidated results of operations and financial condition of the consolidated company that would have been reported had the acquisition been completed as of the dates presented, and should not be taken as being representative of the future consolidated results of operations or financial condition of the consolidated company.



 

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Table of Contents

Unaudited Pro Forma Condensed Combined Statement of Financial Position

as of December 31, 2019

(in thousands)

 

    BioNTech SE
Historical
IFRS EUR
    Neon
Therapeutics
Inc.

Historical
USGAAP

USD
    Neon
Therapeutics
Inc.

Historical
USGAAP

EUR(1)
    Neon
Therapeutics
Inc.

IFRS
Adjustments
EUR(1)
    Pro Forma
Adjustments
EUR(1)
    Notes     Pro Forma
Combined
EUR(1)
 

Intangible assets

    89,434       —         —         —         72,919       5 a), 5 d)       162,353  

Property, plant and equipment

    148,062       14,651 (2)      13,042       (484     (541     2 a), 5 d)       160,079  

Other non-current assets

    —         478       425       —         —           425  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Total non-current assets

    237,496       15,129       13,467       (484     72,378         322,857  

Inventories

    11,722       —         —         —         —           11,722  

Trade receivables

    11,913       —         —         —         —           11,913  

Deferred expenses and other current assets

    17,367       1,848       1,645       —         —           19,012  

Cash and cash equivalents

    519,149       29,395       26,166       —         —           545,315  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Total assets

    797,647       46,372       41,278       (484     72,378         910,819  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Total shareholders equity

    493,492       29,416       26,185       (484     66,940       5 a), 5 c)       586,133  

Contract liabilities

    97,109       —         —         —         —           97,109  

Deferred tax liabilities

    —         —         —         —         5,438       5 b)       5,438  

Other non-current liabilities

    68,904       6,548 (3)      5,829       —         —           74,733  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Total non-current liabilities

    166,013       6,548       5,829       —         5,438         177,280  

Trade payables

    20,498       1,702       1,515       —         —           22,013  

Contract liabilities

    93,583       —         —         —         —           93,583  

Other current liabilities

    24,061       8,705 (4)      7,749       —         —           31,810  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Total liabilities

    304,155       16,955       15,093       —         5,438         324,686  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Total liabilities and equity

    797,647       46,372       41,278       (484     72,378         910,819  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

 

(1)

Please see “3 Foreign currency adjustments.”

(2)

Consists of property, plant and equipment of $7,109 and operating lease right of use asset of $7,542.

(3)

Consists of operating lease liabilities of $6,542 and other liabilities of $6.

(4)

Consists of accrued expenses of $7,464 and operating lease liabilities of $1,241.



 

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Table of Contents

Unaudited Pro Forma Condensed Statement of Operations

For the period ended December 31, 2019

(in thousands, except for per share information)

 

    BioNTech SE
Historical IFRS

EUR
    Neon
Therapeutics
Inc.

Historical
USGAAP

USD
    Neon
Therapeutics
Inc.

Historical
USGAAP

EUR(1)
    Neon
Therapeutics
Inc.

IFRS
Adjustments
EUR(1)
    Pro Forma
Adjustments
EUR(1)
    Notes     Pro Forma
Combined
EUR(1)
 

Revenue

    108,589       —         —         —         —           108,589  

Cost of sales

    (17,361     —         —         —         —           (17,361

Research and development expenses

    (226,466     (59,718     (53,768     (181     (1,231     2 a), 2 b)       (281,646

Sales and marketing expenses

    (2,718     —         —         —         —           (2,718

General and administrative expense

    (45,547     (21,420     (19,286     (705     —         2 a), 2 b)       (65,538

Other operating income

    2,724       —         —         —         —           2,724  

Other operating expenses

    (739     —         —         —         —           (739
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Operating loss

    (181,518     (81,138     (73,054     (886     (1,231       (256,689

Finance income, net

    2,078       1,401       1,261       (723     —         2 a)       2,616  

Other expenses

    —         (39     (35     —         —           (35
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Loss before tax

    (179,440     (79,776     (71,828     (1,609     (1,231       (254,108

Income taxes

    268       —         —         —         —           268  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Loss for the period

    (179,172     (79,776     (71,828     (1,609     (1,231       (253,840
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Net loss attributable to non-controlling interests

    (116     —         —         —         —           (116

Net loss attributable to common stockholders

    (179,056     (79,776     (71,828     (1,609     (1,231       (253,724
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

     

 

 

 

Basic and diluted loss per share

    (0.85               (1.19
 

 

 

             

 

 

 

Weighted-average shares

    211,499                 213,309  

 

(1)

Please see “3 Foreign currency adjustments.”



 

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Table of Contents

Notes to Unaudited Pro Forma Condensed Combined Financial Information

 

1

Basis of preparation

The historical consolidated financial statements of BioNTech and Neon have been adjusted in the pro forma condensed combined financial information to give effect to pro forma events that are (1) directly attributable to the business combination, (2) factually supportable and (3) with respect to the pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results following the business combination. The business combination was accounted for under the acquisition method of accounting in accordance with IFRS 3, Business Combinations. As the acquirer for accounting purposes, BioNTech has performed preliminary estimates of the fair value of Neon’s assets acquired and liabilities assumed and performed a high-level, preliminary conversion to conform the U.S. GAAP accounting policies of Neon to its own accounting policies under IFRS.

 

2

Accounting policy conformity changes

The historical financial information of Neon was prepared in accordance with U.S. GAAP. The following high-level, preliminary adjustments convert Neon’s financial information from U.S. GAAP to IFRS and align Neon’s accounting policies to those applied by BioNTech.

 

  a)

Neon adopted ASC 842 as of January 1, 2019 for lease accounting. For the year ended December 31, 2019, BioNTech applied IFRS 16 for lease accounting. The following adjustments reflect as if Neon had adopted IFRS 16 as of January 1, 2019:

 

 

Decrease in research and development expenses of k€394 and decrease of general and administrative expenses of k€88 and increase of finance expense of k€723 the year ended December 31, 2019, respectively, due to increased depreciation and reclassification of operating lease interest expense into finance expense.

 

 

Decrease in property, plant and equipment and total shareholder’s equity of k€484 as of December 31, 2019.

 

  b)

Increase in research and development expenses of k€575 and increase in general and administrative expenses of k€793 for the year ended December 31, 2019 reflect the change from straight-line method to the accelerated method of recognizing stock compensation expense per IFRS 2 and the reversal of mark-to-market expense for stock options granted to non-employees.

 

3

Foreign currency adjustments

The historical financial statements of Neon were presented in U.S. dollars. The historical financial information was translated from U.S. dollars to Euro using the following historical exchange rates:

 

     $ /€  

Average exchange rate for the year ended December 31, 2019

     1.11  

Period end exchange rate as of December 31, 2019

     1.12  

 

4

Financing transaction

BioNTech expects to complete the acquisition of Neon for 0.063 ADSs representing ordinary shares of BioNTech for each outstanding share of Neon common stock. BioNTech intends to finance the acquisition by issuing new ordinary shares.



 

28


Table of Contents

Preliminary purchase price allocation

BioNTech has performed a preliminary valuation analysis of the fair market value of Neon’s assets and liabilities. The following table summarizes the preliminary purchase price allocation as of the acquisition date (in thousands). The total consideration was calculated based on the outstanding shares of Neon as of December 31, 2019, 28,729,725, and included the relevant 30-day volume weighted average price on March 24, 2020 translated into Euro using the period end exchange rate as of December 31, 2019. The reference to this date intends to reflect the latest changes in share price upon a week prior to the date of this proxy statement/prospectus.

 

Total consideration

   92,641  

Intangible assets

   541  

Property, plant and equipment

   12,017  

In-process research and development

   20,922  

Prepaid expenses and other assets

   2,070  

Cash and cash equivalents

   26,166  

Long-term liabilities

   (5,829

Accounts payable

   (1,515

Other liabilities

   (7,749

Deferred tax liabilities, net

   (5,438
  

 

 

 

Goodwill

   51,456  
  

 

 

 

This preliminary purchase price allocation has been used to prepare pro forma adjustments in the pro forma balance sheet and income statement. The final purchase price allocation will be determined when BioNTech has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments. The final allocation may include material changes in allocations to intangible assets such as licenses, technology and customer relationships as well as goodwill and other changes to assets and liabilities.

 

5

Pro forma adjustments

The pro forma adjustments are based on BioNTech’s preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:

 

  a)

Reflects the adjustment of intangible assets acquired by BioNTech to their estimated fair values. As part of the preliminary valuation analysis, BioNTech identified intangible assets in form of in-process research and development projects. The fair value of identifiable intangible assets is determined primarily using the income method approach. Since all information required to perform a detailed valuation analysis of Neon’s intangible assets could not be obtained as of the date of this filing, for purposes of these unaudited pro forma condensed combined financial information, BioNTech used certain assumptions based on publicly available data for the industry. Amortization for the in-process research and development in the amounts of k€1,231 for the year ended December 31, 2019 has been reflected in the pro forma statements of operations. These preliminary estimates of fair value will likely differ from final amounts BioNTech will calculate after completing a detailed valuation analysis, and the difference could have a material impact on the accompanying unaudited pro forma condensed combined financial information. A change in the valuation of intangible assets would correspond to an increase or decrease in the balance of goodwill.

 

  b)

Adjusts the deferred tax liabilities resulting from the acquisition. The estimated increase in deferred tax liabilities to k€5,438 stems primarily from the fair value adjustments for non-deductible intangible assets based on an estimated tax rate of 25.99%. This estimate of deferred income tax balances is preliminary and subject to change based on management’s final determination of the fair value of assets acquired and liabilities assumed by jurisdiction.



 

29


Table of Contents
  c)

Represents the elimination of the historical equity of Neon and the issuance of ordinary shares to finance the acquisition, as follows (in thousands):

 

Net equity proceeds from issuance of 0.063 American Depositary Shares of BioNTech per share of Neon

   92.641  

Less: historical Neon shareholders’ equity converted into Euro and IFRS adjusted as of December 31, 2019

   (25.701
  

 

 

 

Pro forma adjustment to shareholder’s equity

   66,940  
  

 

 

 

 

  d)

The adjustment reclassifies software assets of k€541 from property, plant and equipment to intangibles to conform the presentation of the balance of BioNTech’s presentation.

 



 

30


Table of Contents

UNAUDITED COMPARATIVE HISTORICAL AND PRO FORMA PER SHARE DATA

The table set forth below contains selected unaudited historical, pro forma and pro forma equivalent per share information for the BioNTech ADSs and shares of Neon common stock.

Historical Per Share Data for BioNTech Shares and Neon Common Stock

The historical per share data for BioNTech Shares and Neon common stock below is derived from the audited consolidated financial statements of each of BioNTech and Neon as of and for the year ended December 31, 2019, respectively. For BioNTech, this information is under IFRS. For Neon, this information is under U.S. GAAP.

Combined Unaudited Pro Forma Per Share Data for BioNTech Shares

The combined unaudited pro forma per share data for BioNTech Shares is extracted from the pro forma financial statements appearing elsewhere in this proxy statement/prospectus. The pro forma financial statements are based on, and should be read in conjunction with, the historical consolidated financial statements and accompanying notes of each of BioNTech and Neon for the applicable periods, which are included elsewhere in this proxy statement/prospectus. See “Unaudited Pro Forma Condensed Combined Financial Information” located elsewhere in this proxy statement/prospectus for additional information.

The combined unaudited pro forma per share data for BioNTech Shares does not purport to represent what the Combined Company’s actual results of operations or financial condition would have been had the acquisition occurred on the dates assumed, nor is it necessarily indicative of the Combined Company’s future results of operations or financial condition. In particular, the unaudited pro forma combined financial information does not reflect the effect of anticipated cost and revenue synergies associated with the combination of BioNTech and Neon.

Combined Unaudited Pro Forma Per Neon Equivalent Share Data

The combined unaudited pro forma per Neon equivalent share data set forth below shows the effect of the Merger from the perspective of an owner of Neon common stock. The information was calculated by multiplying the unaudited pro forma combined per share data for BioNTech Shares by the exchange rate at the end of the applicable period.

Because the number of BioNTech Shares to be exchanged for each share of Neon common stock will be adjusted based on the shares of Neon common stock outstanding at the Effective Time, the notional value of the Merger Consideration and the exact number of BioNTech Shares that will be issued to Neon stockholders as of the date of the Neon Special Meeting and as of the closing date of the Merger cannot be determined with precision in advance of the Effective Time.

Generally

You should read the below information in conjunction with the selected consolidated financial information of BioNTech and Neon included elsewhere in this proxy statement/prospectus, the historical consolidated financial statements of BioNTech and related notes included elsewhere in this proxy statement/prospectus and the historical consolidated financial statements of Neon and related notes of Neon that have been filed with the SEC and included elsewhere in this proxy statement/prospectus. See “Selected Consolidated Financial Information of BioNTech” and “Selected Financial Information of Neon” included elsewhere in this proxy statement/prospectus.



 

31


Table of Contents
     As of and for
the Year
Ended
December 31,
2019
 

BioNTech Historical Data (€):

  

Basic income from continuing operations per share

     (0.85

Diluted income from continuing operations per share

     (0.85

Book value per share

     2.33  

Cash dividends declared per share

     —    

Neon Historical Data ($):

  

Basic income from continuing operations per share

     (2.86

Diluted income from continuing operations per share

     (2.86

Book value per share

     1.06  

Cash dividends declared per share

     —    

Combined Unaudited Pro Forma per BioNTech Share Data (€):

  

Basic income from continuing operations per share

     (1.19

Diluted income from continuing operations per share

     (1.19

Book value per share

     2.75  

Cash dividends declared per share

     —    

Combined Unaudited Pro Forma per Neon Equivalent Share Data (€):

  

Basic income from continuing operations per share

     (0.07

Diluted income from continuing operations per share

     (0.07

Book value per share

     0.17  

Cash dividends declared per share

     —    


 

32


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COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

Comparative Per Share Market Price Information

BioNTech ADSs and shares of Neon common stock are both traded on Nasdaq under the symbols “BNTX” and “NTGN”, respectively. The following table presents the high and low price per share of BioNTech ADSs and shares of Neon common stock on January 15, 2020, the last full trading day before public announcement that BioNTech and Neon had entered into the Merger Agreement, and March 26, 2020, the last practicable trading day before the date of this proxy statement/prospectus.

 

     BioNTech
ADSs
     Neon
Common Stock
 
Date    High      Low      Close      High      Low      Close  

January 15, 2020

     39.85        33.60        34.55        1.29        1.19        1.23  

March 26, 2020

     55.75        50.00        55.00        2.30        2.12        2.30  

For illustrative purposes, the following table provides the equivalent high and low price per share of Neon common stock on each of the specified dates. These equivalent high and low price per share amounts reflect the fluctuating value of BioNTech ADSs that Neon stockholders would receive in exchange for each share of Neon common stock if the Merger were completed on either of these dates and are calculated by multiplying the high and low price per share of BioNTech ADSs by the exchange ratio of 0.063.

 

     BioNTech
ADSs
     Neon Equivalent
Per Share
 
Date    High      Low      Close      High      Low      Close  

January 15, 2020

     39.85        33.60        34.55        2.51        2.12        2.18  

March 26, 2020

     55.75        50.00        55.00        3.51        3.15        3.47  

The market value of the BioNTech ADSs to be issued in exchange of shares of Neon common stock upon the completion of the Merger will not be known at the time of the Neon Special Meeting. The above tables show only historical comparisons. Because the market prices of BioNTech ADSs and shares of Neon common stock will likely fluctuate prior to the Merger, these comparisons may not provide meaningful information to Neon stockholders in determining whether to approve the Merger Proposal. Neon stockholders are encouraged to obtain current market quotations for shares of BioNTech ADSs and Neon common stock and to review carefully the other information contained in this proxy statement/prospectus in considering whether to approve the Merger Proposal.

Comparative Stock Prices and Dividends

The following tables set forth, for the periods indicated, the high and low sale prices per share of BioNTech common stock as reported by Nasdaq and the high and low sale prices per share Neon common stock as reported by Nasdaq. The table also provides information as to dividends paid per share of BioNTech common stock and Neon common stock. As of March 26, 2020 the last practicable trading day prior to the mailing of this proxy statement/prospectus, there were 226,779,744 shares of BioNTech common stock issued and outstanding and approximately 66 shareholders of record and 28,931,978 shares of Neon common stock issued and outstanding and approximately 32 shareholders of record.



 

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BioNTech

 

     Common Stock Price  

Quarterly Data

       High              Low      

Fourth Quarter 2019 Fiscal Year (beginning October 10, 2019)

   $ 38.75      $ 12.53  

Neon

 

     Common Stock Price  

Quarterly Data

       High              Low      

Fourth Quarter 2019 Fiscal Year

   $ 2.34      $ 0.88  

Neon has never declared or paid dividends on its common stock and does not anticipate declaring or paying any cash dividends for the foreseeable future. Neon anticipates that we will retain future earnings for the development, operation and expansion of its business.

BioNTech has never declared or paid dividends on its ADSs and does not anticipate paying any cash dividends in the foreseeable future, if ever. It is the present policy of the BioNTech Supervisory Board and BioNTech Management Board to retain its earnings, if any, for the development of its business.



 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains statements that constitute forward-looking statements (including within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). Many of the forward-looking statements contained in this proxy statement/prospectus can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “foresee,” “should,” “plan,” “intend,” “estimate,” “would,” “may,” “outlook,” and “potential,” among others. The absence of these words, however, does not mean that the statements are not forward-looking.

Forward-looking statements appear in a number of places in this proxy statement/prospectus and include, but are not limited to, statements regarding intent, belief or current expectations. Forward-looking statements are based on the current beliefs and assumptions of the management of BioNTech and Neon and on information currently available to such management. While the management of BioNTech and Neon believe that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments will be as anticipated. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to of various factors, including, but not limited to, those identified under “Risk Factors” located elsewhere in this proxy statement/prospectus. These risks and uncertainties include factors relating to:

 

   

the ability to satisfy the conditions to the Merger, including the ability to obtain the shareholder approval solicited hereby, on the proposed terms and timeframe;

 

   

the ability to realize the anticipated benefits of transactions related to the Merger and other acquisitions, restructuring activities, including in connection with the Merger, or other initiatives in a timely manner or at all;

 

   

the risk of unanticipated costs, liabilities or delays relating to the Merger, including the outcome of any legal proceedings relating to the Merger;

 

   

the occurrence of any change, effect, event, development, matter, state of facts, series of events or circumstances that could give rise to the termination of the Merger Agreement, including a termination of the Merger Agreement under circumstances that could require Neon to pay a termination fee to BioNTech;

 

   

the effect of the announcement of the Merger on Neon’s and BioNTech’s business relationships, employees, customers, suppliers, vendors, other partners, standing with regulators, operating results and businesses generally;

 

   

risks relating to expectations regarding the capitalization, resources and ownership of the Combined Company;

 

   

the initiation, timing, progress, results, and cost of research and development programs and current and future preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and research and development programs;

 

   

the timing of and ability to obtain and maintain regulatory approval for product candidates;

 

   

the ability to identify research opportunities and discover and develop investigational medicines;

 

   

the ability and willingness of third-party collaborators to continue research and development activities relating to development candidates and investigational medicines;

 

   

expectations regarding the size of the patient populations for product candidates, if approved for commercial use;

 

   

the impact of the COVID-19 pandemic on development programs, supply chains, collaborators and financial performance;



 

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estimates of expenses, ongoing losses, future revenue and capital requirements and needs for or ability to obtain additional financing;

 

   

the ability to identify, recruit and retain key personnel;

 

   

the ability to protect and enforce intellectual property protection for proprietary and collaborative product candidates, and the scope of such protection;

 

   

the development of and projections relating to competitors or industries;

 

   

the ability to commercialize product candidates, if approved;

 

   

the pricing and reimbursement of investigational medicines, if approved;

 

   

the rate and degree of market acceptance of investigational medicines;

 

   

the amount of and ability to use net operating losses and research and development credits to offset future taxable income;

 

   

the ability to manage development and expansion;

 

   

regulatory developments in the United States and foreign countries;

 

   

the ability to manufacture product candidates with advantages in turnaround times or manufacturing cost; and

 

   

the ability to implement, maintain and improve effective internal controls; and expectations regarding the time during which the Combined Company will be an emerging growth company under the JOBS Act and a foreign private issuer.

Each of the factors listed above may be affected by the COVID-19 pandemic currently affecting the global community and the global economy.

The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the parties’ businesses, including those described in this proxy statement/prospectus, as well as in BioNTech’s Annual Report on Form 20-F and Reports on Form 6-K, and in Neon’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other documents filed from time to time with the SEC.

Forward-looking statements speak only as of the date they are made, and neither BioNTech nor Neon undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.



 

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RISK FACTORS

In addition to the other information included in this proxy statement/prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements” located elsewhere in this proxy statement/prospectus, you should carefully consider the following risk factors in connection with your consideration of the Merger before deciding whether to vote for approval of the Merger Proposal. In addition, you should read and consider the risks associated with each of the businesses of BioNTech and Neon because these risks will relate to the Combined Company. The risks and uncertainties described below are not the only risks and uncertainties the parties may face. Additional risks and uncertainties not presently known to the parties, or that the parties currently consider immaterial, could also negatively affect the business, financial condition, results of operations, prospects, profits and stock prices of BioNTech, Neon or the Combined Company. If any of the risks described below actually occur, the business, financial condition, results of operations, prospects, profits and stock prices of BioNTech, Neon or the Combined Company could be materially adversely affected. You should also consider the other information in this proxy statement/prospectus.

Risk Factors Related to the Merger

The Merger is subject to a number of conditions, some of which are outside of the parties’ control, and, if these conditions are not satisfied, the Merger Agreement may be terminated and the Merger may not be completed.

The Merger Agreement contains a number of conditions that must be fulfilled (or waived by the parties) to complete the Merger. These conditions include, among other customary conditions, (i) the approval and adoption of the Merger Agreement by the Neon stockholders, (ii) the absence of an enacted or promulgated law by any governmental entity of competent jurisdiction that remains in effect that precludes, restrains, enjoins or prohibits the consummation of the Merger, (iii) the absence of any temporary restraining order, preliminary or permanent injunction or any other order in effect precluding, restraining, enjoining, prohibiting, suspending or making illegal the consummation of the Merger, (iv) the SEC having declared effective a registration statement on Form F-4 to be filed with the SEC and the absence of a stop order suspending such effectiveness issued by the SEC and remaining in effect and the absence of any proceeding initiated for that purpose by the SEC and not subsequently withdrawn, (v) the approval for listing on Nasdaq, subject to official notice of issuance, of the BioNTech ADSs to be issued in the Merger, (vi) subject to certain materiality exceptions, the accuracy of certain representations and warranties of each of the parties contained in the Merger Agreement and the compliance by each party with the covenants contained in the Merger Agreement, and (vii) the absence of a material adverse effect with respect to each of the parties thereto.

The required satisfaction (or waiver) of the foregoing conditions could delay the completion of the Merger for a significant period of time or prevent it from occurring. Any delay in completing the Merger could cause the Combined Company not to realize some or all of the benefits that the parties expect the Combined Company to achieve. Further, there can be no assurance that the conditions to the closing of the Merger will be satisfied or waived or that the Merger will be completed.

In addition, if the Merger is not completed by October 15, 2020 (subject to potential extensions), either BioNTech or Neon may choose to terminate the Merger Agreement. Either party may also elect to terminate the Merger Agreement in certain other circumstances, and the parties can mutually decide to terminate the Merger Agreement at any time prior to the closing of the Merger, before or after the receipt of the Neon Stockholder Approval, as applicable.

 

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Failure to complete the Merger could negatively affect BioNTech’s or Neon’s stock prices, future business and financial results.

If the Merger is not completed, the ongoing businesses of either or both parties may be adversely affected. Additionally, if the Merger is not completed and the Merger Agreement is terminated, in certain circumstances Neon may be required to pay BioNTech a termination fee. In addition, BioNTech and Neon have incurred and will continue to incur significant transaction expenses in connection with the Merger regardless of whether the Merger is completed. Furthermore, BioNTech or Neon may experience negative reactions from the financial markets, including negative impacts on our or their stock prices, or negative reactions from suppliers or other business partners, should the Merger not be completed.

The foregoing risks, or other risks arising in connection with the failure to consummate the Merger, including the diversion of management attention from conducting the business of the respective companies and pursuing other opportunities during the pendency of the Merger, may have a material adverse effect on BioNTech’s or Neon’s business, operations, financial results and share and stock prices. Either party could also be subject to litigation related to any failure to consummate the Merger or any related action that could be brought to enforce a party’s obligations under the Merger Agreement.

The Exchange Ratio is fixed and will not be adjusted in the event of any changes in either party’s stock price.

Upon completion of the Merger, each share of Neon common stock, excluding shares owned by the parties to the Merger Agreement, that is issued and outstanding immediately prior to the Effective Time will be automatically canceled and converted into the right to receive 0.063 of a BioNTech ADS without interest. This Exchange Ratio will not be adjusted for changes in the market price of either BioNTech ADSs or Neon common stock between the date the Merger Agreement was signed and completion of the Merger. As a result, changes in the price of BioNTech ADSs prior to the completion of the Merger will affect the value of BioNTech ADSs delivered upon completion of the Merger. An increase in the price of BioNTech ADSs will increase the value of the consideration BioNTech delivers. Similarly, a decrease in the price of Neon common stock will increase the premium that BioNTech pays per share of Neon common stock.

Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in BioNTech’s and Neon’s respective businesses, operations and prospects, risks inherent in their respective businesses, changes in market assessments of the likelihood that the Merger will be completed and/or the value that may be generated by the Merger, and changes with respect to expectations regarding the timing of the Merger and regulatory considerations.

Litigation against BioNTech and/or Neon, or the members of the Neon Board, could prevent or delay the completion of the Merger or result in the payment of damages following completion of the Merger.

It is a condition to the Merger that no temporary restraining order, preliminary or permanent injunction or any other order precluding, restraining, enjoining, prohibiting, suspending or making illegal the consummation of the Merger nor any law that precludes, restrains, enjoins or prohibits the consummation of the Merger shall have been issued by any governmental entity or a court of competent jurisdiction. No party to the Merger Agreement is aware of any lawsuit or proceeding specific to the Merger having been filed to date. If such a lawsuit or other proceeding is commenced and if in any such litigation or proceeding a plaintiff is successful in obtaining a restraining order or injunction prohibiting the consummation of the Merger Agreement or the transactions contemplated thereby, then the closing of the Merger may be delayed or may never occur. Even if the Merger is permitted to occur, the parties may be required to pay damages, fees or expenses in respect of claims related to the Merger or the transactions contemplated thereby.

 

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Some of the directors and executive officers of Neon have interests in the Merger that may be different from, or in addition to, the interests of Neon stockholders generally.

In considering whether to approve the proposals at the Neon Special Meeting, Neon stockholders should recognize that directors and executive officers of Neon have interests in the Merger that may differ from, or that are in addition to, their interests as Neon stockholders. The Neon Board was aware of these interests at the time it approved the Merger Agreement. These interests may cause Neon’s directors and executive officers to view the Merger differently than you may view it as a stockholder. See “The Merger—Interests of Neon Directors and Executive Officers in the Merger” located elsewhere in this proxy statement/prospectus.

Uncertainty about the Merger may adversely affect the relationships of the parties with their respective suppliers and employees, whether or not the Merger is completed.

In response to the announcement of the Merger, existing or prospective suppliers of either party may:

 

   

delay, defer or cease providing goods or services to BioNTech, Neon or the Combined Company;

 

   

delay or defer other decisions concerning BioNTech, Neon or the Combined Company, or refuse to extend credit to BioNTech, Neon or the Combined Company; or

 

   

otherwise seek to change the terms on which they do business with BioNTech, Neon or the Combined Company.

Any such delays or changes to terms could harm the business of each company or, if the Merger is completed, the Combined Company.

In addition, as a result of the Merger, current and prospective employees could experience uncertainty about their future with the Combined Company. These uncertainties may impair the Combined Company’s ability to retain, recruit or motivate key management, technical and other personnel.

The Merger Agreement contains provisions that limit Neon’s ability to pursue alternatives to the Merger, could discourage a potential competing acquiror of Neon from making an alternative transaction proposal and, in specified circumstances, could require Neon to pay a termination fee to BioNTech.

The Merger Agreement provides that Neon shall not, and requires Neon to refrain from permitting its representatives to, among other things, solicit, participate in negotiations with respect to or approve or recommend any third party proposal for an alternative transaction, subject to exceptions set forth in the Merger Agreement relating to the receipt of certain unsolicited proposals. If the Merger Agreement is terminated by either party, in certain circumstances, Neon may be required to pay a termination fee of $3,200,000.

These provisions could discourage a potential third-party acquiror or merger partner that might have an interest in acquiring all or a significant portion of Neon or pursuing an alternative transaction from considering or proposing such a transaction, even if it were prepared to pay consideration with a higher per share cash or market value than the consideration in the Merger, or might result in a potential third-party acquiror or merger partner proposing to pay a lower price to Neon stockholders than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.

If the Merger Agreement is terminated and Neon determines to seek another business combination, Neon may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger.

 

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Until the completion of the Merger or the termination of the Merger Agreement in accordance with its terms, in consideration of the agreements made by the parties in the Merger Agreement, BioNTech and Neon are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to BioNTech or Neon and their respective shareholders.

Until the Merger is completed, the Merger Agreement restricts BioNTech and Neon from taking specified actions without the consent of the other party, and, in regards to Neon, requires Neon to operate in the ordinary course of business consistent with past practice. These restrictions may prevent BioNTech and Neon from making appropriate changes to their respective businesses or pursuing attractive business opportunities that may arise prior to the completion of the Merger. See “The Merger Agreement—Restrictions on Neon’s Business Pending the Closing of the Merger” and “—Restrictions on BioNTech’s Business Pending the Closing of the Merger” located elsewhere in this proxy statement/prospectus for a description of the restrictive covenants applicable to each of BioNTech and Neon.

After the Merger, Neon stockholders will have a significantly lower ownership and voting interest in the Combined Company than they currently have in Neon, and will exercise less influence over management.

As of immediately following the Effective Time, Neon stockholders will own a significantly smaller percentage of the Combined Company than their ownership of Neon prior to the Merger. After the completion of the Merger, former Neon stockholders are expected to own approximately 0.85% of the outstanding equity interests in the Combined Company on an undiluted basis. These estimates are based on the anticipated Exchange Ratio and are subject to adjustment as provided in the Merger Agreement. Consequently, Neon stockholders will have less influence over the management and policies of the Combined Company than they currently have over Neon.

The opinion of Neon’s financial advisor does not reflect changes in circumstances that may occur between the original signing of the Merger Agreement and the completion of the Merger.

Consistent with market practices, the Neon Board has not obtained an updated opinion from its financial advisor as of the date of this proxy statement/prospectus and does not expect to receive an updated, revised or reaffirmed opinion prior to the completion of the Merger. Changes in the operations and prospects of Neon, general market and economic conditions and other factors that may be beyond the control of Neon, and on which Neon’s financial advisor’s opinion was based, may significantly alter the value of Neon or the price of shares of Neon common stock by the time the Merger is completed. The opinion does not speak as of the time the Merger will be completed or as of any date other than the date of such opinion. Because Neon’s financial advisor will not be updating its opinion, the opinion will not address the fairness of the Merger Consideration from a financial point of view at the time the Merger is completed. The Neon Board’s recommendation that Neon stockholders vote “FOR” the Merger Proposal, however, is made as of the date of this proxy statement/prospectus. For a description of the opinion that the Neon Board received from its financial advisor, please refer to “The Merger—Opinion of Neon’s Financial Advisor” located elsewhere in this proxy statement/prospectus.

If the merger does not qualify as a “reorganization” for U.S. federal income tax purposes, U.S. holders of shares of Neon common stock will be required to recognize gain or loss for U.S. federal income tax purposes at the time of the exchange of their Neon common stock for the Merger Consideration in the Merger.

The U.S. federal income tax considerations of the Merger applicable to U.S. holders (as defined under the heading “Certain Material U.S. Federal Income Tax Considerations”) will depend on whether the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, or the Code. The Merger is conditioned upon the delivery of legal opinions from Goodwin Procter LLP and Covington & Burling LLP to Neon and BioNTech, respectively, substantially to the effect that the Merger (i) will constitute a reorganization within the meaning of Section 368(a) of the Code, and (ii) will not result in the recognition of gain under Section 367(a)(1) of the Code by any holder of shares of Neon common stock (other than any holder of shares of Neon common stock that is a five-percent transferee shareholder of BioNTech within

 

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the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii) immediately following the Merger or that held BioNTech Shares or BioNTech ADSs immediately prior to the Merger).

There can be no assurance, that the Internal Revenue Service, or the IRS, will not take a contrary position to views expressed herein or that a court will not agree with a contrary position of the IRS. If, contrary to the opinion from counsel, the Merger fails to qualify as a reorganization or if any requirement for the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code is not satisfied, a U.S. holder would recognize gain or loss for U.S. federal income tax purposes on each share of Neon common stock surrendered in the Merger in an amount equal to the difference between (1) the fair market value of the Merger Consideration received in exchange for such surrendered share upon completion of the Merger and (2) the holder’s basis in the share of Neon common stock surrendered. Any gain or loss recognized would be long-term capital gain or loss if the U.S. holder’s holding period in a particular block of Neon common stock exceeds one year at the Effective Time of the merger. Long-term capital gain of non-corporate U.S. holders (including individuals) is taxed at reduced U.S. federal income tax rates. The deductibility of capital losses is subject to limitations. For a more complete discussion of the material U.S. federal income tax consequences of the Merger, please carefully review the information set forth in “Certain Material U.S. Federal Income Tax Considerations” located elsewhere in this proxy statement/prospectus.

Risk Factors Related to the Combined Company

The Combined Company may not fully realize the anticipated benefits of the Merger or realize such benefits within the timing anticipated.

The parties entered into the Merger Agreement because each company believes that the Merger will be beneficial to each company and its respective shareholders. The Combined Company may not be able to achieve the anticipated long-term strategic benefits of the Merger within the timing anticipated or at all. For example, the benefits from the Merger will be partially offset by the costs incurred in completing the transaction. Any delays and challenges that may be encountered in completing the Merger or in the post-Merger process of consolidation could have an adverse effect on the business and results of operations of the Combined Company, and may affect the value of BioNTech Shares and the BioNTech ADSs representing the BioNTech Shares after the completion of the Merger.

The Combined Company will incur significant transaction-related costs in connection with the Merger.

BioNTech and Neon expect to incur significant costs associated with the Merger. The amount of these costs may not be determined as of the Effective Time and may be material to the financial position and results of operations of the Combined Company. We expect that the substantial majority of expenses resulting from the Merger will be comprised of transaction costs related to the Merger and employee-related costs. BioNTech and Neon will also incur fees and costs related to integration and systems consolidation. The elimination of duplicative costs may not offset incremental transaction-related and other integration costs in the near term.

The Combined Company’s goodwill or other intangible assets may become impaired, which could result in material non-cash charges to its results of operations.

The Combined Company will have a substantial amount of goodwill and other intangible assets resulting from the Merger. At least annually, or whenever events or changes in circumstances indicate a potential impairment in the carrying value as defined by IFRS, the Combined Company will evaluate this goodwill for impairment based on the recoverable value, being the higher of fair value less costs to sell and value in use, of the cash generating units to which goodwill has been allocated. Estimated fair values could change if there are changes in the Combined Company’s capital structure, cost of debt, interest rates, capital expenditure levels, operating cash flows or market capitalization. Impairments of goodwill or other intangible assets could require material non-cash charges to the Combined Company’s results of operations.

 

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Future results of the Combined Company may differ materially from the unaudited pro forma financial information included in this proxy statement/prospectus.

The Combined Company’s future results may be materially different from those shown in the unaudited pro forma financial information presented in this proxy statement/prospectus that show only a combination of our and Neon’s historical results. BioNTech expects to incur significant costs associated with completing the Merger and combining the operations of the two companies, and the exact magnitude of these costs is not yet known. Furthermore, these costs may decrease capital that could be used by BioNTech for future income-earning investments.

The financial analyses and forecasts considered by BioNTech, Neon and our respective financial advisors may not be realized.

While the financial projections utilized by BioNTech, Neon and our respective advisors in connection with the Merger were prepared in good faith based on information available at the time of preparation, no assurances can be made regarding future events or that the assumptions made in preparing such projections will accurately reflect future conditions. In preparing such projections, our management and the management of and Neon made assumptions regarding, among other things, future economic, competitive, regulatory and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant uncertainties and contingencies, including, among others, risks and uncertainties described in this section and in “Cautionary Statement Regarding Forward-Looking Statements,” all of which are difficult to predict and many of which are beyond the control of BioNTech and Neon and will be beyond the control of the Combined Company. There can be no assurance that the underlying assumptions or projected results will be realized, and actual results will likely differ, and may differ materially, from such projections, which could result in a material adverse effect on the Combined Company’s business, financial condition, results of operations and prospects.

Risk Factors Related to the BioNTech ADSs

The price of the ADSs may be volatile and fluctuate substantially, which could result in substantial losses.

The market price of the ADSs is likely to be volatile. The stock market in general, and the market for biopharmaceutical companies in particular, has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell the ADSs at or above the price at which you obtained the ADSs. The market price for the ADSs may be influenced by many factors, including:

 

   

results of clinical trials of BioNTech’s product candidates or those of BioNTech’s competitors;

 

   

the success of competitive products or technologies;

 

   

commencement or termination of collaborations;

 

   

regulatory or legal developments in the United States and other countries;

 

   

developments or disputes concerning patent applications, issued patents, or other intellectual property or proprietary rights;

 

   

the recruitment or departure of key personnel;

 

   

the level of expenses related to any of BioNTech’s product candidates or clinical development programs;

 

   

the results of BioNTech’s efforts to discover, develop, acquire or in-license additional product candidates;

 

   

actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

 

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variations in BioNTech’s financial results or those of companies that are perceived to be similar to BioNTech;

 

   

changes in the structure of healthcare payment systems;

 

   

market conditions in the pharmaceutical and biotechnology sectors;

 

   

general economic, industry and market conditions; and

 

   

the numerous programs in BioNTech’s pipeline, the development of which could each generate news or significant adverse events that could impact financial results or recommendations by securities analysts.

If BioNTech’s quarterly or annual results fall below the expectations of investors or securities analysts, the price of the ADSs could decline substantially. Furthermore, any quarterly or annual fluctuations in BioNTech’s results may, in turn, cause the price of the ADSs to fluctuate substantially. BioNTech believes that period-to-period comparisons of its results are not necessarily meaningful and should not be relied upon as an indication of its future performance.

In the past, following periods of volatility in the market price of a company’s securities, securities class- action litigation often has been instituted against that company. Such litigation, if instituted against BioNTech, could cause BioNTech to incur substantial costs to defend such claims and divert management’s attention and resources, which could seriously harm BioNTech’s business, financial condition, results of operations and prospects.

BioNTech has incurred increased costs as a result of operating as a public company, and its management has been required to devote substantial time to new compliance initiatives. BioNTech is subject to financial reporting and other requirements for which its accounting and other management systems and resources may not be adequately prepared. BioNTech may fail to comply with the rules that apply to public companies, includingSection 404 of the Sarbanes-Oxley Act of 2002, which could result in sanctions or other penalties that would harm the business.

As a public company, and particularly after BioNTech is no longer an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, BioNTech expects to incur significant legal, accounting and other expenses that it did not incur as a private company. BioNTech expects that it will cease to be an emerging growth company beginning January 1, 2021. In addition, the federal securities laws, including the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and rules subsequently implemented by the SEC and Nasdaq have imposed various requirements on public companies, including requirements to file annual and event-driven reports with respect to BioNTech’s business and financial condition, and to establish and maintain effective disclosure and financial controls and corporate governance practices. BioNTech’s management and other personnel need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have increased BioNTech’s legal and financial compliance costs and have made some activities more time-consuming and costly. BioNTech may not be able to produce reliable financial statements or file these financial statements as part of a periodic report in a timely manner with the SEC or comply with Nasdaq listing requirements. In addition, BioNTech could make errors in its financial statements that could require it to restate its financial statements.

Pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, concurrent with BioNTech’s second Annual Report on Form 20-F BioNTech is required to furnish a report by its management on its internal control over financial reporting, including the attestation report on internal control over financial reporting issued by its independent registered public accounting firm. However, while BioNTech remains an emerging growth company, BioNTech will not be required to include an attestation report on internal control over financial reporting issued by its independent registered public accounting firm in its annual filings with the SEC. To achieve compliance with Section 404 within the prescribed period, BioNTech has initiated the process to

 

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document and evaluate its internal control over financial reporting, which is both costly and challenging. In this regard, BioNTech will need to continue to dedicate internal resources, have engaged outside consultants, and are adopting a detailed work plan to assess and document the adequacy of internal control over financial reporting. BioNTech will continue to implement steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting. Despite BioNTech’s efforts, there is a risk that neither it nor its independent registered public accounting firm (once BioNTech is no longer an emerging growth company) will be able to conclude within the prescribed timeframe that its internal control over financial reporting is effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of BioNTech’s financial statements.

In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas such as “say on pay” and proxy access. Recent legislation permits emerging growth companies to implement many of these requirements over a longer period and up to five years from the pricing of initial public offerings. BioNTech intends to take advantage of this new legislation but cannot guarantee that it will not be required to implement these requirements sooner than budgeted or planned and thereby incur unexpected expenses. Shareholder activism, the current political environment, and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which BioNTech operates its business in ways BioNTech cannot currently anticipate. BioNTech’s management and other personnel need to devote a substantial amount of time to these compliance initiatives.

BioNTech has identified a material weakness in its internal control over financial reporting and may identify additional material weaknesses in the future that may cause it to fail to meet its reporting obligations or result in material misstatements in its financial statements. If BioNTech fails to remediate its material weakness, BioNTech may not be able to report its financial results accurately or to prevent fraud.

BioNTech’s management is responsible for establishing and maintaining internal control over financial reporting, disclosure controls, and compliance with the other requirements of the Sarbanes-Oxley Act and the rules promulgated by the SEC thereunder. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with international financial reporting standards. A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected by the company’s internal controls on a timely basis.

Prior to BioNTech’s initial public offering, BioNTech operated as a private company that was not required to comply with the obligations of a public company with respect to internal control over financial reporting. BioNTech has historically operated with limited accounting personnel and other resources with which to address its internal control over financial reporting.

BioNTech and its auditors identified a material weakness primarily related to (i) a lack of sufficient accounting and supervisory personnel who have the appropriate level of technical accounting experience and training, (ii) a lack of supervision over external consultants providing technical accounting services and (iii) a lack of consistent application of accounting processes and procedures by BioNTech’s accounting personnel. These deficiencies constitute a material weakness in BioNTech’sr internal control over financial reporting in both design and operation. As a result of the material weakness, management failed to identify audit adjustments in various areas, including but not limited to revenue, capitalization of tangible and intangible assets, and share-based compensation. BioNTech has relied on the assistance of outside advisors with expertise in these matters to

 

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prepare its financial statements and comply with SEC reporting obligations, and BioNTech expects to continue to do so while it remediates this material weakness.

BioNTech is continuing to develop and implement a remediation plan to address the material weakness; however, BioNTech’s overall control environment still requires enhancement and may expose it to errors, losses or fraud. BioNTech’s remediation plan includes the hiring of additional suitably qualified staff. Additionally, BioNTech intends to document and implement consistent accounting policies and procedures and provide additional training to its accounting and finance staff. While BioNTech is working to remediate the material weakness as quickly and efficiently as possible, BioNTech cannot at this time provide an estimate of the costs it expects to incur or the expected timeline in connection with implementing its remediation plan. These remediation measures may be time-consuming and costly, and might place significant demands on its financial and operational resources. If BioNTech is unable to successfully remediate this material weakness or successfully supervise and rely on outside advisors with expertise in these matters to assist in the preparation of its financial statements, BioNTech’s financial statements could contain material misstatements that, when discovered in the future, could cause it to fail to meet its future reporting obligations and cause the price of BioNTech ADSs to decline.

BioNTech is an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make BioNTech Shares and the ADSs less attractive to investors.

BioNTech is an “emerging growth company” under the JOBS Act, and it will remain an emerging growth company until the earlier of:

 

   

the last day of the first fiscal year in which its annual gross revenues exceed $1.07 billion;

 

   

the date on which it has issued more than $1 billion in nonconvertible debt securities during the previous three years;

 

   

the date on which it is deemed to be a large accelerated filer under the rules of the SEC, which means the first day of the year following the first year in which, as of the last business day of its most recently completed second fiscal quarter, the market value of its common equity held by non-affiliates exceeds $700 million; and

 

   

the last day of the fiscal year following the fifth anniversary of the date of the completion of its initial public offering.

BioNTech expects that it will cease to be an emerging growth company beginning January 1, 2021. For so long as it remains an emerging growth company, BioNTech is permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to public companies that are not emerging growth companies. These exemptions include:

 

   

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes- Oxley Act;

 

   

not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

 

   

reduced disclosure obligations regarding executive compensation; and

 

   

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

BioNTech may choose to take advantage of some, but not all, of the available exemptions. BioNTech has taken advantage of reduced reporting burdens in this proxy statement/prospectus. In particular, BioNTech has not included all of the executive compensation information that would be required if it were not an emerging growth company. BioNTech cannot predict whether investors will find the ADSs less attractive if it relies on certain or all of these exemptions. If some investors find the ADSs less attractive as a result, there may be a less active trading market for the ADSs and the price per ADS may be more volatile.

 

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In addition, the JOBS Act provides that an emerging growth company may take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Such provisions are only applicable under U.S. GAAP. As a result, BioNTech will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required or permitted by the IASB.

As a “foreign private issuer,” BioNTech is exempt from a number of rules under the U.S. securities laws, as well as Nasdaq rules, and BioNTech is permitted to file less information with the SEC than are U.S. companies. This may limit the information available to holders of the ADSs and may make BioNTech Shares and the ADSs less attractive to investors.

BioNTech is a “foreign private issuer,” as defined in the rules and regulations of the SEC, and, consequently, BioNTech is not subject to all of the disclosure requirements applicable to companies organized within the United States. For example, BioNTech is exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, BioNTech’s officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of BioNTechsecurities. Moreover, BioNTech is not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. Accordingly, there may be less publicly available information concerning BioNTech than there is for U.S. public companies.

As a foreign private issuer, BioNTech will file an Annual Report on Form 20-F within four months of the close of each fiscal year ending December 31 and reports on Form 6-K relating to certain material events promptly after BioNTech publicly announces these events. Additionally, BioNTech relies on a provision in Nasdaq’s Listed Company Manual that allows BioNTech to follow German company law and European law applicable to European stock corporations in general and the German Stock Corporation Act (Aktiengesetz), the Council Regulation (EC) No 2157/2001 of October 8, 2001 on the Statute for a European company (SE), or the SE Regulation, and the German Act on the Implementation of Council Regulation (EC) No 2157/2001 of October 8, 2001 on the Statute for a European company (SE) (Gesetz zur Ausführung der Verordnung (EG) NR. 2157/2001 des Rates vom 8. Oktober 2001 über das Statut der Europäischen Gesellschaft (SE)) (SE-Ausführungsgesetz—SEAG), in particular with regard to certain aspects of corporate governance. This allows BioNTechto follow certain corporate governance practices that differ in significant respects from the corporate governance requirements applicable to U.S. companies listed on Nasdaq.

For example, BioNTech is exempt from regulations of Nasdaq that require a listed U.S. company to:

 

   

have a majority of the board of directors consist of independent directors;

 

   

require non-management directors to meet on a regular basis without management present;

 

   

adopt a code of conduct and promptly disclose any waivers of the code for directors or executive officers that should address certain specified items;

 

   

have an independent compensation committee;

 

   

have an independent nominating committee;

 

   

solicit proxies and provide proxy statements for all shareholder meetings;

 

   

review related party transactions; and

 

   

seek shareholder approval for the implementation of certain equity compensation plans and issuances of BioNTech Shares.

 

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As a foreign private issuer, BioNTech is permitted to follow home country practice in lieu of the above requirements. BioNTech therefore continues to follow German corporate governance practices in lieu of the corporate governance requirements of Nasdaq in certain respects. In particular, BioNTech follows German corporate governance practices in connection with the distribution of annual and interim reports to shareholders, the application of BioNTech’s code of conduct to its Supervisory Board, proxy solicitation in connection with shareholders’ meetings, and obtaining shareholder approval in connection with the establishment of or material amendment to certain equity- based compensation plans.

In accordance with BioNTech’s Nasdaq listing, BioNTech’s audit committee is required to comply with the provisions of Section 301 of the Sarbanes-Oxley Act, and Rule 10A-3 of the Exchange Act, both of which are also applicable to U.S. companies listed on Nasdaq. As BioNTech is a foreign private issuer, however, BioNTech’s audit committee is not subject to additional requirements of Nasdaq applicable to listed U.S. companies, including an affirmative determination that all members of the audit committee are “independent,” using more stringent criteria than those applicable to BioNTech as a foreign private issuer.

Due to the above exemptions for foreign private issuers, BioNTech’s shareholders will not be afforded the same protections or information generally available to investors holding shares in public companies organized in the United States, some investors may find the ADSs less attractive as a result, and there may be a less active trading market for the ADSs.

A significant portion of BioNTech’s total outstanding BioNTech Shares will be restricted from immediate resale but may be sold in the near future. The large number of shares eligible for sale or subject to rights requiring BioNTech to register them for sale could cause the market price of the ADSs to drop significantly, even if BioNTech’s business is performing well.

Sales of a substantial number of BioNTech Shares or the ADSs could occur at any time, subject to certain restrictions described below. These sales, or the perception in the market that holders of a large number of shares intend to sell shares, could reduce the market price of the ADSs. As of December 31, 2019, BioNTech had 226,779,744 ordinary shares outstanding.

In connection with BioNTech’s initial public offering, BioNTech, all of its directors and officers, and substantially all of its shareholders entered into lock-up agreements with the underwriters and/or are subject to market standoff agreements or other agreements with BioNTech under which BioNTech and they agreed, subject to specific exceptions, not to sell any of BioNTech’s shares for at least 180 days following the date of BioNTech’s initial public offering. The remaining BioNTech Shares will be available for sale since they are not subject to contractual and legal restrictions on resale. Any or all of the shares subject to lock-up agreements may be released prior to the expiration of the lock-up period at the discretion of the lead underwriters for the respective offerings. To the extent shares are released before the expiration of the lock-up period and these shares are sold into the market, the market price of the ADSs could decline.

BioNTech intends to file one or more registration statements on Form S-8 under the Act to register all BioNTech Shares issued or issuable under BioNTech’s equity plans. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market following the expiration of the applicable lock-up period.

Sales of ADSs or BioNTech Shares as restrictions end or pursuant to registration rights may make it more difficult for BioNTech to finance its operations through the sale of equity securities in the future at a time and at a price that BioNTech deems appropriate. These sales also could cause the trading price of the ADSs to fall and make it more difficult for BioNTech to sell the ADSs.

 

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Holders of the ADSs are not treated as shareholders of BioNTech and will not have the same voting rights as BioNTech shareholders, which may affect the value of the ADSs.

Holders of ADSs are not treated as BioNTech shareholders unless they cancel the ADSs and withdraw the BioNTech Shares underlying the ADSs from the depositary, which is the holder of the BioNTech Shares underlying the ADSs. Holders of ADSs, therefore, do not have any rights as shareholders of BioNTech, other than the rights that they have pursuant to the deposit agreement. As such, holders of ADSs will not be able to directly vote underlying BioNTech Shares. Holders of ADSs may instruct the depositary how to vote the BioNTech Shares underlying their ADSs. If BioNTech asks it to, the depositary will send out information about shareholder meetings and solicit voting instructions and will try to carry out voting instructions it receives. However, BioNTech is not required to instruct the depositary to take action with respect to shareholder meetings. If BioNTech does not do so, holders of the ADSs can still send voting instructions to the depositary, and the depositary may try to carry out those instructions, but it is not required to do so. Holders of the ADSs may not become aware of shareholder meetings if the depositary does not send out information. Even if the depositary does solicit voting instructions, holders of ADSs may not receive the information in time. As a result of these factors, holders of ADSs may not be able to effectively exercise voting rights that they would have if they held BioNTech Shares directly.

If BioNTech sells BioNTech Shares or the ADSs in future financings, holders of ADSs may experience immediate dilution and, as a result, the price of the ADSs may decline.

BioNTech may from time to time issue additional BioNTech Shares or sell ADSs at a discount from the current trading price of BioNTech Shares or the ADSs. As a result, holders of ADSs would experience further immediate dilution upon the purchase of any BioNTech Shares or ADSs sold at such discount. In addition, as opportunities present themselves, BioNTech may enter into financing or similar arrangements in the future, including the issuance of debt securities, BioNTech Shares or ADSs. If BioNTech issues BioNTech Shares or securities convertible or exchangeable into BioNTech Shares, such as ADSs, holders of the ADSs would experience additional dilution and, as a result, the price of the ADSs may decline.

Raising additional capital may cause dilution to BioNTech existing shareholders, restrict BioNTech’s operations, or require BioNTech to relinquish rights to its technologies or product candidates.

BioNTech may seek additional capital through a combination of public and private equity offerings, debt financings, collaborations and licensing arrangements. To the extent that BioNTech raises additional capital through the sale of equity securities, including securities convertible or exchangeable into BioNTech Shares, your ownership interest will be diluted and the terms may include liquidation or other preferences that adversely affect your rights as a holder of ADSs. The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on BioNTech’s ability to incur additional debt, limitations on BioNTech’s ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact BioNTech’s ability to conduct its business. If BioNTech raises additional funds through collaborations and licensing arrangements with third parties or through asset sales, BioNTech may have to relinquish valuable rights to its technologies or product candidates, or grant licenses on terms unfavorable to BioNTech.

Holders of the ADSs may not be able to participate in any future preemptive subscription rights issues or elect to receive dividends in shares, which may cause additional dilution to their holdings.

Under German law, the existing shareholders of a company generally have a preemptive right in proportion to the amount of shares they hold in connection with any issuance of ordinary shares, convertible bonds, bonds with warrants, profit participation rights and participating bonds. However, a shareholders’ meeting may vote, by a majority representing at least three-quarters of the share capital represented at the meeting, to waive this preemptive right provided that, from the company’s perspective, there exists good and objective cause for such waiver.

 

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ADS holders will not be entitled to exercise or sell such rights unless BioNTech registers the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. In addition, the deposit agreement provides that the depositary need not make rights available to you unless the distribution to ADS holders of both the rights and any related securities are either registered under the Securities Act or exempted from registration under the Securities Act. BioNTech is under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, BioNTech may not be able to establish an exemption from registration under the Securities Act. Accordingly, ADS holders may be unable to participate in BioNTech’s rights offerings and may experience dilution in their holdings. In addition, if the depositary is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case you will receive no value for these rights.

U.S. holders of ADSs may suffer adverse tax consequences if BioNTech is characterized as a passive foreign investment company.

A non-U.S. corporation will be classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Passive income generally includes dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. In addition, a non-U.S. corporation will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, more than 25% (by value) of the stock.

Based on the current composition of BioNTech’s income and assets and the value of BioNTech’s assets, including goodwill, which is based on the current market price of the ADSs, BioNTech does not expect to be treated as a PFIC for its current taxable year or in any future taxable year. However, because PFIC status is based on BioNTech’s income, assets and activities for the entire taxable year, which BioNTech expects may vary substantially over time, it is not possible to determine whether BioNTech will be characterized as a PFIC for any taxable year until after the close of the taxable year. Moreover, BioNTech must determine its PFIC status annually based on tests that are factual in nature, and BioNTech’s status in future years will depend on its income, assets and activities in each of those years. There can be no assurance that BioNTech will not be considered a PFIC for any taxable year. If BioNTech were to be or become a PFIC for any taxable year during which a U.S. holder (defined below in “Certain Material U.S. Federal Income Tax Considerations”) holds ADSs, certain adverse U.S. federal income tax consequences could apply to such U.S. holder. See “Taxation—Material U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Considerations” in BioNTech’s registration statement on Form F-1 filed with the SEC on September 9, 2019.

The interpretation of the treatment of ADSs by the German tax authorities is subject to change.

The specific treatment of ADSs under German tax law is based on administrative provisions by the fiscal authorities, which are not codified law and are subject to change. Tax authorities may modify their interpretation and the current treatment of ADSs may change. According to the circular issued by the German Federal Ministry of Finance (BMF-Schreiben), dated May 21, 2019, (reference number IV C 1—S 1980-1/16/10010 :001, ADSs are not treated as capital participation (Kapitalbeteiligung) within the meaning of Section 2 Para. 8 of the Investment Tax Code (Investmentsteuergesetz). Such interpretation by the fiscal authorities may have adverse effects on the taxation of investors.

U.S. investors may have difficulty enforcing civil liabilities against BioNTech and members of its Supervisory Board and Management Board and the experts named in this proxy statement/prospectus.

BioNTech is incorporated under the laws of Germany as a European stock corporation (Societas Europaea) pursuant to the SE Regulation. The majority of BioNTech’s assets are located outside the United States and all of

 

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the members of BioNTech’s Management Board and Supervisory Board reside outside of the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce against them or BioNTech in U.S. courts’ judgments predicated upon the civil liability provisions of the federal securities laws of the United States. In addition, awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in Germany. An award for monetary damages under the U.S. securities laws would be considered punitive if it does not seek to compensate the claimant for loss or damage suffered and is intended to punish the defendant. The enforceability of any judgment in Germany will depend on the particular facts of the case as well as the laws and treaties in effect at the time. There is currently no treaty between the United States and Germany providing for reciprocal recognition and enforceability of judgments rendered in connection with civil and commercial disputes and, accordingly, a final judgment rendered by a U.S. court based on civil liability would, except where explicitly ruled enforceable by a competent German court, not be enforceable in Germany as such. However, a U.S. court’s judgment may carry evidentiary value in any proceedings for civil liability brought in the German courts. Litigation in Germany is also subject to rules of procedure that differ from the U.S. rules, including with respect to the taking and admissibility of evidence, the conduct of the proceedings and the allocation of costs. Proceedings in Germany would have to be conducted in the German language, and all documents submitted to the court would, in principle, have to be translated into German. For these reasons, it may be difficult for a U.S. investor to bring an original action in a German court predicated upon the civil liability provisions of the U.S. federal securities laws against BioNTech or any members of its Management or Supervisory Boards.

German and other non-U.S. courts may refuse to hear a U.S. securities law claim because such courts may not be the most appropriate forums in which to bring such a claim. Even if a non-U.S. court agrees to hear a claim, it may determine that the law of the jurisdiction in which the court resides, and not U.S. law, is applicable to the claim. Further, if U.S. law is found to be applicable, the content of applicable U.S. law must be proved as fact, which can be a time-consuming and costly process, and certain matters of procedure would still be governed by the law of the jurisdiction in which the foreign court resides.

The rights of shareholders in a stock corporation subject to German law differ in material respects from the rights of shareholders of corporations incorporated in the United States.

BioNTech is a European stock corporation (Societas Europaea) with its registered office in Germany. BioNTech’s corporate affairs are governed by the laws governing stock corporations and European stock corporations incorporated in Germany, the SE Regulation and BioNTech’s articles of association. The rights of shareholders may be different from the rights and obligations of shareholders in companies governed by the laws of U.S. jurisdictions. Among other differences in shareholder rights, under German law, certain important resolutions, including, for example, capital decreases, measures under the German Transformation Act (Umwandlungsgesetz), such as mergers, conversions and spin-offs and the dissolution of the German stock corporation apart from insolvency and certain other proceedings, require the vote of a 75% majority of the capital present or represented at the relevant shareholders’ meeting. Therefore, the holder or holders of a blocking minority of more than 25% or, depending on the attendance level at the shareholders’ meeting, the holder or holders of a smaller percentage of the shares in a German stock corporation may be able to block any such votes, possibly to BioNTech’s detriment or the detriment of other shareholders.

As a general rule under German law, in the case of a two-tier European stock corporation a shareholder has no direct recourse against the members of the management board and the supervisory board, in the event that it is alleged that they have breached their duty of loyalty or duty of care to the corporation. Apart from when it is able to fulfill its third party obligations, certain tortious conduct of board members or other special circumstances, only the European stock corporation itself has the right to claim damages from members of the management and supervisory boards. A European stock corporation may waive or settle these damages claims only if at least three years have passed and the shareholders approve the waiver or settlement at the shareholders’ meeting with a simple majority of the votes cast, provided that a minority holding, in the aggregate, 10% or more of the European stock corporation’s share capital does not have its opposition formally noted in the minutes.

 

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In addition, the responsibilities of members of BioNTech’s Management Board and Supervisory Board may differ from the duties of directors of U.S. corporations. For example, in the performance of their duties, BioNTech’s Management Board and Supervisory Board may take into account a broad range of considerations, including BioNTech’s interests, the interests of BioNTech’s shareholders, employees, creditors and, to a limited extent, the general public. It is possible that some of these parties will have interests that are different from, or in addition to, your interests as a holder of ADSs.

For more information, BioNTech has provided summaries of relevant German corporation law and of its articles of association under “Management” and “Description of Share Capital and Articles of Association (Satzung).”

If securities analysts publish negative evaluations of BioNTech, the price of the ADSs could decline.

The trading market for the ADSs relies, in part, on the research and reports that industry or financial analysts publish about BioNTech or its business. If one or more of the analysts covering BioNTech’s business downgrade their evaluations of BioNTech, the price of the ADSs could decline. If one or more of these analysts cease to cover the ADSs, BioNTech could lose visibility in the market for the ADSs, which in turn could cause price of the ADSs to decline.

BioNTech’s principal shareholders and management own a significant percentage of BioNTech Shares and will be able to exert significant control over matters subject to shareholder approval.

BioNTech’s executive officers, directors, five percent or greater shareholders, and their affiliates beneficially own approximately 83.40% of BioNTech Shares as of February 10, 2020. Therefore, these shareholders will have the ability to influence BioNTech through their ownership positions. For example, these shareholders, acting together, may be able to exert significant influence over matters such as elections of directors, amendments of BioNTech’s organizational documents, or approval of any merger, sale of assets or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for BioNTech Shares that you may believe are in your best interest as one of BioNTech’s shareholders.

Because BioNTech does not currently pay cash dividends on BioNTech Shares and does not anticipate doing so in the foreseeable future, capital appreciation, if any, will be the sole source of gain on investments in the ADSs.

There is no plan to declare or pay cash dividends on BioNTech Shares. The intention is to retain all future earnings, if any, to finance the growth and development of the business. Additionally, the terms of any future debt agreements may preclude dividend payments. BioNTech’s ability to pay dividends is also limited under the terms of the investment agreement BioNTech has entered into with BMGF. As a result, capital appreciation, if any, on the ADSs will be the sole source of gain for the foreseeable future.

If BioNTech were to pay dividends, holders of the ADSs may be unable to claim tax credits with respect to, or tax refunds to reduce German withholding tax applicable to, the payment of such dividends, or such dividends may effectively be taxed twice.

As a German tax resident company, if BioNTech were to pay dividends, such dividends will be subject to German withholding tax. Currently, the applicable German withholding tax rate is 26.375% of the gross dividend. This German tax can be reduced to the applicable U.S.-Germany income tax treaty, or Treaty, rate, which is generally 15%, if the applicable taxpayer is eligible for such Treaty rate and files an application containing a specific German tax certificate with the German Federal Central Tax Office (Bundeszentralamt für Steuern). If such a tax certificate cannot be delivered to the ADS holder due to applicable settlement mechanics or lack of information regarding the ADS holder, holders of the ADSs may be unable to benefit from the double tax treaty relief (including “Eligible U.S. Holders” as defined under the Treaty) and may be unable to file for a

 

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credit of such withholding tax in its jurisdiction of residence. Further, the payment made to the ADS holder equal to the net dividend may, under the tax law applicable to the ADS holder, qualify as taxable income that is in turn subject to withholding, which could mean that a dividend is effectively taxed twice. There can be no guarantee that the information delivery requirement can be satisfied in all cases, which could result in adverse tax consequences for affected ADS holders. ADS holders should note that the applicable interpretation circular (Besteuerung von American Depositary Receipts (ADR) auf inländische Aktien) issued by the German Federal Ministry of Finance (Bundesministerium der Finanzen), dated May 24, 2013 (reference number IV C 1-S2204/12/10003), as amended by the circular dated December 18, 2018 (reference number IV C 1-S2204/12/10003), or the ADR Tax Circular, is not binding on German courts, and there is no certainty as to whether a German tax court will follow the ADR Tax Circular in determining the German tax treatment of the ADSs. In addition, the ADR Tax Circular does not include details on how an ADR program should be designed. If the ADSs were determined not to fall within the scope of application of the ADR Tax Circular, or a German tax court did not follow the ADR Tax Circular, and profit distributions made with respect to the ADSs were not treated as a dividend for German tax purposes, a holder of the ADSs would not be entitled to a refund of any taxes withheld on the dividends under German tax law and profit distributions made with respect to the ADSs may be effectively taxed twice.

BioNTech could be subject to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for BioNTech because biopharmaceutical companies have experienced significant price volatility in recent years. If BioNTech faces such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm BioNTech’s business.

ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiffs in an action of that kind.

The deposit agreement governing the ADSs representing BioNTech Shares provides that, to the fullest extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against BioNTech or the depositary arising out of or relating to BioNTech Shares, the ADSs or the deposit agreement, including any claim under U.S. federal securities laws.

If BioNTech or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To BioNTech’s knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. However, BioNTech believes that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York, which govern the deposit agreement, by a federal or state court in the City of New York, which has non-exclusive jurisdiction over matters arising under the deposit agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. BioNTech believes that this is the case with respect to the deposit agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before entering into the deposit agreement.

If you or any other ADS holders bring a claim against BioNTech or the depositary in connection with matters arising under the deposit agreement or relating to the ADSs, including claims under federal securities laws, you may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against BioNTech or the depositary. If a lawsuit is brought against BioNTech or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiffs in that action.

 

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Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the deposit agreement with a jury trial.

No condition, stipulation or provision of the deposit agreement or the ADSs serves as a waiver by any ADS holder or by BioNTech or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder.

Risk Factors Related to BioNTech’s Business

Risks Related to BioNTech’s Financial Condition and Capital Requirements

BioNTech is a clinical-stage biopharmaceutical company with no pharmaceutical products approved for commercial sale. BioNTech has incurred significant losses since its inception and BioNTech anticipates that it will continue to incur significant losses for the foreseeable future, which makes it difficult to assess its future viability.

BioNTech has incurred net losses in each year since its inception in 2008, including net losses of €179.2 million and €48.3 million for the years ended December 31, 2019 and December 31, 2018, respectively. As of December 31, 2019, BioNTech had accumulated losses of €424.8 million.

BioNTech has devoted most of its financial resources to research and development, including its clinical and preclinical development activities and the development of its platforms. To date, BioNTech has financed its operations primarily through the sale of equity securities and proceeds from collaborations and, to a lesser extent, through revenue from manufacturing operations and grants from governmental and private organizations. The amount of BioNTech’s future net losses will depend, in part, on the rate of its future expenditures and its ability to obtain funding through equity or debt financings, sales of assets, collaborations or grants. BioNTech has not commenced or completed pivotal clinical trials for its programs and it will be several years, if ever, before BioNTech or its collaborators have a product candidate ready for commercialization. Even if BioNTech obtains regulatory approval to market a product candidate, its future revenues will depend upon the size of any markets in which its product candidates have received approval, and BioNTech’s ability to achieve sufficient market acceptance, reimbursement from third-party payors, and adequate market share in those markets. BioNTech may never achieve profitability.

BioNTech expects to continue to incur significant expenses and increasing operating losses for the foreseeable future. BioNTech anticipates that its expenses will increase substantially if and as BioNTech and its collaborators:

 

   

continue or expand BioNTech’s research or development of BioNTech’s programs in preclinical development;

 

   

continue or expand the scope of BioNTech’s clinical trials for its product candidates;

 

   

initiate additional preclinical, clinical, or other trials for BioNTech’s product candidates, including under its collaboration agreements;

 

   

continue to invest in BioNTech’s immunotherapy platforms to conduct research to identify novel technologies;

 

   

change or add to internal manufacturing capacity or capability;

 

   

change or add additional suppliers;

 

   

add additional infrastructure to BioNTech’squality control, quality assurance, legal, compliance and other groups to support its operations as BioNTech progresses its product candidates toward commercialization;

 

   

attract and retain skilled personnel;

 

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create additional infrastructure to support BioNTech’s operations as a public company and BioNTech’s product development and planned future commercialization efforts, including expansion of sites in Germany and new sites in the United States;

 

   

seek marketing approvals and reimbursement for BioNTech’s product candidates;

 

   

establish a sales, marketing, and distribution infrastructure to commercialize any products for which BioNTech may obtain marketing approval;

 

   

seek to identify and validate additional product candidates;

 

   

acquire or in-license other product candidates and technologies;

 

   

make milestone or other payments under any in-license agreements;

 

   

maintain, protect, defend, enforce and expand BioNTech’s intellectual property portfolio; and

 

   

experience any delays or encounter issues with any of the above.

BioNTech’s operating results may fluctuate significantly, which makes BioNTech’s future operating results difficult to predict. If BioNTech’s operating results fall below expectations, the price of the ADSs could decline.

BioNTech’s financial condition and operating results have varied in the past and will continue to fluctuate from one financial period to the next due to a variety of factors, many of which are beyond BioNTech’s control. Factors relating to BioNTech’s business that may contribute to these fluctuations include the following, as well as other factors described elsewhere in this proxy statement/prospectus:

 

   

delays or failures in advancement of existing or future product candidates into the clinic or in clinical trials;

 

   

BioNTech’s ability to develop, manufacture and commercialize its programs;

 

   

BioNTech’s ability to manage its growth;

 

   

the outcomes of research programs, clinical trials, or other product development or approval processes conducted by BioNTech and its collaborators;

 

   

the ability of BioNTech’s collaborators to develop and successfully commercialize products developed from its suite of therapeutic classes;

 

   

BioNTech’s relationships, and any associated exclusivity terms, with collaborators;

 

   

BioNTech’scontractual or other obligations to provide resources to fund its product candidates, and to provide resources to its collaborators or to the collaborations themselves;

 

   

BioNTech’s operation in a net loss position for the foreseeable future;

 

   

risks associated with the international aspects of BioNTech’s business outside Germany, including the conduct of clinical trials in multiple locations and potential commercialization in such locations;

 

   

BioNTech’s ability to consistently manufacture its product candidates;

 

   

BioNTech’s ability to accurately report its financial results in a timely manner;

 

   

BioNTech’s dependence on, and the need to attract and retain, key management and other personnel;

 

   

BioNTech’s ability to obtain, protect, maintain, defend and enforce its intellectual property rights;

 

   

BioNTech’s ability to prevent the theft or infringement, misappropriation or other violation of its intellectual property, trade secrets, know-how or technologies;

 

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potential advantages that BioNTech’s competitors and potential competitors may have in securing funding, obtaining the rights to critical intellectual property or developing competing technologies or products;

 

   

BioNTech’s ability to obtain additional capital that may be necessary to expand its business;

 

   

BioNTech’s collaborators’ ability to obtain additional capital that may be necessary to develop and commercialize products under its collaboration agreements;

 

   

business interruptions such as power outages, strikes, acts of terrorism or natural disasters; and

 

   

BioNTech’s ability to use its net operating loss carryforwards to offset future taxable income.

Due to the various factors mentioned above, and others, the results of any of BioNTech’s periods should not be relied upon as indications of BioNTech’s future operating performance.

The net losses BioNTech incurs may fluctuate significantly from one reporting period to the next, such that a period-to-period comparison of BioNTech’s results of operations may not be a good indication of BioNTech’s future performance.

In any particular period, BioNTech’s operating results could be below the expectations of securities analysts or investors, which could cause the price of the ADSs to decline. While as a general matter BioNTech intends to periodically report on the status of its product candidate pipeline, including articulating anticipated next steps in the form of development plans or potential data readouts, BioNTech may not always be able to provide forward-looking guidance on the timing of those next steps. In addition, BioNTech does not control the timing of disclosures of any milestones related to any of its programs that are managed by its collaborators. Any disclosure by a collaborator of data that are perceived as negative, whether or not such data are related to other data that BioNTech or others release, may have a material adverse impact on the price of the ADSs or overall valuation. The price of the ADSs may decline as a result of unexpected clinical trial results in one or more of BioNTech’s programs, including adverse safety events reported for any of BioNTech’s programs.

BioNTech has only generated limited revenue and may never be profitable.

BioNTech’s ability to generate revenue and achieve profitability depends on its ability, alone or with collaborators, to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, its product candidates. Although BioNTech generates limited revenue from sales of products by its external services business unit, BioNTech does not anticipate generating revenues from pharmaceutical product sales in the near term. BioNTech’s ability to generate future revenues from pharmaceutical product sales depends heavily on its success in:

 

   

completing research and preclinical and clinical development of its product candidates;

 

   

seeking and obtaining U.S. and non-U.S. marketing approvals for product candidates for which BioNTech completes clinical trials;

 

   

furthering the development of BioNTech’s own manufacturing capabilities and manufacturing relationships with third parties in order to provide adequate (in amount and quality) products and services to support clinical development and the market demand for its product candidates, if approved;

 

   

obtaining market acceptance of its product candidates as a treatment option;

 

   

launching and commercializing product candidates for which BioNTech obtains marketing approval and reimbursement, either through collaborations or, if launched independently, by establishing a sales force, marketing and distribution infrastructure;

 

   

addressing any competing technological and market developments;

 

   

implementing additional internal systems and infrastructure;

 

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negotiating favorable terms in any collaboration, licensing or other arrangements into which BioNTech may enter;

 

   

maintaining, defending, protecting, enforcing and expanding BioNTech’s portfolio of intellectual property rights, including patents, trade secrets and know-how; and

 

   

attracting, hiring and retaining qualified personnel.

If one or more of the product candidates that BioNTech develops is approved for commercial sale, BioNTech anticipates incurring significant costs associated with commercializing any approved product candidate. BioNTech’s expenses could increase beyond its expectations if it is required by the U.S. Food and Drug Administration, or the FDA, the European Medicines Agency, or the EMA, or other regulatory agencies to perform clinical and other trials or make changes to its manufacturing or quality systems in addition to those that BioNTech currently anticipates. Even if BioNTech is able to generate revenues from the sale of any approved products, it may not become profitable and may need to obtain additional funding to continue operations.

The amount of and BioNTech’s ability to use net operating losses and research and development credits to offset future taxable income may be subject to certain limitations and uncertainty.

In Germany, BioNTech has unused tax loss carryforwards for corporate taxes, though it has not recognized deferred tax assets related to such loss carryforwards for International Financial Reporting Standards, or IFRS, reporting purposes. In general, net operating loss, or NOL, carryforwards in Germany do not expire. They are, however, subject to review and possible adjustment by the German tax authorities. Furthermore, under current German tax laws, certain substantial changes in the Company’s ownership and business may further limit the amount of NOL carryforwards that can be used annually to offset future taxable income. In addition, BioNTech may in the future have U.S. federal and state NOL carryforwards due to its subsidiary in the United States.

BioNTech may not be able to utilize a material portion of its NOLs or credits in either Germany or the United States. In addition, the rules regarding the timing of revenue and expense recognition for tax purposes in connection with various transactions are complex and uncertain in many respects, and BioNTech’s recognition could be subject to challenge by taxing authorities. In the event any such challenge is sustained, BioNTech’s NOLs could be materially reduced or BioNTech could be determined to be a material cash taxpayer for one or more years. Furthermore, BioNTech’s ability to use its NOLs or credits is conditioned upon it attaining profitability and generating taxable income. As described above, BioNTech has incurred significant net losses since its inception and anticipate that it will continue to incur significant losses for the foreseeable future. BioNTech does not know whether or when it will generate the taxable income necessary to utilize its NOL or credit carryforwards.

Under German tax laws, BioNTech is obligated to withhold a percentage of royalty payments it makes to third party licensors of intellectual property rights and remit those withholdings to German tax authorities, and late withholding tax payments may subject BioNTech to penalties and fees.

Under German tax laws, BioNTech is obligated to withhold a percentage of royalty payments it makes to third parties in consideration of the grant of rights under their intellectual property, and remit those withholdings to German tax authorities. As a result of an internal review, BioNTech has discovered that in the 11-year period before April 2019 BioNTech and certain of its subsidiaries did not withhold, report and remit certain withholding taxes in connection with the in-licensing of intellectual property as required to be withheld under German tax laws, and have not made the requisite recordings in BioNTech’s and their financial books and records in relation thereto. BioNTech has notified the tax authorities of the late payments and made the respective payments in 2019. No administrative offense or criminal proceedings were opened or are expected in the future.

It is possible to seek the refund of these withholding taxes from the German Federal Central Tax office after filing exemption and refund applications. BioNTech started to process the filing of such refund and exemption

 

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applications and part of the taxes paid have already been refunded and we expect further refunds to be paid out in the future. However there is a possibility that the relevant claims against the licensors and/or the authority, may in some instances, not be enforceable as a result of a licensor no longer existing, the lapse of time or any other facts preventing the enforcement of such claims.

BioNTech will require substantial additional financing to achieve its goals, and a failure to obtain this capital on acceptable terms, or at all, could force BioNTech to delay, limit, reduce or terminate its product development programs, commercialization efforts or other operations.

As of December 31, 2019, BioNTech had €519.1 million in cash and cash equivalents. BioNTech’s operating plan may change as a result of many factors currently unknown to it, and BioNTech may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, sales of assets, marketing and distribution arrangements, other collaborations and licensing arrangements, or a combination of these approaches. In any event, BioNTech will require additional capital to obtain regulatory approval for, and to commercialize, its product candidates. Even if BioNTech believes it has sufficient funds for its current or future operating plans, BioNTech may seek additional capital if market conditions are favorable or if it has specific strategic considerations. BioNTech’s spending will vary based on new and ongoing development and corporate activities. Due to high uncertainty of the length of time and activities associated with discovery and development of its product candidates, BioNTech is unable to estimate the actual funds it will require for development, marketing and commercialization activities.

BioNTech’s future funding requirements, both near and long term, will depend on many factors, including, but not limited to:

 

   

the initiation, progress, timing, costs, and results of preclinical or nonclinical studies and clinical trials for its product candidates;

 

   

the results of research and its other platform activities;

 

   

the clinical development plans BioNTech establishes for its product candidates;

 

   

the terms of any agreements with its current or future collaborators;

 

   

the number and characteristics of product candidates that BioNTech develops or may in-license;

 

   

the outcome, timing and cost of meeting regulatory requirements established by the FDA, the EMA and other comparable regulatory authorities;

 

   

the cost of filing, prosecuting, obtaining, maintaining, protecting, defending and enforcing its patent claims and other intellectual property rights, including actions for patent and other intellectual property infringement, misappropriation and other violations brought by third parties against BioNTech regarding its product candidates or actions by BioNTech challenging the patent or intellectual property rights of others;

 

   

the effect of competing technological and market developments, including other products that may compete with one or more of its product candidates;

 

   

the cost and timing of completion and further expansion of clinical and commercial scale manufacturing activities sufficient to support all of its current and future programs; and

 

   

the cost of establishing sales, marketing, and distribution capabilities for any product candidates for which BioNTech may receive marketing approval and reimbursement in regions where it chooses to commercialize its products on its own.

To date, BioNTech has financed its operations primarily through the sale of equity securities and revenue from collaborations and BioNTech cannot be certain that additional funding will be available on favorable terms, or at all. Until BioNTech can generate sufficient product sales or royalty revenue to finance its operations, which

 

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BioNTech may never do, BioNTech expects to finance its future cash needs through a combination of public or private equity offerings, debt financings, collaborations, sales of assets, licensing arrangements, and other marketing or distribution arrangements. Any fundraising efforts may divert BioNTech’s management from their day-to-day activities, which may adversely affect its ability to develop and commercialize its product candidates. In addition, BioNTech cannot guarantee that future financing will be available in sufficient amounts, at the right time, on favorable terms, or at all, including as a result of the impact that the COVID-19 pandemic may have on the capital markets.

Negative clinical trial data or setbacks, or perceived setbacks, in BioNTech’s programs or with respect to its technology could impair BioNTech’s ability to raise additional financing on favorable terms, or at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of BioNTech’s shareholders, and the issuance of additional securities, whether equity or debt, by BioNTech, or the possibility of such issuance, may cause the market price of its shares to decline. If BioNTech raises additional funds through public or private equity offerings, the terms of these securities may include liquidation or other preferences that may adversely affect its shareholders’ rights.

Further, to the extent that BioNTech raises additional capital through the sale of ADSs, BioNTech Shares or securities convertible or exchangeable into BioNTech Shares, your ownership interest will be diluted. BioNTech has entered into three secured credit facilities with an aggregate drawing capacity of €70 million. In addition, BioNTech may enter into additional credit facilities from time to time, which may be secured, to fund certain of its operations. If BioNTech raises additional capital through debt financing, BioNTech would be subject to fixed payment obligations and may be subject to security interests in its assets and covenants limiting or restricting its ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If BioNTech raises additional capital through marketing and distribution arrangements, sales of assets or other collaborations, or licensing arrangements with third parties, BioNTech may have to relinquish certain valuable rights to its product candidates, technologies, future revenue streams or research programs. BioNTech also could be required to seek collaborators for one or more of its current or future product candidates at an earlier stage than otherwise would be desirable or relinquish its rights to product candidates or intellectual property that it otherwise would seek to develop or commercialize on its own. If BioNTech is unable to raise additional capital in sufficient amounts, at the right time, on favorable terms, or at all, BioNTech may have to significantly delay, scale back or discontinue the development or commercialization of one or more of its products or product candidates, or one or more of its other research and development initiatives. Any of the above events could significantly harm its business, prospects, financial condition and results of operations, cause the price of the ADSs to decline, and negatively impact its ability to fund operations.

BioNTech will need to develop and expand its company, and BioNTech may encounter difficulties in managing this development and expansion, which could disrupt its operations.

As of December 31, 2019, BioNTech had more than 1,300 full-time employees and, in connection with the growth and advancement of its pipeline and becoming a public company, BioNTech expects to increase the number of employees and the scope of its operations. To manage its anticipated development and expansion, BioNTech must continue to implement and improve its managerial, operational, legal, compliance and financial systems, expand its facilities, and continue to recruit and train additional qualified personnel. Also, BioNTech’s management may need to divert a disproportionate amount of its attention away from its day-to-day activities and devote a substantial amount of time to managing these development activities.

As a growing biotechnology company, BioNTech is actively pursuing drug classes, platforms and product candidates in many therapeutic areas and across a wide range of diseases. Successfully developing products for and fully understanding the regulatory and manufacturing pathways to all of these therapeutic areas and disease states requires a significant depth of talent, resources and corporate processes in order to allow simultaneous execution across multiple areas. Due to its limited resources, BioNTech may not be able to effectively manage this simultaneous execution and the expansion of its operations or recruit and train additional qualified personnel. This may result in

 

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weaknesses in its infrastructure, give rise to operational mistakes, legal or regulatory compliance failures, loss of business opportunities, loss of employees and reduced productivity among remaining employees. The physical expansion of its operations may lead to significant costs and may divert financial resources from other projects, such as the development of BioNTech’s product candidates. If BioNTech’s management is unable to effectively manage its expected development and expansion, BioNTech’s expenses may increase more than expected, its ability to generate or increase its revenue could be reduced and BioNTech may not be able to implement its business strategy. BioNTech’s future financial performance and its ability to compete effectively and commercialize its product candidates, if approved, will depend in part on its ability to effectively manage the its future development and expansion.

BioNTech faces risks related to health epidemics, such as the current coronavirus outbreak, that could adversely affect its operations.

BioNTech’s business could be adversely impacted by the effects of COVID-19 (more commonly referred to as coronavirus) or other epidemics. The recent COVID-19 outbreak may negatively impact BioNTech’s revenue or operations in the future. The COVID-19 pandemic could also affect BioNTech’s ability to enroll patients in clinical studies and complete clinical trials on the timelines it currently anticipates.

BioNTech’s suppliers, licensors or collaborators could also be disrupted by conditions related to COVID-19, or other epidemics, possibly resulting in disruption to BioNTech’s supply chain, clinical trials, partnerships or operations. If BioNTech’s suppliers, licensors, CROs or collaborators are unable or fail to fulfill their obligations to BioNTech for any reason, its business could be adversely affected. BioNTech’s customers could also be disrupted by conditions related to COVID-19 or other epidemics, possibly through deferring purchasing decisions or delaying research programs. BioNTech’s operations, including research and manufacturing, could also be disrupted due to the potential of the impact of staff absences as a result of self-isolation procedures or extended illness.

At this point in time, there is uncertainty relating to the potential effect of COVID-19 on BioNTech’s business. Infections may become more widespread and a significant health epidemic could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for BioNTech’s products and services or its ability to raise capital, which could have a material adverse effect on its business, operating results and financial condition.

BioNTech’s insurance policies are expensive and protect only against some business risks, which leaves BioNTech exposed to significant uninsured liabilities.

BioNTech does not carry insurance for all categories of risk that BioNTech may encounter and insurance coverage is becoming increasingly expensive. BioNTech does not know if it will be able to maintain existing insurance with adequate levels of coverage, and any liability insurance coverage BioNTech acquires in the future may not be sufficient to reimburse for any expenses or losses BioNTech may suffer. If BioNTech obtains marketing approval for any product candidates that it or its collaborators may develop, BioNTech intends to acquire insurance coverage to include the sale of commercial products, but BioNTech may be unable to obtain such insurance on commercially reasonable terms or in adequate amounts. BioNTech currently maintains insurance coverage for losses relating to an interruption of its development, manufacturing or commercialization efforts caused by contamination in an amount of €50,000,000 per claim up to an aggregate cap of €160,000,000 in any two-year period, and the coverage or coverage limits of BioNTech’s insurance policies may not be adequate. If BioNTech’s losses exceed its insurance coverage, BioNTech’s financial condition would be adversely affected. In the event of contamination or injury, BioNTech could be held liable for damages or be penalized with fines in an amount exceeding its resources. Clinical trials or regulatory approvals for any of BioNTech’s product candidates could be suspended, which could adversely affect BioNTech’s results of operations and business, including by preventing or limiting the development and commercialization of any product candidates that BioNTech or its collaborators may develop. Additionally, operating as a public company has made it more expensive for it to obtain director and officer liability insurance. As a result, it may be more difficult for BioNTech to attract and retain qualified individuals to serve on its Supervisory Board, its board committees or its Management Board.

 

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Risks Related to BioNTech’s Business

BioNTech’s business is dependent on the successful development, regulatory approval and commercialization of product candidates based on its technology platforms. If BioNTech and its collaborators are unable to obtain approval for and effectively commercialize its product candidates for the treatment of patients in their intended indications, BioNTech’s business would be significantly harmed.

Even if BioNTech completes the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming and uncertain, and BioNTech may not be able to obtain approvals for the commercialization of any product candidates it may develop. Any immunotherapy BioNTech may develop and the activities associated with its development and commercialization, including design, testing, manufacture, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and by comparable global health authorities. To obtain the requisite regulatory approvals to commercialize any of BioNTech’s product candidates, BioNTech and its collaborators must demonstrate through extensive preclinical studies and clinical trials that BioNTech’s products are safe and effective, including in the target populations. Successful completion of clinical trials is a prerequisite to submitting a biologics license application, or BLA, or a new drug application, or NDA, to the FDA, a Marketing Authorization Application, or MAA, to the EMA, and similar marketing applications to comparable global regulatory authorities, for each product candidate and, consequently, the ultimate approval and commercial marketing of any product candidates.

Failure to obtain marketing approval for a product candidate will prevent BioNTech from commercializing the product candidate in a given jurisdiction. BioNTech has not received approval to market any biopharmaceutical product candidates from regulatory authorities in any jurisdiction, and it is possible that none of BioNTech’s product candidates, or any product candidates BioNTech may seek to develop in the future, will ever obtain regulatory approval. BioNTech has limited experience in filing and supporting the applications necessary to gain marketing approvals and may need to rely on third-party contract research organizations, or CROs, regulatory consultants or collaborators to assist BioNTech in this process. To BioNTech’s knowledge, there is no current precedent for an mRNA-based immunotherapy such as the type BioNTech is developing being approved for sale by the FDA, European Commission or any other regulatory agency elsewhere in the world. Although BioNTech expects to submit BLAs for its mRNA-based product candidates in the United States, and in the European Union, mRNA therapies have been classified as gene therapy medicinal products, other jurisdictions may consider BioNTech’s mRNA-based product candidates to be new drugs, not biologics or gene therapy medicinal products, and require different marketing applications. Securing regulatory approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing regulatory approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority. Any product candidates BioNTech develops may not be effective, may be only moderately effective, or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude BioNTech from obtaining marketing approval or prevent or limit commercial use.

The process of obtaining marketing approvals in the United States, the European Union and elsewhere, is expensive, may take many years if additional clinical trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application may cause delays in the approval or rejection of an application. The FDA, EMA and comparable authorities in other countries have substantial discretion in the approval process and may refuse to accept any application or may decide that the data are insufficient for approval and require additional preclinical, clinical or other trials. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate. Any marketing approval BioNTech ultimately obtains may be limited or subject to restrictions or post-approval commitments that render the approved product

 

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not commercially viable. Additional delays or non-approval if an FDA panel of experts, referred to as an Advisory Committee, or other regulatory authority recommends non-approval or restrictions on approval. In addition, BioNTech may experience delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory agency policy during the period of product development, clinical trials, and the review process.

Regulatory agencies also may approve an immunotherapy for fewer or more limited indications than requested or may grant approval subject to the performance of post-marketing studies. In addition, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercialization of BioNTech’s product candidates.

The FDA, EMA and other regulatory agencies review the Quality or Chemistry, Manufacturing and Controls, or CMC, section of regulatory filings. Any aspects found unsatisfactory by regulatory agencies may result in delays in clinical trials and commercialization. In addition, the regulatory agencies typically conduct pre-approval inspections at the time of a BLA, MAA or comparable filing. Any findings by regulatory agencies and failure to comply with requirements may lead to delay in approval and failure to commercialize the potential mRNA product candidate.

If BioNTech experiences delays in obtaining, or if BioNTech fails to obtain, approval of any product candidates it may develop, the commercial prospects for those product candidates will be harmed, and BioNTech’s ability to generate revenues will be materially impaired. Additionally, even if BioNTech is successful in obtaining marketing approval for product candidates, because its preclinical studies and clinical trials have not been designed with specific commercialization considerations, the commercial prospects for those product candidates could be harmed, and BioNTech’s ability to generate revenues could be materially impaired.

No mRNA immunotherapy has been approved, and none may ever be approved. mRNA drug development has substantial clinical development and regulatory risks due to the novel and unprecedented nature of this new category of therapeutics.

As a potential new category of therapeutics, to BioNTech’s knowledge, no mRNA immunotherapies have been approved to date by the FDA, EMA or other regulatory agency. Successful discovery and development of mRNA-based (and other) immunotherapies by either BioNTech or its collaborators is highly uncertain and depends on numerous factors, many of which are beyond BioNTech’s or their control. To date, there has never been a Phase 3 trial for an mRNA-based product or a commercialized mRNA-based product. BioNTech’s product candidates that appear promising in the early phases of development may fail to advance, experience delays in the clinic or clinical holds, or fail to reach the market for many reasons, including:

 

   

discovery efforts aimed at identifying potential immunotherapies may not be successful;

 

   

nonclinical or preclinical study results may show product candidates to be less effective than desired or have harmful or problematic side effects;

 

   

clinical trial results may show the product candidates to be less effective than expected, including a failure to meet one or more endpoints or have unacceptable side effects or toxicities;

 

   

manufacturing failures or insufficient supply of GMP materials for clinical trials, or higher than expected cost could delay or set back clinical trials, or make BioNTech’s product candidates commercially unattractive;

 

   

BioNTech’s improvements in the manufacturing processes may not be sufficient to satisfy the clinical or commercial demand of BioNTech’s product candidates or regulatory requirements for clinical trials;

 

   

changes that BioNTech makes to optimize its manufacturing, testing or formulating of GMP materials could impact the safety, tolerability and efficacy of its product candidates;

 

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pricing or reimbursement issues or other factors could delay clinical trials or make any immunotherapy uneconomical or noncompetitive with other therapies;

 

   

the failure to timely advance BioNTech’s programs or receive the necessary regulatory approvals, or a delay in receiving such approvals, due to, among other reasons, slow or failure to complete enrollment in clinical trials, withdrawal by trial participants from trials, failure to achieve trial endpoints, additional time requirements for data analysis, data integrity issues, BLA, MAA or the equivalent application, discussions with the FDA or the EMA, a regulatory request for additional nonclinical or clinical data, or safety formulation or manufacturing issues may lead to BioNTech’s inability to obtain sufficient funding; and

 

   

the proprietary rights, products and technologies of BioNTech’s competitors may prevent BioNTech’s immunotherapies from being commercialized.

Currently, mRNA is considered a gene therapy product by the FDA. Unlike certain gene therapies that irreversibly alter cell DNA and may cause certain side effects, mRNA-based medicines are designed not to irreversibly change cell DNA. Side effects observed in other gene therapies, however, could negatively impact the perception of immunotherapies despite the differences in mechanism. In addition, because no mRNA-based product has been approved, the regulatory pathway in the United States and may other jurisdictions for approval is uncertain. The pathway for an individualized therapy, such as BioNTech’s iNeST mRNA-based immunotherapy where each patient receives a different combination of mRNAs, remains particularly unsettled. The number and design of the clinical and preclinical studies required for the approval of these types of medicines have not been established, may be different from those required for gene therapy products or therapies that are not individualized or may require safety testing like gene therapy products. Moreover, the length of time necessary to complete clinical trials and submit an application for marketing approval by a regulatory authority varies significantly from one pharmaceutical product to the next and may be difficult to predict.

BioNTech’s product candidates may not work as intended, may cause undesirable side effects or may have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

As with most biological products, use of BioNTech’s product candidates could be associated with side effects or adverse events which can vary in severity from minor reactions to death and in frequency from infrequent to prevalent. The potential for adverse events is especially acute in the oncology setting, where patients may have advanced disease, have compromised immune and other systems and be receiving numerous other therapies. Undesirable side effects or unacceptable toxicities caused by BioNTech’s product candidates could cause BioNTech or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA, the EMA or comparable regulatory authorities. Results of BioNTech’s trials could reveal a high and unacceptable severity and prevalence of side effects.

If unacceptable side effects arise in the development of BioNTech’s product candidates, BioNTech, the FDA, competent authorities of European Union member states, ethics committees, the institutional review boards, or IRBs, at the institutions in which BioNTech’s studies are conducted, or the Data Safety Monitoring Board, or DSMB, could suspend or terminate BioNTech’s clinical trials. The FDA or comparable regulatory authorities could also order BioNTech to cease clinical trials or deny approval of BioNTech’s product candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete any of BioNTech’s clinical trials or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. BioNTech expects to have to train medical personnel using BioNTech’s product candidates to understand the side effect profiles for BioNTech’s clinical trials and upon any commercialization of any of BioNTech’s product candidates. Inadequate training in recognizing or managing the potential side effects of BioNTech’s product candidates could result in patient injury or death. Any of these occurrences may harm BioNTech’s business, financial condition and prospects significantly.

 

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Monitoring the safety of patients receiving BioNTech’s product candidates is challenging, which could adversely affect BioNTech’s ability to obtain regulatory approval and commercialize its product candidates.

In BioNTech’s ongoing and planned clinical trials, BioNTech has contracted with and are expected to continue to contract with academic medical centers and hospitals experienced in the assessment and management of toxicities arising during clinical trials. Nonetheless, these centers and hospitals may have difficulty observing patients and treating toxicities, which may be more challenging due to personnel changes, inexperience, shift changes, house staff coverage or related issues. This could lead to more severe or prolonged toxicities or even patient deaths, which could result in BioNTech or the FDA, EMA or other comparable regulatory authority delaying, suspending or terminating one or more of BioNTech’s clinical trials, and which could jeopardize regulatory approval. BioNTech also expecst the centers using its product candidates, if approved, on a commercial basis could have similar difficulty in managing adverse events. Medicines used at centers to help manage adverse side effects of BioNTech’s product candidates may not adequately control the side effects and may have a detrimental impact on the efficacy of the treatment. Use of these medicines may increase with new physicians and centers administering BioNTech’s product candidates.

In addition, even if BioNTech successfully advances one of its product candidates into and through clinical trials, such trials will likely only include a limited number of subjects and limited duration of exposure to its product candidates. As a result, BioNTech cannot be assured that adverse effects of its product candidates will not be uncovered when a significantly larger number of patients are exposed to the product candidate. Further, any clinical trials may not be sufficient to determine the effect and safety consequences of taking BioNTech’s product candidates over a multi-year period.

If any of BioNTech’s product candidates receives marketing approval and BioNTech or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:

 

   

regulatory authorities may withdraw their approval of the product;

 

   

BioNTech may be required to recall a product or change the way such product is administered to patients;

 

   

additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof;

 

   

regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;

 

   

BioNTech may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a Medication Guide outlining the risks of such side effects for distribution to patients;

 

   

BioNTech could be sued and held liable for harm caused to patients;

 

   

the product may become less competitive; and

 

   

BioNTech’s reputation may suffer.

Any of the foregoing events could prevent BioNTech from achieving or maintaining market acceptance of the particular product candidate, if approved, and result in the loss of significant revenues to BioNTech, which would materially and adversely affect BioNTech’s results of operations and business. In addition, if one or more of BioNTech’s product candidates or immunotherapy approach generally prove to be unsafe, BioNTech’s technology platforms and pipeline could be affected, which would have a material and adverse effect on BioNTech’s business, financial condition, results of operations and prospects.

 

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Preclinical development is uncertain. BioNTech’s preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect BioNTech’s ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all and would have an adverse effect on BioNTech’s business.

Much of BioNTech’s pipeline is in preclinical development and these programs could be delayed or not advance into the clinic. Before BioNTech can initiate clinical trials for product candidates, BioNTech must complete extensive preclinical studies, including IND-enabling Good Laboratory Practice toxicology testing, that support its planned Investigational New Drug applications, or INDs, in the United States or similar applications in other jurisdictions. BioNTech must also complete extensive work on CMC activities (including collecting yield, purity and stability data) to be included in the IND filing. CMC activities for a new category of medicines such as mRNA therapies require extensive manufacturing processes and analytical development, which are uncertain and lengthy. For instance, batch failures have occurred as BioNTech scales up its manufacturing and may occur in the future. In addition, BioNTech has in the past and may in the future have difficulty identifying appropriate buffers and storage conditions to enable sufficient shelf life of batches of its preclinical or clinical product candidates. If BioNTech is required to produce new batches of its product candidates due to insufficient shelf life, it may delay the commencement or completion of preclinical or clinical trials of such product candidates. For example, BioNTech cannot be certain of the timely completion or outcome of its preclinical testing and studies and cannot predict if the FDA or other regulatory authorities will accept the results of its preclinical testing or its proposed clinical programs or if the outcome of its preclinical testing, studies and CMC activities will ultimately support the further development of BioNTech’s programs. As a result, BioNTech cannot be sure that it will be able to submit INDs or similar applications for its preclinical programs on the timelines it expects, if at all, and BioNTech cannot be sure that submission of INDs or similar applications will result in the FDA or other regulatory authorities allowing clinical trials to begin.

Clinical development involves a lengthy and expensive process with an uncertain outcome, and delays can occur for a variety of reasons outside of BioNTech’s control. Clinical trials of BioNTech’s product candidates may be delayed, and certain programs may never advance in the clinic or may be more costly to conduct than BioNTech anticipates, any of which can affect BioNTech’s ability to fund its company and would have a material adverse impact on its business.

Clinical testing is expensive and complex and can take many years to complete. Its outcome is inherently uncertain. BioNTech may not be able to initiate, may experience delays in, or may have to discontinue clinical trials for its product candidates. BioNTech and its collaborators also may experience numerous unforeseen events during, or as a result of, any clinical trials that BioNTech or its collaborators conduct that could delay or prevent BioNTech or its collaborators from successfully developing BioNTech’s product candidates, including:

 

   

the FDA, other regulators, IRBs or ethics committees may not authorize BioNTech or its investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site for any number of reasons, including concerns regarding safety and aspects of the clinical trial design;

 

   

BioNTech may experience delays in reaching, or fail to reach, agreement on favorable terms with prospective trial sites and prospective CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

 

   

BioNTech has optimized in the past and may in the future optimize its manufacturing processes, including through changes to the scale and site of manufacturing, which may lead to additional studies (including bridging and bioequivalence studies) or potentially significant changes in its clinical trial designs, requiring additional cost and time, and, as a consequence, lead to a delay in plans for progressing one or more product candidates;

 

   

the outcome of BioNTech’s preclinical studies and its early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results;

 

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BioNTech may be unable to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful;

 

   

in an effort to optimize product features, BioNTech has made in the past and may continue to make changes to its product candidates after it commences clinical trials of a medicine which may require it to repeat earlier stages of clinical testing or delay later-stage testing of the medicine;

 

   

clinical trials of any product candidates may fail to show safety or efficacy, or may produce negative or inconclusive results, and BioNTech may decide, or regulators may require BioNTech, to conduct additional nonclinical studies or clinical trials, or BioNTech may decide to abandon product development programs;

 

   

differences in trial design between early-stage clinical trials and later-stage clinical trials may make it difficult to extrapolate the results of earlier clinical trials to later clinical trials;

 

   

preclinical and clinical data are often susceptible to varying interpretations and analyses, and many product candidates believed to have performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval;

 

   

BioNTech’s product candidates may have undesirable side effects or other unexpected characteristics. One or more of such effects or events could cause regulators to impose a clinical hold on the applicable trial, or cause BioNTech or its investigators, IRBs or ethics committees to suspend or terminate the trial of that product candidate or any other of its product candidates for which a clinical trial may be ongoing;

 

   

the number of trial participants required for clinical trials of any product candidates may be larger than BioNTech anticipates, identification of trial participants for such trials may be limited, enrollment in these clinical trials may be slower than BioNTech anticipates due to perceived adverse effects, limited patient populations, competitive trials or other reasons, or participants may withdraw from clinical trials or fail to return for post-treatment follow-up at a higher rate than BioNTech anticipates;

 

   

BioNTech’s third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to BioNTech in a timely manner, or at all, or may deviate from the clinical trial protocol or withdraw from the trial, which may require that BioNTech add new clinical trial sites;

 

   

regulators may elect to impose a clinical hold, or BioNTech, BioNTech’s investigators, IRBs or ethics committees may elect to suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to an unacceptable benefit-risk ratio;

 

   

the cost of preclinical or nonclinical testing and studies and clinical trials of any product candidates may be greater than BioNTech anticipates;

 

   

the supply or quality of BioNTech’s product candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate;

 

   

safety or efficacy concerns regarding BioNTech’s product candidates may result from any concerns arising from nonclinical or clinical testing of other therapies targeting a similar disease state or other therapies, such as gene therapy, that are perceived as similar to BioNTech’s; and

 

   

the FDA or other regulatory authorities may require BioNTech to submit additional data, such as long-term toxicology studies, or impose other requirements before permitting BioNTech to initiate a clinical trial.

BioNTech could also encounter delays if a clinical trial is suspended or terminated by BioNTech, the FDA or other regulatory authorities, ethics committees, or the IRBs of the institutions in which such trials are being conducted, or if such trial is recommended for suspension or termination by the DSMB. BioNTech may in the future be delayed in gaining clearance from the FDA or other regulators to initiate clinical trials through, among

 

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other things, the imposition of a clinical hold in order to address comments from such regulators on BioNTech’s clinical trial design or other elements of BioNTech’s clinical trials. A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or BioNTech’s clinical protocols; inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold; unforeseen safety issues or adverse side effects; failure to demonstrate a benefit, or adequate benefit-risk ratio, from using a product candidate; failure to establish or achieve clinically meaningful trial endpoints; changes in governmental regulations or administrative actions; or lack of adequate funding to continue the clinical trial. Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of BioNTech’s product candidates. BioNTech could also experience delays if physicians encounter unresolved ethical issues associated with enrolling patients in clinical trials of BioNTech’s product candidates in lieu of prescribing existing treatments that have established safety and efficacy profiles. BioNTech must also complete extensive work on CMC activities that require extensive manufacturing processes and analytical development, which are uncertain and lengthy.

BioNTech expects the novel nature of its product candidates to create further challenges in obtaining regulatory approval. For example, the FDA and regulatory authorities in other jurisdictions have limited experience with commercial development of several of BioNTech’s technologies. The FDA may require an Advisory Committee to deliberate on the adequacy of the safety and efficacy data to support licensure. The opinion of the Advisory Committee, although not binding, may have a significant impact on BioNTech’s ability to obtain licensure of the product candidates based on the completed clinical trials, as the FDA often adheres to the Advisory Committee’s recommendations. Accordingly, the regulatory approval pathway for BioNTech’s product candidates may be uncertain, complex, expensive and lengthy, and approval may not be certain.

Moreover, the FDA and other regulatory authorities have indicated that prior to commencing later stage clinical trials for BioNTech’s mRNA-based product candidates BioNTech will need to scale up and further refine assays to measure and predict the potency of a given dose of these product candidates. Any delay in the scaling and refining of assays that are acceptable to the FDA or other regulatory authorities could delay the start of future clinical trials. Further, the FDA or other regulatory authorities may disagree with BioNTech’s clinical trial design and BioNTech’s interpretation of data for its clinical trials or may change the requirements for approval even after they have reviewed and commented on the design for BioNTech’s clinical trials.

Significant preclinical or nonclinical testing and studies or clinical trial delays for BioNTech’s product candidates also could allow BioNTech’s competitors to bring products to market before BioNTech does, potentially impairing BioNTech’s ability to successfully commercialize its product candidates and harming BioNTech’s business and results of operations. Any delays in the development of BioNTech’s product candidates may harm BioNTech’s business, financial condition and prospects significantly.

If BioNTech or its collaborators encounter difficulties enrolling participants in BioNTech’s clinical trials, BioNTech’s clinical development activities could be delayed or otherwise adversely affected.

BioNTech depends on enrollment of participants in BioNTech’s clinical trials for its product candidates. In the past, BioNTech’s collaborators have found, and BioNTech or its collaborators may in the future find, it difficult to enroll trial participants in BioNTech’s clinical studies, which could delay or prevent clinical studies of BioNTech’s product candidates. Identifying and qualifying trial participants to participate in clinical studies of BioNTech’s product candidates is critical to BioNTech’s success. The timing of BioNTech’s clinical studies depends on the speed at which BioNTech can recruit trial participants to participate in testing its product candidates. Delays in enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect BioNTech’s ability to advance the development of its product candidates. If trial participants are unwilling to participate in BioNTech’s studies because of negative publicity from adverse events in BioNTech’s trials or other trials of similar products, or those related to specific a therapeutic area, or for other reasons, including competitive clinical studies for similar patient populations, the timeline for recruiting trial participants,

 

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conducting studies, and obtaining regulatory approval of potential products may be delayed. These delays could result in increased costs, delays in advancing BioNTech’s product development, delays in testing the effectiveness of BioNTech’s product, or termination of the clinical studies altogether.

BioNTech may not be able to identify, recruit and enroll a sufficient number of trial participants, or those with required or desired characteristics to achieve diversity in a study, to complete BioNTech’s clinical trials in a timely manner. Patient and subject enrollment is affected by factors including:

 

   

severity of the disease under investigation;

 

   

complexity and design of the study protocol;

 

   

size of the patient population;

 

   

eligibility criteria for the study in question;

 

   

proximity and availability of clinical study sites for prospective trial participants;

 

   

availability of competing therapies and clinical trials, including between BioNTech’s own clinical trials;

 

   

efforts to facilitate timely enrollment in clinical trials;

 

   

patient referral practices of physicians;

 

   

ability to monitor trial participants adequately during and after treatment;

 

   

ability to recruit clinical trial investigators with the appropriate competencies and experience;

 

   

clinicians’ and trial participants’ perceptions of the potential advantages and side effects of the product candidate being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications BioNTech is investigating;

 

   

BioNTech’s ability to obtain and maintain participant informed consent; and

 

   

the risk that trial participants enrolled in clinical trials will not complete a clinical trial.

In addition, BioNTech’s clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as BioNTech’s product candidates, and this competition will reduce the number and types of trial participants available to BioNTech because some trial participants who might have opted to enroll in BioNTech’s trials may instead opt to enroll in a trial being conducted by a third party. Since the number of qualified clinical investigators is limited, BioNTech expects to conduct some of its clinical trials at the same clinical trial sites that some of BioNTech’s competitors use, which will reduce the number of trial participants who are available for BioNTech’s clinical trials at such clinical trial sites. Moreover, because in some cases BioNTech’s product candidates represent a departure from more traditional methods for disease treatment and prevention, potential trial participants and their doctors may be inclined to use conventional therapies or other new therapies rather than enroll trial participants in any future clinical trial involving individualized product candidates. Additionally, if new product candidates, such as gene editing therapies, show encouraging results, potential trial participants and their doctors may be inclined to enroll trial participants in clinical trials using those product candidates. If such new product candidates show discouraging results or other adverse safety indications, potential trial participants and their doctors may be less inclined to enroll trial participants in BioNTech’s clinical trials.

In particular, certain conditions for which BioNTech plans to evaluate its current product candidates are rare diseases with limited patient pools from which to draw for clinical trials. The eligibility criteria of BioNTech’s clinical trials will further limit the pool of available trial participants. Additionally, the process of finding and diagnosing patients may prove costly. Each of the risks set forth above may be exacerbated by the COVID-19 pandemic currently affecting the global community and the global economy.

 

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A variety of risks associated with conducting research and clinical trials abroad and marketing BioNTech’s product candidates internationally could materially adversely affect BioNTech’s business.

Clinical trials of BioNTech’s product candidates are currently being conducted in numerous countries, including Germany, Austria, Belgium, Czechia, France, Italy, the Netherlands, Poland, Spain, Sweden, the United Kingdom, Israel, Australia, Canada and the United States, and BioNTech plans to commercialize its product candidates, if approved, globally. Accordingly, BioNTech is subject to additional risks related to operating in multiple countries, including:

 

   

differing regulatory requirements in such countries;

 

   

unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;

 

   

increased difficulties in managing the logistics and transportation of storing and shipping product candidates produced in Germany and shipping the product candidate to the patient abroad;

 

   

import and export requirements and restrictions;

 

   

economic weakness, including inflation, or political instability in particular economies and markets;

 

   

compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

 

   

taxes, including withholding of payroll taxes;

 

   

currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

 

   

difficulties staffing and managing operations outside of Germany;

 

   

workforce uncertainty in countries where labor unrest is more common;

 

   

differing payor reimbursement regimes, governmental payors or patient self-pay systems, and price controls;

 

   

potential liability under the U.S. Foreign Corrupt Practices Act of 1977 or comparable regulations in other jurisdictions;

 

   

challenges enforcing BioNTech’s contractual and intellectual property rights, especially in those countries that do not respect and protect intellectual property rights to the same extent as do Germany and the United States;

 

   

production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

 

   

business interruptions resulting from geopolitical actions, including war and terrorism and public health epidemics.

The extent to which the COVID-19 pandemic impacts BioNTech’s operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others. In particular, the spread of the coronavirus globally could adversely impact BioNTech’s clinical trial operations, including the availability of specialist raw materials required to manufacture BioNTech’s clinical candidates and BioNTech’s ability to deliver clinical candidates to clinical trial sites. In the future, similar events could affect BioNTech’s ability to manufacture and commercialize its product candidates.

These and other risks associated with BioNTech’s international operations and BioNTech’s collaborations with its collaborators may materially adversely affect BioNTech’s ability to attain or maintain profitable operations.

 

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Interim top-line and preliminary data from studies or trials that BioNTech announces or publishes from time to time may change as more data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, BioNTech may publish interim top-line or preliminary data from preclinical studies or clinical trials. Interim data are subject to the risk that one or more of the outcomes may materially change as more data become available. BioNTech also makes assumptions, estimations, calculations and conclusions as part of its analyses of data, and BioNTech may not have received or had the opportunity to fully evaluate all data. As a result, the top-line results that BioNTech reports may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Preliminary or top-line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data BioNTech previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Additionally, interim data from clinical trials that BioNTech may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data becomes available. Adverse differences between preliminary or interim data and final data could significantly harm BioNTech’s business prospects.

Further, others, including regulatory agencies, may not accept or agree with BioNTech’s assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and BioNTech in general. In addition, the information BioNTech chooses to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what BioNTech determines is the material or otherwise appropriate information to include in BioNTech’s disclosure. Any information BioNTech determines not to disclose may ultimately be deemed significant by you or others with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or BioNTech’s business. If the top-line data that BioNTech reports differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, BioNTech’s ability to obtain approval for, and commercialize, product candidates may be harmed, which could significantly harm BioNTech’s business prospects.

Results of earlier studies and trials of BioNTech’s product candidates may not be predictive of future trial results.

Success in preclinical studies and early clinical trials does not ensure that later clinical trials will be successful. A number of companies in the biotechnology and pharmaceutical industries have suffered significant setbacks in clinical trials, even after positive results in earlier preclinical studies or clinical trials. These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway and safety or efficacy observations made in clinical trials, including previously unreported adverse events. Notwithstanding any potential promising results in earlier studies and trials, BioNTech cannot be certain that it will not face similar setbacks. Even if BioNTech’s clinical trials are completed, the results may not be sufficient to obtain regulatory approval for BioNTech’s product candidates. In addition, the results of BioNTech’s preclinical studies may not be predictive of the results of outcomes in human clinical trials. For example, BioNTech’s tumor-specific cancer immunotherapy candidates and any future product candidates may demonstrate different chemical, biological and pharmacological properties in patients than they do in laboratory studies or may interact with human biological systems in unforeseen or harmful ways. Product candidates in later stages of clinical trials may fail to show the desired pharmacological properties or safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. Even if BioNTech is able to initiate and complete clinical trials, the results may not be sufficient to obtain regulatory approval for BioNTech’s product candidates.

 

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BioNTech’s planned clinical trials or those of BioNTech’s collaborators may reveal significant adverse events not seen in BioNTech’s preclinical or nonclinical studies and may result in a safety profile that could delay or terminate clinical trials, or delay or prevent regulatory approval or market acceptance of any of BioNTech’s product candidates.

There is typically an extremely high rate of attrition for product candidates across categories of medicines proceeding through clinical trials. These product candidates may fail to show the desired safety and efficacy profile in later stages of clinical trials despite having progressed through nonclinical studies and initial clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in later-stage clinical trials due to lack of efficacy or unacceptable safety profiles, notwithstanding promising results in earlier trials. Most product candidates that commence clinical trials are never approved as products and there can be no assurance that any of BioNTech’s current or future clinical trials will ultimately be successful or support further clinical development of any of BioNTech’s product candidates.

Some of BioNTech’s product candidates are being developed or are intended to be co-administered with other developmental therapies or approved medicines. For example, RO198457 (BNT122) is being developed to be co-administered with checkpoint inhibitors. Such combinations may have additional side effects which may be difficult to predict in future clinical trials.

If significant adverse events or other side effects are observed in any of BioNTech’s current or future clinical trials, BioNTech may have difficulty recruiting trial participants to any of BioNTech’s clinical trials, trial participants may withdraw from trials, or BioNTech may be required to abandon the trials or BioNTech’s development efforts of one or more product candidates altogether. BioNTech, the FDA or other applicable regulatory authorities, ethics committees or an IRB may impose a clinical hold on, or suspend or terminate, clinical trials of a product candidate at any time for various reasons, including a belief that participants in such trials are being exposed to unacceptable health risks or adverse side effects. Some potential therapeutics developed in the biotechnology industry that initially showed therapeutic promise in early-stage trials have later been found to cause side effects that prevented their further development. Even if the side effects do not preclude the drug from obtaining or maintaining marketing approval, an unfavorable benefit-risk ratio may inhibit market acceptance of the approved product due to its tolerability versus other therapies. Any of these developments could materially harm BioNTech’s business, financial condition and prospects.

BioNTech may not be able to develop or obtain approval for companion diagnostics required for commercialization of some of its product candidates.

Administration of some of BioNTech’s product candidates may require the use of immuno-assays and bioinformatic tools in which patients are screened for optimal target antigens of BioNTech’s product candidates. If safe and effective use of a biologic product depends on an in vitro diagnostic, then the FDA generally requires approval or clearance of the diagnostic, known as a companion diagnostic, concurrently with approval of the therapeutic product. To date, the FDA has generally required in vitro companion diagnostics intended to select the patients who will respond to cancer treatment to obtain a pre-market approval, or PMA, for that diagnostic, which can take up to several years, simultaneously with approval of the biologic product. Similarly, in the European Union, an in vitro companion diagnostic may be placed on the market only if it conforms to certain “essential requirements” and bears the Conformité Européenne Mark, or CE Mark, and the conformity assessment process to obtain the CE Mark can be lengthy.

For BioNTech’s individualized immunotherapy candidates, the FDA and similar regulatory authorities outside of the United States may require the development and regulatory approval of a companion diagnostic assay as a condition to approval. The FDA may require PMA supplemental approvals for use of that same companion diagnostic as a condition of approval of additional individualized therapeutic candidates. BioNTech does not have experience or capabilities in developing or commercializing companion diagnostics and plans to rely in large part on third parties to perform these functions. Companion diagnostic assays are subject to

 

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regulation by the FDA and other comparable regulatory authorities in other jurisdictions as medical devices and require separate regulatory approval prior to the use of such diagnostic assays with BioNTech’s individualized therapeutic candidates. If BioNTech, or any third parties that BioNTech engages to assist it, are unable to successfully develop companion diagnostic assays for use with BioNTech’s individualized therapeutic candidates, or are unable to obtain regulatory approval or experience delays in either development or obtaining regulatory approval, BioNTech may be unable to identify patients with the specific profile targeted by BioNTech’s product candidates for enrollment in BioNTech’s clinical trials. Accordingly, further investment may be required to further develop or obtain the required regulatory approval for the relevant companion diagnostic assay, which would delay or substantially impact BioNTech’s ability to conduct additional clinical trials or obtain regulatory approval.

Because BioNTech is developing some of its product candidates for the treatment of diseases in which there is little clinical experience and, in some cases, using new endpoints or methodologies, the FDA, EMA or other regulatory authorities may not consider the endpoints of BioNTech’s clinical trials to provide clinically meaningful results.

There may not be pharmacologic therapies approved to treat the underlying causes of many diseases that BioNTech may address in the future. For instance, BioNTech and its collaborators are applying BioNTech’s technology to develop therapeutics in indications such as certain rare diseases, including some for which no or few clinical trials have been attempted. As a result, any future design and conduct of clinical trials of product candidates for the treatment of certain rare diseases may take longer, be more costly, or be less effective as part of the novelty of development in these diseases. Even if BioNTech decides to conduct clinical trials and the FDA does find BioNTech’s success criteria to be sufficiently validated and clinically meaningful, BioNTech may not achieve the pre-specified endpoint to a degree of statistical significance in any pivotal or other clinical trials BioNTech or its collaborators may conduct for BioNTech’s programs. Further, even if BioNTech does achieve the pre-specified criteria, BioNTech’s trials may produce results that are unpredictable or inconsistent with the results of the more traditional efficacy endpoints in the trial. The FDA also could give overriding weight to other efficacy endpoints over a primary endpoint, even if BioNTech achieves statistically significant results on that endpoint, if BioNTech does not do so on its secondary efficacy endpoints. The FDA also weighs the benefits of a product against its risks and the FDA may view the efficacy results in the context of safety as not being supportive of licensure. Other regulatory authorities in Europe and other countries may make similar findings with respect to these endpoints.

The FDA, EMA or other comparable regulatory authorities may disagree with BioNTech’s regulatory plan and BioNTech may fail to obtain regulatory approval of its product candidates.

If the results of BioNTech’s clinical trials are sufficiently compelling, BioNTech or its collaborators intend to discuss with the FDA submission of a BLA for BioNTech’s product candidates. However, BioNTech does not have any agreement or guidance from the FDA that BioNTech’s regulatory development plans will be sufficient for submission of a BLA for any of BioNTech’s product candidates. The FDA, EMA or other regulatory agencies may grant accelerated approval for BioNTech’s product candidates and, as a condition for accelerated approval, the FDA, EMA or other regulatory agencies may require a sponsor of a drug or biologic receiving accelerated approval to perform post-marketing studies to verify and describe the predicted effect on irreversible morbidity or mortality or other clinical endpoint, and the drug or biologic may be subject to withdrawal procedures by the FDA, EMA or other regulatory agencies that are more accelerated than those available for regular approvals. In addition, the standard of care may change with the approval of new products in the same indications that BioNTech is studying. This may result in the FDA, EMA or other regulatory agencies requesting additional studies to show that BioNTech’s product candidate is superior to the new products.

 

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BioNTech’s clinical trial results may also not support approval. In addition, BioNTech’s product candidates could fail to receive regulatory approval for many reasons, including the following:

 

   

the FDA, the EMA or comparable regulatory authorities may disagree with the design or implementation of BioNTech’s clinical trials;

 

   

BioNTech may be unable to demonstrate to the satisfaction of the FDA, the EMA or comparable regulatory authorities that BioNTech’s product candidates are safe and effective for any of their proposed indications;

 

   

the results of clinical trials may not meet the level of statistical significance required by the FDA, the EMA or comparable regulatory authorities for approval, including due to the heterogeneity of patient populations;

 

   

BioNTech may be unable to demonstrate that its product candidates’ clinical and other benefits outweigh their safety risks;

 

   

the FDA, the EMA or comparable regulatory authorities may disagree with BioNTech’s interpretation of data from preclinical studies or clinical trials;

 

   

the data collected from clinical trials of BioNTech’s product candidates may not be sufficient to the satisfaction of the FDA, the EMA or comparable regulatory authorities to support the submission of a BLA or other comparable submissions or to obtain regulatory approval in the United States or elsewhere;

 

   

the FDA, the EMA or comparable regulatory authorities will inspect BioNTech’s manufacturing facilities and may not approve BioNTech’s facilities; and

 

   

the approval policies or regulations of the FDA, the EMA or comparable regulatory authorities may significantly change in a manner rendering BioNTech’s clinical data insufficient for approval.

BioNTech may not be able to file INDs with the FDA, clinical trial applications with the competent authorities of European Union member states or similar applications with other comparable regulatory authorities to commence additional clinical trials on the timelines BioNTech expects, and even if BioNTech is able to, one or more of these regulatory authorities may not permit BioNTech to proceed.

The timing of filing on BioNTech’s product candidates is dependent on further preclinical, clinical and manufacturing success. BioNTech cannot be sure that submission of an IND or IND amendment with the FDA, a clinical trial application with the competent authorities of European Union member states or similar application with other comparable regulatory authorities will result in the FDA, the competent authorities of European Union member states or any comparable regulatory authority allowing testing and clinical trials to begin, or that, once begun, issues will not arise that result in the suspension or termination of such clinical trials. Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND, clinical trial application or similar applications, BioNTech cannot guarantee that such regulatory authorities will not change their requirements in the future.

BioNTech may seek orphan drug designation for some or all of its product candidates across various indications, but BioNTech may be unable to obtain such designations or to maintain the benefits associated with orphan drug designation, including market exclusivity, which may cause BioNTech’s revenue, if any, to be reduced.

BioNTech’s strategy includes filing for orphan drug designation where available for BioNTech’s product candidates. Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug or biologic intended to treat a rare disease or condition, which is defined as one occurring in a patient population of fewer than 200,000 in the United States, or a patient population of 200,000 or greater in the United States where there is no reasonable expectation that the cost of developing the drug or biologic will be recovered from sales in the

 

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United States. In the United States, orphan drug designation entitles a party to financial incentives, such as opportunities for grant funding toward clinical trial costs, tax advantages, and user-fee waivers. In addition, if a product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including a full new drug application or a BLA, to market the same drug or biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the original manufacturer is unable to assure sufficient product quantity. Similar rules apply in the European Union with respect to drugs or biologics designated as orphan medicinal products.

In addition, exclusive marketing rights in the United States may be limited if BioNTech seeks approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective. Further, even if BioNTech obtains orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active moieties may receive and be approved for the same condition, and only the first applicant to receive approval will receive the benefits of marketing exclusivity. Even after an orphan-designated product is approved, the FDA can subsequently approve a later drug with the same active moiety for the same condition if the FDA concludes that the later drug is clinically superior if it is shown to be safer, more effective, or makes a major contribution to patient care. Similar considerations apply in the European Union with respect to drugs or biologics designated as orphan medicinal products. Orphan drug designation neither shortens the development time or regulatory review time of a drug, nor gives the drug any advantage in the regulatory review or approval process. In addition, while BioNTech may seek orphan drug designation for its product candidates, BioNTech may never receive such designations.

BioNTech may seek breakthrough therapy or fast-track designation for one or more of its product candidates, but BioNTech may not receive such designations. Even if BioNTech does, it may not lead to a faster development or regulatory review or approval process, and it may not increase the likelihood that such product candidates will receive marketing approval.

BioNTech may seek a breakthrough therapy designation in the United States for one or more of its product candidates. A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drugs that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Drugs designated as breakthrough therapies by the FDA are also eligible for priority review if supported by clinical data at the time of the submission of the BLA.

Designation as a breakthrough therapy is at the discretion of the FDA. Accordingly, even if BioNTech believes that one of its product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a breakthrough therapy designation for a drug may not result in a faster development process, review or approval compared to drugs considered for approval under conventional FDA procedures and it would not assure ultimate approval by the FDA. In addition, even if one or more of BioNTech’s product candidates qualify as breakthrough therapies, the FDA may later decide that the product candidate no longer meets the conditions for qualification or it may decide that the time period for FDA review or approval will not be shortened.

BioNTech may also seek Fast Track Designation in the United States for some of its product candidates. If a therapy is intended for the treatment of a serious or life-threatening condition and the therapy demonstrates the potential to address significant unmet medical needs for this condition, the drug sponsor may apply for Fast Track Designation. The FDA has broad discretion whether or not to grant this designation, and even if BioNTech

 

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believes a particular product candidate is eligible for this designation, BioNTech cannot assure you that the FDA would decide to grant it. Even if BioNTech does receive Fast Track Designation, BioNTech may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw Fast Track Designation if it believes that the designation is no longer supported by data from BioNTech’s clinical development program. Fast Track Designation alone does not guarantee qualification for the FDA’s priority review procedures.

BioNTech expects some of the product candidates it develops will be regulated as biologics in the United States and therefore they may be subject to competition from biosimilars approved through an abbreviated regulatory pathway.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or the ACA, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009, or the BPCIA, which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-approved reference biological product. Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first approved by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first approved. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of the other company’s product. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation and meaning are subject to uncertainty.

BioNTech believes that any of its product candidates approved as a biological product under a BLA should qualify for a 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider BioNTech’s product candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of BioNTech’s reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

Some of BioNTech’s product candidates are classified as gene therapies by the FDA and the EMA, and the FDA has indicated that BioNTech’s product candidates will be reviewed within its Center for Biologics Evaluation and Research, or CBER. Even though BioNTech’s mRNA product candidates are designed to have a different mechanism of action from gene therapies, the association of BioNTech’s product candidates with gene therapies could result in increased regulatory burdens, impair the reputation of BioNTech’s product candidates, or negatively impact BioNTech’s platform or BioNTech’s business.

There have been few approvals of gene therapy products in the United States and other jurisdictions, and there have been well-reported significant adverse events associated with their testing and use. Gene therapy products have the effect of introducing new DNA and potentially irreversibly changing the DNA in a cell. In contrast, mRNA is highly unlikely to localize to the nucleus, integrate into cell DNA, or otherwise make any permanent changes to cell DNA. Consequently, BioNTech expects that its product candidates will have a different potential side effect profile from gene therapies because they lack risks associated with altering cell DNA irreversibly. Further, BioNTech may avail themselves of ways of mitigating side effects in developing BioNTech’s product candidates to address safety concerns that are not available to all gene therapies, such as lowering the dose of BioNTech’s product candidates during repeat dosing or stopping treatment to potentially ameliorate undesirable side effects.

 

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Regulatory requirements governing gene and cell therapy products have evolved and may continue to change in the future, and the implications for mRNA-based therapies is unknown. For example, the FDA has established the Office of Tissues and Advanced Therapies within CBER to consolidate the review of gene therapy and related products, and convenes the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its review. In the European Union, mRNA has been characterized as a Gene Therapy Medicinal Product. In certain countries, mRNA therapies have not yet been classified or any such classification is not known to BioNTech. Specifically, in Japan, the Pharmaceuticals and Medical Devices Agency has not taken a position on the regulatory classification. Notwithstanding the differences between BioNTech’s mRNA product candidates and gene therapies, the classification of some of BioNTech’s mRNA product candidates as gene therapies in the United States, the European Union and potentially other counties could adversely impact BioNTech’s ability to develop its product candidates, and could negatively impact BioNTech’s platform and BioNTech’s business. For instance, a clinical hold on gene therapy products across the field due to risks associated with altering cell DNA irreversibly may apply to BioNTech’s mRNA product candidates irrespective of the mechanistic differences between gene therapies and mRNA.

Adverse events reported with respect to gene therapies or genome editing therapies could adversely impact one or more of BioNTech’s programs. Although BioNTech’s mRNA product candidates are designed not to make any permanent changes to cell DNA, regulatory agencies or others could believe that adverse effects of gene therapy products caused by introducing new DNA and irreversibly changing the DNA in a cell could also be a risk for BioNTech’s mRNA investigational therapies, and as a result may delay one or more of BioNTech’s trials or impose additional testing for long- term side effects. Any new requirements and guidelines promulgated by regulatory review agencies may have a negative effect on BioNTech’s business by lengthening the regulatory review process, requiring BioNTech to perform additional or larger studies, or increasing BioNTech’s development costs, any of which could lead to changes in regulatory positions and interpretations, delay or prevent advancement or approval and commercialization of BioNTech’s product candidates or lead to significant post-approval studies, limitations or restrictions. As BioNTech advances its product candidates, BioNTech will be required to consult with these regulatory agencies and advisory committees and comply with applicable requirements and guidelines. If BioNTech fails to do so, BioNTech may be required to delay or discontinue development of some or all of its product candidates.

The regulatory landscape that will govern BioNTech’s product candidates is uncertain. Regulations relating to more established gene therapy and cell therapy products are still developing, and changes in regulatory requirements could result in delays or discontinuation of development of BioNTech’s product candidates or unexpected costs in obtaining regulatory approval.

The regulatory requirements to which BioNTech’s product candidates will be subject are not entirely clear. Even with respect to more established products that fit into the categories of gene therapies or cell therapies, the regulatory landscape is still developing. For example, regulatory requirements governing gene therapy products and cell therapy products have changed frequently and may continue to change in the future. Moreover, there is substantial, and sometimes uncoordinated, overlap in those responsible for regulation of existing gene therapy products and cell therapy products. Although the FDA decides whether individual gene therapy protocols may proceed, the review process and determinations of other reviewing bodies can impede or delay the initiation of a clinical study, even if the FDA has reviewed the study and approved its initiation. Conversely, the FDA can place an IND application on clinical hold even if such other entities have provided a favorable review. Furthermore, gene therapy clinical trials are also subject to review and oversight by an institutional biosafety committee, or IBC, a local institutional committee that reviews and oversees basic and clinical research conducted at the institution participating in the clinical trial. In addition, adverse developments in clinical trials of gene therapy products conducted by others may cause the FDA or other regulatory bodies to change the requirements for approval of any of BioNTech’s product candidates.

Complex regulatory environments exist in other jurisdictions in which BioNTech might consider seeking regulatory approvals for BioNTech’s product candidates, further complicating the regulatory landscape. For

 

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example, in the European Union a special committee called the Committee for Advanced Therapies, or CAT, was established within the EMA in accordance with Regulation (EC) No 1394/2007 on advanced-therapy medicinal products, or ATMPs, to assess the quality, safety and efficacy of ATMPs, and to follow scientific developments in the field. ATMPs include gene therapy products as well as somatic cell therapy products and tissue engineered products.

These various regulatory review committees and advisory groups and new or revised guidelines that they promulgate from time to time may lengthen the regulatory review process, require BioNTech to perform additional studies, increase BioNTech’s development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of BioNTech’s product candidates or lead to significant post-approval limitations or restrictions. As the regulatory landscape for BioNTech’s CAR-T cell immunotherapy product candidates is new, BioNTech may face even more cumbersome and complex regulations than those emerging for gene therapy products and cell therapy products. Furthermore, even if BioNTech’s product candidates obtain required regulatory approvals, such approvals may later be withdrawn as a result of changes in regulations or the interpretation of regulations by applicable regulatory agencies.

Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease BioNTech’s ability to generate sufficient product sales revenue to maintain BioNTech’s business.

BioNTech may be unable to obtain regulatory approval for its product candidates under applicable international regulatory requirements. The denial or delay of such approval would delay commercialization of BioNTech’s product candidates and adversely impact BioNTech’s potential to generate revenue, BioNTech’s business and BioNTech’s results of operations.

Approval by the FDA in the United States, if obtained, does not ensure approval by regulatory authorities in other countries or jurisdictions. In order to eventually market any of BioNTech’s product candidates in any other jurisdiction, BioNTech must establish and comply with numerous and varying regulatory requirements on a jurisdiction-by-jurisdiction basis regarding safety and efficacy. In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country. Approval processes vary among countries and can involve additional product testing and validation and additional administrative review periods.

Seeking regulatory approval in other jurisdictions could result in difficulties and costs for BioNTech and require additional preclinical studies or clinical trials which could be costly and time-consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of BioNTech’s products in those countries. The European Union and other jurisdictions’ regulatory approval processes involve all of the risks associated with FDA approval. BioNTech does not have any product candidates approved for sale in any jurisdiction, including international markets, and BioNTech does not have experience in obtaining regulatory approval in international markets. If BioNTech fails to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, BioNTech’s target market will be reduced and BioNTech’s ability to realize the full market potential of its products will be unrealized.

A third-party investigational drug used in combination with BioNTech’s product candidates may be unable to obtain regulatory approval, which may delay commercialization of BioNTech’s product candidates.

BioNTech is developing several of its product candidates to be used in combination with BioNTech’s and third-party drugs. Even if any product candidate BioNTech develops were to receive marketing approval or be commercialized for use in combination with other existing therapies, BioNTech would continue to be subject to the risks that the FDA, the EMA or similar regulatory authorities in other jurisdictions could revoke approval of the therapy used in combination with BioNTech’s product or that safety, efficacy, manufacturing or supply issues

 

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could arise with any of those existing therapies. If the therapies BioNTech uses in combination with its product candidates are replaced as the standard of care for the indications BioNTech chooses for any of its product candidates, the FDA, the EMA or similar regulatory authorities in other jurisdictions may require BioNTech to conduct additional clinical trials. The occurrence of any of these risks could result in BioNTech’s own products, if approved, being removed from the market or being less successful commercially. BioNTech also plans to evaluate current and future product candidates in combination with one or more therapies that have not yet been approved for marketing by the FDA, the EMA or similar regulatory authorities in other jurisdictions. BioNTech will not be able to market any product candidate it develops in combination with an unapproved therapy if that unapproved therapy does not ultimately obtain marketing approval. In addition, unapproved therapies face the same risks described with respect to BioNTech’s product candidates currently in development and clinical trials, including the potential for serious adverse effects, delay in their clinical trials and lack of FDA, EMA or similar regulatory authority approval.

If the FDA, the EMA or similar regulatory authorities in other jurisdictions do not approve these other drugs or revoke their approval of, or if safety, efficacy, manufacturing or supply issues arise with, the drugs BioNTech chooses to evaluate in combination with any product candidate BioNTech develops, BioNTech may be unable to obtain approval of or market any product candidate BioNTech develops.

Even if BioNTech receives regulatory approval of its product candidates, BioNTech will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense. BioNTech may be subject to penalties if BioNTech fails to comply with regulatory requirements or experiences unanticipated problems with BioNTech’s product candidates.

Even if BioNTech obtains regulatory approval in a jurisdiction, the applicable regulatory authority may still impose significant restrictions on the indicated uses or marketing of BioNTech’s product, or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance. For example, the holder of an approved BLA is obligated to monitor and report adverse events and any failure of a product to meet the specifications in the BLA. The holder of an approved BLA must also submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process. Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws.

If BioNTech fails to comply with applicable regulatory requirements following approval of any of BioNTech’s product candidates, a regulatory agency may:

 

   

issue a warning letter asserting that BioNTech is in violation of the law;

 

   

seek an injunction or impose civil or criminal penalties or monetary fines;

 

   

suspend or withdraw regulatory approval or revoke a license;

 

   

suspend any ongoing clinical studies;

 

   

refuse to approve a pending BLA or supplements to a BLA submitted by BioNTech;

 

   

seize product; or

 

   

refuse to allow BioNTech to enter into supply contracts, including government contracts.

Any government investigation of alleged violations of law could require BioNTech to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit BioNTech’s ability to commercialize any approved products and generate revenues.

If any of BioNTech’s product candidates cause undesirable side effects, it could delay or prevent their regulatory approval, limit the commercial potential, or result in significant negative consequences following any

 

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potential marketing approval. Product candidates BioNTech may develop may be associated with an adverse immune response or other serious adverse events, undesirable side effects or unexpected characteristics. In addition to serious adverse events or side effects caused by any of BioNTech’s product candidates, the administration process or related procedures also can cause undesirable side effects. If any such events occur, the clinical trials of any of BioNTech’s product candidates could be suspended or terminated.

If in the future BioNTech is unable to demonstrate that such adverse events were caused by factors other than BioNTech’s product candidate, the FDA, the EMA or other regulatory authorities could order BioNTech to cease further development of, or deny approval of, any of BioNTech’s product candidates for any or all targeted indications. Even if BioNTech is able to demonstrate that all future serious adverse events are not product-related, such occurrences could affect patient recruitment or the ability of enrolled trial participants to complete the trial. Moreover, if BioNTech elects, or is required, to delay, suspend or terminate any clinical trial of any of BioNTech’s product candidates, the commercial prospects of such product candidates may be harmed and BioNTech’s ability to generate product sale revenues from any of these product candidates may be delayed or eliminated. Any of these occurrences may harm BioNTech’s ability to identify and develop product candidates, and may harm BioNTech’s business, financial condition, result of operations and prospects significantly.

Additionally, if BioNTech successfully obtains regulatory approval for a product candidate, the FDA or other regulatory authority could require BioNTech to adopt a REMS or a risk management plan, or RMP, to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to health care practitioners, extensive patient monitoring, or distribution systems and processes that are highly controlled, restrictive, and more costly than what is typical for the industry.

Furthermore, if BioNTech or others later identify undesirable side effects caused by any product that BioNTech develops, several potentially significant negative consequences could result, including:

 

   

regulatory authorities may suspend or withdraw approvals or revoke licenses of such product;

 

   

regulatory authorities may require additional warnings on the label;

 

   

BioNTech may be required to change the way a product is administered or conduct additional clinical trials;

 

   

BioNTech could be sued and held liable for harm caused to patients and their children; and

 

   

BioNTech’s reputation may suffer.

Any of these events could prevent BioNTech from achieving or maintaining market acceptance of any products BioNTech may identify and develop and could have a material adverse impact on BioNTech’s business, financial condition, results of operations and prospects.

If BioNTech is successful in gaining approval for any of its product candidates BioNTech will continue to face significant regulatory oversight of the manufacturing and distribution of BioNTech’s products. Product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with GMP and adherence to commitments made in the BLA. If BioNTech or a regulatory agency discovers previously unknown problems with a product such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions relative to that product or the manufacturing facility, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

 

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If BioNTech is not successful in discovering, developing and commercializing additional product candidates beyond BioNTech’s current portfolio, BioNTech’s ability to expand its business and achieve its strategic objectives would be impaired.

Although a substantial amount of BioNTech’s efforts will focus on the clinical trials and potential approval of BioNTech’s existing product candidates, a key element of BioNTech’s strategy is to discover, develop and potentially commercialize additional products beyond BioNTech’s current portfolio to treat various conditions and in a variety of therapeutic areas. BioNTech intends to do so by investing in its own drug and target discovery efforts, exploring potential collaborations for the development of new products, and in-licensing technologies. Identifying new product candidates requires substantial technical, financial and human resources, whether or not any product candidates are ultimately identified. Even if BioNTech identifies product candidates that initially show promise, BioNTech may fail to successfully develop and commercialize such products for many reasons, including the following:

 

   

the research methodology used may not be successful in identifying potential product candidates;

 

   

competitors may develop alternatives that render BioNTech’s product candidates obsolete;

 

   

product candidates BioNTech develops may nevertheless be covered by third parties’ patents or other exclusive rights;

 

   

a product candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

 

   

a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and

 

   

an approved product may not be accepted as safe and effective by trial participants, the medical community or third-party payors.

If BioNTech is unsuccessful in identifying and developing additional products, BioNTech’s potential for growth may be impaired.

Risks Related to the Manufacturing of BioNTech’s Product Candidates and Future Pipeline

BioNTech’s mRNA product candidates are based on novel technologies and any product candidates BioNTech develops may be complex and difficult to manufacture. BioNTech may encounter difficulties in manufacturing, product release, shelf life, testing, storage, supply chain management or shipping. If BioNTech or any of the third-party manufacturers BioNTech works with encounter such difficulties, BioNTech’s ability to supply materials for clinical trials or any approved product could be delayed or stopped.

The manufacturing processes for BioNTech’s product candidates are novel and complex. There are no immunotherapies commercialized to date or manufactured at such scale. Due to the novel nature of this technology and limited experience at larger scale production, BioNTech may encounter difficulties in manufacturing, product release, shelf life, testing, storage and supply chain management, or shipping. These difficulties could be due to any number of reasons including, but not limited to, complexities of producing batches at larger scale, equipment failure, choice and quality of raw materials and excipients, analytical testing technology, and product instability. In an effort to optimize product features, BioNTech has in the past and may in the future make changes to its product candidates in their manufacturing and stability formulation and conditions. This has in the past resulted in and may in the future result in BioNTech having to resupply batches for preclinical or clinical activities when there is insufficient product stability during storage and insufficient supply. Insufficient stability or shelf life of BioNTech’s product candidates could materially delay BioNTech or its collaborators’ ability to continue the clinical trial for that product candidate or require BioNTech to begin a new clinical trial with a newly formulated drug product, due to the need to manufacture additional preclinical or clinical supply.

 

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BioNTech’s rate of innovation is high, which has resulted in and will continue to cause a high degree of technology change that can negatively impact product comparability during and after clinical development. Furthermore, technology changes may drive the need for changes in, modification to, or the sourcing of new manufacturing infrastructure or may adversely affect third-party relationships.

The process to generate mRNA product candidates is complex and, if not developed and manufactured under well-controlled conditions, can adversely impact pharmacological activity. Furthermore, BioNTech has not manufactured immunotherapies at commercial scale. BioNTech may encounter difficulties in scaling up its manufacturing process, thereby potentially impacting clinical and commercial supply. Additionally, for individualized therapies, BioNTech may encounter issues with its ability to timely and efficiently manufacture product given the on-demand requirements of such therapies, thereby potentially impacting clinical and commercial supply.

As BioNTech continues developing new manufacturing processes for BioNTech’s drug substance and drug product, the changes BioNTech implements to manufacturing process may in turn impact specification and stability of the drug product. Changes in BioNTech’s manufacturing processes may lead to failure of lots and this could lead to a substantial delay in BioNTech’s clinical trial. BioNTech’s mRNA product candidates may prove to have a stability profile that leads to a lower than desired shelf life of the final approved immunotherapy. This poses risk in supply requirements, wasted stock and higher cost of goods.

BioNTech is dependent on a number of equipment providers who are also implementing novel technology. Further, BioNTech has developed its own custom manufacturing equipment for certain of its product candidates. If such equipment malfunctions or BioNTech encounters unexpected performance issues, BioNTech could encounter delays or interruptions to clinical and commercial supply.

Due to the number of different programs, BioNTech may have cross contamination of products inside of its factories, CROs, suppliers, or in the clinic that affect the integrity of BioNTech’s products. Additionally, for some programs the manufacturing scale is extremely small compared to the standard volumes of supply, such that BioNTech runs the risk of contaminating the process each time BioNTech reopens a container to use remaining supplies.

As BioNTech scales the manufacturing output for particular programs, BioNTech plans to continuously improve yield, purity, and the pharmaceutical properties of its product candidates from IND-enabling studies through commercial launch, including shelf life stability, and solubility properties of drug product and drug substance. Due to continuous improvement in manufacturing processes, BioNTech may switch processes for a particular program during development. However, after the change in process, more time is required for pharmaceutical property testing, such as six- or 12-month stability testing. That may require resupplying clinical material, or making additional GMP batches to keep up with clinical trial demand before such pharmaceutical property testing is completed.

BioNTech is utilizing a number of raw materials and excipients that are either new to the pharmaceutical industry or are being employed in a novel manner. Some of these raw materials and excipients have not been scaled to a level to support commercial supply and could experience unexpected manufacturing or testing failures, or supply shortages. Such issues with raw materials and excipients could cause delays or interruptions to clinical and commercial supply of BioNTech’s product candidates. Further, now and in the future one or more of BioNTech’s programs may have a single source of supply for raw materials and excipients.

BioNTech has established a number of analytical assays, and may have to establish several more, to assess the quality of BioNTech’s mRNA product candidates. BioNTech may identify gaps in its analytical testing strategy that might prevent release of product or could require product withdrawal or recall. For example, BioNTech may discover new impurities that have an impact on product safety, efficacy or stability. This may lead to an inability to release mRNA product candidates until the manufacturing or testing process is rectified.

 

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BioNTech products and product intermediates are extremely temperature sensitive, and BioNTech may learn that any or all of its products are less stable than desired. BioNTech may also find that transportation conditions negatively impact product quality. This may require changes to the formulation or manufacturing process for one or more of BioNTech’s product candidates and result in delays or interruptions to clinical or commercial supply. In addition, the cost associated with such transportation services and the limited pool of vendors may also add additional risks of supply disruptions.

Certain of BioNTech’s product candidates are uniquely manufactured for each patient and BioNTech may encounter difficulties in production, particularly with respect to scaling BioNTech’s manufacturing capabilities. If BioNTech or any of the third-party manufacturers with whom BioNTech contracts encounter these types of difficulties, BioNTech’s ability to provide its product candidates for clinical trials or its products for patients, if approved, could be delayed or stopped, or BioNTech may be unable to maintain a commercially viable cost structure.

BioNTech custom designs and manufactures certain product candidates that are unique and tailored specifically for each patient. Manufacturing unique lots of these product candidates is susceptible to product loss or failure due to issues with:

 

   

logistics associated with the collection of a patient’s tumor, blood or other tissue sample;

 

   

shipping such samples to a facility for genetic sequencing;

 

   

next-generation sequencing of the tumor mRNA;

 

   

biopsy of a sufficient quantity of cancerous tissue to allow for proper sequencing and identification of tumor-specific mutations;

 

   

identification of appropriate tumor-specific mutations;

 

   

the use of a software program, including proprietary and open source components, which is hosted in the cloud and a part of BioNTech’s product candidate, to assist with the design of the patient-specific mRNA, which software must be maintained and secured;

 

   

effective design of the patient-specific mRNA that encodes for the required neoantigens;

 

   

batch-specific manufacturing failures or issues that arise due to the uniqueness of each patient-specific batch that may not have been foreseen;

 

   

quality control testing failures;

 

   

unexpected failures of batches placed on stability;

 

   

shortages or quality control issues with single-use assemblies, consumables or critical parts sourced from third-party vendors that must be changed out for each patient-specific batch;

 

   

significant costs associated with individualized manufacturing that may adversely affect BioNTech’s ability to continue development;

 

   

successful and timely manufacture and release of the patient-specific batch;

 

   

shipment issues encountered during transport of the batch to the site of patient care;

 

   

the ability to define a consistent safety profile at a given dose when each participant receives a unique treatment; and

 

   

BioNTech’s reliance on single-source suppliers.

BioNTech also continues to evolve its own custom manufacturing equipment. This equipment may not function as designed, which may lead to deviations in the drug product being produced. This can lead to increased batch failure and the inability to supply patients enrolled in the clinical trial. If BioNTech’s clinical

 

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development plans are expanded, due to the custom nature of the equipment and single-use assemblies, BioNTech may not be able to supply this expanded need reliably without significant investments. In addition, there will be considerable time to scale up BioNTech’s facilities or build new facilities before BioNTech can begin to meet any commercial demand if one or more of BioNTech’s product candidates are approved. This expansion or addition of new facilities could also lead to product comparability issues, which can further delay introduction of new capacity.

As certain of BioNTech’s product candidates are manufactured for each individual patient, BioNTech will be required to maintain a chain of identity with respect to each patient’s tissue sample, sequence data derived from such tissue sample, analyze results of such patient’s genomic analysis, and the custom manufactured product for each patient. Maintaining such a chain of identity is difficult and complex, and failure to do so could result in product mix-up, adverse patient outcomes, loss of product, or regulatory action, including withdrawal of any approved products from the market. Further, as BioNTech’s product candidates are developed through early-stage clinical studies to later-stage clinical trials towards approval and commercialization, BioNTech expects that multiple aspects of the complicated collection, analysis, manufacture and delivery processes will be modified in an effort to optimize processes and results. These changes may not achieve the intended objectives, and any of these changes could cause BioNTech’s product candidates to perform differently than BioNTech expects, potentially affecting the results of clinical trials.

BioNTech’s inability to manufacture sufficient quantities of its product candidates, or BioNTech’s failure to comply with applicable regulatory requirements, would materially and adversely affect BioNTech’s business.

Manufacturing is a vital component of BioNTech’s individualized immunotherapy approach, and BioNTech has invested significantly in its manufacturing facilities. All internal manufacturing is performed under GMP guidelines. BioNTech does not rely on any external CMOs for the manufacture of BioNTech’s product candidates and at this time, BioNTech has limited redundancy among its facilities. Due to the individualized nature of BioNTech’s product candidates, BioNTech does not maintain product reserves. If any of BioNTech’s manufacturing facilities experiences difficulties, including related to manufacturing, product release, shelf life, testing, storage and supply chain management or shipping, BioNTech’s clinical development programs may be delayed or suspended until BioNTech can resume operations. BioNTech may also be required to incur significant expenditures to resolve such difficulties.

BioNTech facilities are subject to various regulatory requirements and may be subject to the inspection of the FDA or other regulatory authorities. If BioNTech cannot successfully manufacture material that conforms to BioNTech’s specifications and the strict regulatory requirements of the FDA, EMA or comparable regulatory authorities in other jurisdictions, BioNTech may not be able to rely on its manufacturing facilities for the manufacture of its product candidates. If the FDA, EMA or another comparable regulatory authority finds BioNTech’s facilities inadequate for the manufacture of its product candidates or if such facilities are subject to enforcement action in the future or are otherwise inadequate, BioNTech may need to find alternative manufacturing facilities, which would significantly impact BioNTech’s ability to develop, obtain regulatory approval for or market BioNTech’s product candidates.

Additionally, BioNTech may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments. If BioNTech were to encounter any of these difficulties, BioNTech’s ability to provide its product candidate to patients in clinical trials, or to provide product for the treatment of patients once approved, would be jeopardized.

BioNTech is subject to regulatory and operational risks associated with the physical and digital infrastructure at both BioNTech’s internal manufacturing facilities and at those of BioNTech’s external service providers.

While the design of BioNTech’s facilities is based on current standards for biotechnology facilities, it has not been reviewed or pre-approved by any regulatory agency, nor have BioNTech’s facilities been inspected by

 

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any regulatory agency such as the FDA. BioNTech has designed its facilities to incorporate a significant level of automation of equipment with integration of several digital systems to improve efficiency of operations. BioNTech has attempted to achieve a high level of digitization for clinical manufacturing facilities relative to industry standards. While this is meant to improve operational efficiency, this may pose additional risk of process equipment malfunction and even overall manufacturing system failure or shutdown due to internal or external factors including, but not limited to, design issues, system compatibility or potential cybersecurity breaches. This may lead to delay in supply or shutdown of BioNTech’s facilities. Any disruption in BioNTech’s manufacturing capabilities could cause delays in BioNTech’s production capacity for BioNTech’s drug substances or drug products, impose additional costs, or may require BioNTech to identify, qualify and establish an alternative manufacturing site, the occurrence of which could have a material adverse effect on BioNTech’s business, financial condition, results of operations and prospects.

As BioNTech expands its development and commercial capacity, BioNTech may establish additional manufacturing capabilities and expand to other locations or geographies, which may lead to regulatory delays or prove costly. If BioNTech fails to select the correct location, complete the construction in an efficient manner, recruit the required personnel, and generally manage BioNTech’s growth effectively, the development and production of BioNTech’s product candidates could be delayed or curtailed. Additional investments may be needed if changes in BioNTech’s manufacturing process lead to required changes in BioNTech’s infrastructure.

Certain of BioNTech’s product candidates rely on the availability of specialty raw materials, which may not be available to BioNTech on acceptable terms or at all.

BioNTech’s product candidates require many specialty raw materials, some of which are manufactured by small companies with limited resources and experience to support a commercial product, and the suppliers may not be able to deliver raw materials to BioNTech’s specifications. In addition, those suppliers normally support blood-based hospital businesses and generally do not have the capacity to support commercial products manufactured under GMP by biopharmaceutical firms. These suppliers may be ill-equipped to support BioNTech’s needs, especially in non-routine circumstances like an FDA inspection or medical crisis, such as widespread contamination. BioNTech also does not have contracts with many of these suppliers, and BioNTech may not be able to contract with them on acceptable terms or at all. Accordingly, BioNTech has experienced and BioNTech may in the future experience delays in receiving key raw materials to support clinical or commercial manufacturing.

In addition, some raw materials are currently available from a single supplier, or a small number of suppliers. BioNTech cannot be sure that these suppliers will remain in business or that they will not be purchased by one of BioNTech’s competitors or another company that is not interested in continuing to produce these materials for BioNTech’s intended purpose. In addition, the lead time needed to establish a relationship with a new supplier can be lengthy, and BioNTech may experience delays in meeting demand in the event BioNTech must switch to a new supplier. The time and effort to qualify a new supplier could result in additional costs, diversion of resources or reduced manufacturing yields, any of which would negatively impact BioNTech’s operating results. Further, BioNTech may be unable to enter into agreements with a new supplier on commercially reasonable terms, which could have a material adverse impact on BioNTech’s business.

BioNTech’s product candidates are inherently sensitive to shipping and storage conditions and could be subject to risk of loss or damage.

BioNTech’s product candidates are sensitive to temperature, storage and handling conditions. Loss in product candidates could occur if the product or product intermediates are not stored or handled properly. Shelf life for BioNTech’s product candidates may vary by product and is not fully quantified and is expected to be variable, and it is possible that BioNTech’s product candidates could be lost due to expiration prior to use. This has in the past led and could in the future lead to additional manufacturing costs and delays in BioNTech’s ability to supply required quantities for clinical trials or otherwise.

 

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BioNTech is subject to significant regulatory oversight with respect to manufacturing its product candidates. BioNTech manufacturing facilities or the manufacturing facilities of BioNTech’s third-party manufacturers or suppliers may not meet regulatory requirements. Failure to meet GMP requirements set forth in regulations promulgated by the FDA, the EMA and other comparable regulatory authorities could result in significant delays in and costs of BioNTech’s products.

The manufacturing of immunotherapies for clinical trials or commercial sale is subject to extensive regulation. GMP requirements govern manufacturing processes and procedures, including record-keeping, and the implementation and operation of quality systems to control and assure the quality of products and materials used in clinical trials. Poor control of the GMP production processes can lead to product quality failures that can impact BioNTech’s ability to supply product, resulting in cost overruns and delays to clinical timelines, which could be extensive. Such production process issues include but are not limited to:

 

   

critical deviations in the manufacturing process;

 

   

facility and equipment failures;

 

   

contamination of the product due to an ineffective quality control strategy;

 

   

facility contamination as assessed by the facility and utility environmental monitoring program;

 

   

ineffective process, equipment or analytical change management, resulting in failed lot release criteria;

 

   

raw material failures due to ineffective supplier qualification or regulatory compliance issues at critical suppliers;

 

   

ineffective product stability;

 

   

failed lot release or facility and utility quality control testing;

 

   

ineffective corrective actions or preventative actions taken to correct or avoid critical deviations due to BioNTech’s developing understanding of the manufacturing process as BioNTech scales; and

 

   

failed or defective components or consumables.

BioNTech must supply all necessary documentation in support of a BLA or other marketing authorization application on a timely basis and must adhere to the FDA’s, the EMA’s and other countries’ GMP requirements which are enforced, in the case of the FDA, in part through its facilities inspection program.

Regulatory authorities typically require representative manufacturing site inspections to assess adequate compliance with GMPs and manufacturing controls as described in the filing. If either BioNTech or one of its third- party manufacturing sites fails to provide sufficient quality assurance or control, approval to commercialize BioNTech’s product candidates may not be granted. Inspections by regulatory authorities may occur at any time during the development or commercialization phase of products. The inspections may be product-specific or facility-specific for broader GMP inspections or as a follow up to market or development issues that the regulatory agency may identify. Deficient inspection outcomes may influence the ability of BioNTech’s third-party manufacturers or suppliers to fulfill their supply obligations, impacting or delaying supply or delaying programs.

The manufacturing process for any products that BioNTech may develop is subject to the FDA’s, the EMA’s and other regulatory authorities’ approval processes, and BioNTech may need to contract with manufacturers who BioNTech believes can meet applicable regulatory authority requirements on an ongoing basis. If BioNTech or its third-party manufacturers are unable to reliably produce product candidates to specifications acceptable to the FDA, the EMA or other regulatory authorities, BioNTech or its collaborators may not obtain or maintain the approvals BioNTech or they need to commercialize such products. Even if BioNTech or its collaborators obtain regulatory approval for any of BioNTech’s immunotherapies, there is no assurance that either BioNTech or BioNTech’s CMOs will be able to manufacture BioNTech’s product candidates to

 

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specifications acceptable to the FDA, EMA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product, or to meet potential future demand. Any of these challenges could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of BioNTech’s product candidates, impair commercialization efforts or increase BioNTech’s cost of goods. The occurrence of any of the foregoing could have an adverse effect on BioNTech’s business, financial condition, results of operations and growth prospects.

In addition, BioNTech may not have direct control over the ability of its contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. Furthermore, all of BioNTech’s contract manufacturers are engaged with other companies to supply or manufacture materials or products for such companies, which exposes BioNTech’s contract manufacturers to regulatory risks for the production of such materials and products. As a result, failure to meet the regulatory requirements for the production of those materials and products may generally affect the regulatory status of BioNTech’s CMOs’ facilities. BioNTech’s failure, or the failure of its third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on BioNTech, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions, and criminal prosecutions, any of which could significantly and adversely affect supplies of BioNTech’s products and product candidates (including those of BioNTech’s collaborators) and BioNTech’s overall business operations. BioNTech’s potential future dependence upon others for the manufacture of BioNTech’s product candidates and raw materials may adversely affect BioNTech’s future profit margins and BioNTech’s ability to commercialize any products that receive regulatory approval on a timely and competitive basis.

The FDA, EMA and other regulatory authorities may require BioNTech to submit product samples of any lot of any approved product together with the protocols showing the results of applicable tests at any time. Under some circumstances, the FDA or other regulatory authorities may require that BioNTech does not distribute a lot or lots until the relevant agency authorizes such release. Deviations in the manufacturing process, including those affecting quality attributes and stability, may result in unacceptable changes in the product that could result in lot failures or product recalls. BioNTech’s third-party CMOs have, in the past, experienced lot failures and some may have experienced product recalls. Lot failures or product recalls with respect to product produced by either BioNTech’s own facilities or those of BioNTech’s third-party manufacturers could cause BioNTech and its collaborators to delay clinical trials or product launches, which could be costly to BioNTech and otherwise harm BioNTech’s business, financial condition, results of operations and prospects.

BioNTech also may encounter problems hiring and retaining the experienced scientific, quality-control and manufacturing personnel needed to operate BioNTech’s manufacturing processes and operations, which could result in delays in production or difficulties in maintaining compliance with applicable regulatory requirements. While BioNTech will train and qualify all personnel around the appropriate handling of its products and materials, BioNTech may not be able to control for or ultimately detect intentional sabotage or negligence by any employee or contractor.

Risks Related to the Commercialization of BioNTech’s Pipeline

The successful commercialization of BioNTech’s product candidates will depend in part on the extent to which governmental authorities, private health insurers and other third-party payors provide coverage and adequate reimbursement levels and implement pricing policies favorable for BioNTech’s product candidates. Failure to obtain or maintain coverage and adequate reimbursement for BioNTech’s product candidates, if approved, could limit BioNTech’s ability to market those products and decrease BioNTech’s ability to generate revenue.

The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford expensive treatments such as the medicines that BioNTech hopes to develop and sell.

 

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In addition, because several of BioNTech’s product candidates represent new approaches to the treatment of cancer, BioNTech cannot accurately estimate how these products would be priced, whether reimbursement could be obtained, or any potential revenue. Sales of BioNTech’s product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of BioNTech’s product candidates will be paid by health maintenance, managed care, pharmacy benefit, and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, BioNTech may not be able to successfully commercialize its product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow BioNTech to establish or maintain pricing sufficient to realize a sufficient return on BioNTech’s investment in any of its products.

There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products, including genetic medicines. In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, or HHS, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare. Private payors tend to follow CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to reimbursement for novel products such as BioNTech’s. Reimbursement agencies in Europe may be more conservative than CMS. For example, a number of cancer drugs have been approved for reimbursement in the United States but have not been approved for reimbursement in certain European countries.

Outside the United States, certain countries, including a number of member states of the European Union, set prices and reimbursement for pharmaceutical products, with limited participation from the marketing authorization holders. BioNTech cannot be sure that such prices and reimbursement will be acceptable to BioNTech or its collaborators. If the regulatory authorities in these jurisdictions set prices or reimbursement levels that are not commercially attractive for BioNTech or its collaborators, BioNTech’s revenues from sales by BioNTech or its collaborators, and the potential profitability of BioNTech’s drug products, in those countries would be negatively affected. An increasing number of countries are taking initiatives to attempt to reduce large budget deficits by focusing cost-cutting efforts on pharmaceuticals for their state-run health care systems. These international price control efforts have impacted all regions of the world, but have been most drastic in the European Union. Additionally, some countries require approval of the sale price of a product before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. As a result, BioNTech might obtain marketing approval for a product in a particular country, but then may experience delays in the reimbursement approval of BioNTech’s product or be subject to price regulations that would delay BioNTech’s commercial launch of the product, possibly for lengthy time periods, which could negatively impact the revenues BioNTech is able to generate from the sale of the product in that particular country.

Moreover, increasing efforts by governmental and third-party payors, in the United States and abroad, to cap or reduce healthcare costs may cause such organizations to limit both coverage and level of reimbursement for new products approved and, as a result, they may not cover or provide adequate payment for BioNTech’s product candidates. For example, the U.S. government recently released a “blueprint,” which is a plan to reduce the cost of drugs. The blueprint contains certain measures that the HHS is already working to implement. At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

BioNTech expects to experience pricing pressures in connection with the sale of any of BioNTech’s product candidates, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products in the marketplace.

 

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BioNTech faces significant competition in an environment of rapid technological and scientific change, and BioNTech’s failure to effectively compete would prevent BioNTech from achieving significant market penetration. Most of BioNTech’s competitors have significantly greater resources than BioNTech does and BioNTech may not be able to compete successfully.

The pharmaceutical market is intensely competitive and rapidly changing. Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies, and other public and private research organizations are pursuing the development of novel drugs for the same diseases that BioNTech is targeting or expects to target. Many of BioNTech’s competitors have:

 

   

greater financial, technical and human resources than BioNTech has at every stage of the discovery, development, manufacture and commercialization of products;

 

   

more extensive experience in preclinical testing, conducting clinical trials, obtaining regulatory approvals, and in manufacturing, marketing and selling drug products;

 

   

product candidates that are based on previously tested or accepted technologies;

 

   

products that have been approved or are in late stages of development; and

 

   

collaborative arrangements in BioNTech’s target markets with leading companies and research institutions.

BioNTech will face intense competition from drugs that have already been approved and accepted by the medical community for the treatment of the conditions for which BioNTech may develop drugs. BioNTech also expects to face competition from new drugs that enter the market. There are a number of drugs currently under development, which may become commercially available in the future, for the treatment of conditions for which BioNTech is trying, or may in the future try, to develop drugs. These drugs may be more effective, safer, less expensive, or marketed and sold more effectively, than any products BioNTech develops.

BioNTech anticipates competing with the largest pharmaceutical companies in the world, many of which are all currently conducting research in the fields of infectious diseases, immuno-oncology, rare genetic diseases and cancer immunotherapies. Some of these companies have greater financial and human resources than BioNTech currently has. In addition to these large pharmaceutical companies, BioNTech may directly compete with fully-integrated biopharmaceutical companies and other immunotherapy-focused oncology companies, as well as a number of companies focused on immunotherapies or shared tumor antigen and neoantigen therapeutics, some of which have entered into collaboration and funding agreements with larger pharmaceutical or biotechnology companies.

If BioNTech successfully develops product candidates, and obtains approval for them, BioNTech will face competition based on many different factors, including:

 

   

the safety and effectiveness of BioNTech’s products relative to alternative therapies, if any;

 

   

the ease with which BioNTech’s products can be administered and the extent to which patients accept relatively new routes of administration;

 

   

the timing and scope of regulatory approvals for these products;

 

   

the availability and cost of manufacturing, marketing and sales capabilities;

 

   

the price of any approved immunotherapy;

 

   

reimbursement coverage; and

 

   

intellectual property position.

BioNTech’s competitors may develop or commercialize products with significant advantages over any products BioNTech develops based on any of the factors listed above or on other factors. In addition,

 

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BioNTech’s competitors may develop collaborations with or receive funding from larger pharmaceutical or biotechnology companies, providing them with an advantage over BioNTech. BioNTech’s competitors may therefore be more successful in commercializing their products than BioNTech is, which could adversely affect BioNTech’s competitive position and business. Competitive products may make any products BioNTech develops obsolete or noncompetitive before BioNTech can recover the expenses of developing and commercializing BioNTech’s products, if approved.

The market opportunities for certain of BioNTech’s product candidates may be limited due to the rarity of the disease, or limited to those patients who are ineligible for or have failed prior treatments, and may be small. As the target patient populations for some of BioNTech’s programs are small, BioNTech must be able to successfully identify trial participants and achieve a significant market share to maintain profitability and growth.

The FDA often approves new therapies initially only for use by patients with relapsed or refractory advanced cancer. BioNTech expects to initially seek approval of certain of its product candidates in this context. Subsequently, for those products that prove to be sufficiently beneficial, if any, BioNTech would expect to seek approval in earlier lines of treatment and potentially as a first-line therapy but there is no guarantee that BioNTech’s product candidates, even if approved, would be approved for earlier lines of therapy, and, prior to any such approvals, BioNTech may have to conduct additional clinical trials. BioNTech is also developing product candidates for the treatment of rare diseases.

BioNTech’s projections of the number of people who have or will have the diseases BioNTech may be targeting may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. The number of trial participants may turn out to be lower than expected. Additionally, the potentially addressable patient population for BioNTech’s product candidates may be limited or may not be amenable to treatment with BioNTech’s product candidates. Even if BioNTech obtains significant market share for its products, if approved, because the potential target populations are small, BioNTech may never achieve profitability without obtaining regulatory approval for additional indications.

BioNTech currently has no marketing and sales organization and as a company, BioNTech has no experience in marketing pharmaceutical products. If BioNTech is unable to establish marketing and sales capabilities on its own or through third parties, BioNTech may not be able to market and sell its product candidates effectively in the United States and other jurisdictions, if approved, or generate product sales revenue.

Given BioNTech’s stage of development, BioNTech has no sales, distribution or marketing capabilities, and BioNTech has not designed its preclinical studies and clinical trials with specific commercialization or marketing considerations in mind. To successfully commercialize any products that may result from BioNTech’s development programs, BioNTech will need to develop sales and marketing capabilities in the United States, Europe and other regions, either on its own or with others. BioNTech may enter into collaborations with other entities to utilize their mature marketing and distribution capabilities, but BioNTech may be unable to enter into marketing agreements on favorable terms, if at all. If BioNTech’s future collaborators do not commit sufficient resources to commercialize BioNTech’s future products, if any, and BioNTech is unable to develop the necessary marketing capabilities on its own, BioNTech may be unable to generate sufficient product sales revenue to sustain its business. BioNTech will be competing with many companies that currently have extensive and well-funded marketing and sales operations. Without a significant internal team or the support of a third party to perform marketing and sales functions, BioNTech may be unable to compete successfully against these more established companies.

 

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BioNTech’s future profitability, if any, depends in part on BioNTech’s and its collaborators’ ability to penetrate global markets, where BioNTech would be subject to additional regulatory burdens and other risks and uncertainties associated with international operations that could materially adversely affect BioNTech’s business.

BioNTech’s future profitability, if any, will depend in part on BioNTech’s ability and the ability of its collaborators to commercialize any products that BioNTech or its collaborators may develop in markets throughout the world. Commercialization of products in various markets could subject BioNTech to risks and uncertainties, including:

 

   

obtaining, on a country-by-country basis, the applicable marketing authorization from the competent regulatory authority;

 

   

the burden of complying with complex and changing regulatory, tax, accounting, labor and other legal requirements in each jurisdiction that BioNTech or its collaborators pursue;

 

   

reduced protection for intellectual property rights;

 

   

differing medical practices and customs affecting acceptance in the marketplace;

 

   

import or export licensing requirements;

 

   

governmental controls, trade restrictions or changes in tariffs;

 

   

economic weakness, including inflation, or political instability in particular non-U.S. economies and markets;

 

   

production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

 

   

longer accounts receivable collection times;

 

   

longer lead times for shipping;

 

   

language barriers;

 

   

foreign currency exchange rate fluctuations;

 

   

the impact of public health epidemics on employees and the global economy, such as the current coronavirus epidemic;

 

   

reimbursement, pricing and insurance regimes; and

 

   

the interpretation of contractual provisions governed by local laws in the event of a contract dispute.

BioNTech does not have prior experience in all of these areas, and the experience BioNTech does have in some of these areas is limited. BioNTech’s collaborators may have limited experience in these areas as well. Failure to successfully navigate these risks and uncertainties may limit or prevent market penetration for any products that BioNTech or its collaborators may develop, which would limit their commercial potential and BioNTech’s revenues.

Even if BioNTech obtains regulatory approval for its product candidates, the products may not gain the market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community necessary for commercial success.

Even with the requisite approvals, the commercial success of BioNTech’s products will depend in part on the medical community, patients, and third-party or governmental payors accepting immunotherapies in general, and BioNTech’s products in particular, as medically useful, cost-effective and safe. Any product that BioNTech brings to the market may not gain market acceptance by physicians, trial participants, third-party payors, and others in the medical community. Additionally, ethical, social and legal concerns about genetic research could

 

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result in additional regulations restricting or prohibiting the products and processes BioNTech may use. If these products do not achieve an adequate level of acceptance, BioNTech may not generate significant product sales revenue and may not become profitable. The degree of market acceptance of BioNTech’s product candidates, if approved for commercial sale, will depend on a number of factors, including:

 

   

the potential efficacy and potential advantages over alternative treatments;

 

   

the ability to offer BioNTech’s products, if approved, at competitive prices;

 

   

the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling;

 

   

the prevalence and severity of any side effects resulting from checkpoint inhibitors or other drugs or therapies with which BioNTech’s products are administered;

 

   

relative convenience and ease of administration;

 

   

any restrictions on the use of BioNTech’s products, if approved, together with other medications;

 

   

the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

 

   

the strength of marketing and distribution support and timing of market introduction of competitive products;

 

   

publicity concerning BioNTech’s products or competing products and treatments; and

 

   

sufficient third-party insurance coverage or reimbursement, and patients’ willingness to pay out-of-pocket in the absence of third-party coverage or adequate reimbursement.

Even if a potential product displays a favorable efficacy and safety profile in preclinical studies and clinical trials, market acceptance of the product will not be known until after it is launched. BioNTech’s efforts to educate the medical community and third-party payors on the benefits of the products may require significant resources and may never be successful. BioNTech’s efforts to educate the marketplace may require more resources than are required by the conventional technologies marketed by BioNTech’s competitors due to the complexity and uniqueness of BioNTech’s programs.

Commercial success of any approved products will also depend in large part on the availability of coverage and adequate reimbursement from third-party payors, including government payors such as the Medicare and Medicaid programs and entry into managed care organizations, which may be affected by existing and future healthcare reform measures designed to reduce the cost of healthcare. Third-party payors could require BioNTech to conduct additional studies, including post-marketing studies related to the cost effectiveness of a product, to qualify for reimbursement, which could be costly and divert BioNTech’s resources. If government and other healthcare payors do not provide adequate coverage and reimbursement levels for any of BioNTech’s products once approved, whether due to healthcare reform legislation or otherwise, market acceptance and commercial success would be reduced.

In addition, if any of BioNTech’s products are approved for marketing, BioNTech or a collaborator will be subject to significant regulatory obligations regarding the submission of safety and other post-marketing information and reports for such product, and will need to continue to comply (or ensure that BioNTech’s third-party providers comply) with GMP and current good clinical practices, or GCP, for any clinical trials that BioNTech or a collaborator conduct post-approval. In addition, there is always the risk that BioNTech or a collaborator or regulatory authority might identify previously unknown problems with a product post-approval, such as adverse events of unanticipated severity or frequency. Compliance with these requirements is costly, and any such failure to comply or other issues with BioNTech’s product candidates identified post-approval could have a material adverse impact on BioNTech’s business, financial condition and results of operations.

 

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Coverage and reimbursement may be limited or unavailable in certain market segments for BioNTech’s product candidates, which could make it difficult for BioNTech to sell its product candidates, if approved, profitably.

Successful sales of BioNTech’s product candidates, if approved, depend on the availability of coverage and adequate reimbursement from third-party payors including governmental healthcare programs, such as Medicare and Medicaid, managed care organizations and commercial payors, among others. Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which BioNTech obtains regulatory approval. In addition, because BioNTech’s product candidates represent new approaches to the treatment of cancer, BioNTech cannot accurately estimate the potential revenue from its product candidates.

Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Obtaining coverage and adequate reimbursement from third-party payors is critical to new product acceptance.

Third-party payors decide which drugs and treatments they will cover and the amount of reimbursement. Reimbursement by a third-party payor may depend upon a number of factors, including, but not limited to, the third-party payor’s determination that use of a product is:

 

   

a covered benefit under its health plan;

 

   

safe, effective and medically necessary;

 

   

appropriate for the specific patient;

 

   

cost-effective; and

 

   

neither experimental nor investigational.

Obtaining coverage and reimbursement of a product from a government or other third-party payor is a time- consuming and costly process that could require BioNTech to provide to the payor supporting scientific, clinical and cost-effectiveness data for the use of BioNTech’s products. Even if BioNTech obtains coverage for a given product, if the resulting reimbursement rates are insufficient, hospitals may not approve BioNTech’s product for use in their facility or third-party payors may require co-payments that patients find unacceptably high. Patients are unlikely to use BioNTech’s product candidates unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of BioNTech’s product candidates. Separate reimbursement for the product itself may or may not be available. Instead, the hospital or administering physician may be reimbursed only for providing the treatment or procedure in which BioNTech’s product is used. Further, from time to time, CMS revises the reimbursement systems used to reimburse health care providers, including the Medicare Physician Fee Schedule and Outpatient Prospective Payment System, which may result in reduced Medicare payments. In some cases, private third-party payors rely on all or portions of Medicare payment systems to determine payment rates. Changes to government healthcare programs that reduce payments under these programs may negatively impact payments from private third-party payors, and reduce the willingness of physicians to use BioNTech’s product candidates.

In the United States, no uniform policy of coverage and reimbursement for products exists among third- party payors. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product. Adequate third-party reimbursement may not be available to enable BioNTech to maintain price levels sufficient to realize an appropriate return on BioNTech’s investment in product development.

BioNTech intends to seek approval to market its product candidates in the United States, the European Union and other selected jurisdictions. If BioNTech obtains approval for its product candidates in any particular jurisdiction, BioNTech will be subject to rules and regulations in that jurisdiction. In some countries, particularly

 

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those in Europe, the pricing of biologics is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after obtaining marketing approval of a product candidate. Some of these countries may require the completion of clinical trials that compare the cost-effectiveness of a particular product candidate to currently available therapies. Other member states allow companies to fix their own prices for medicines, but monitor and control company profits. The downward pressure on health care costs has become very intense. As a result, increasingly high barriers are being erected to the entry of new products into the marketplace. In addition, in some countries, cross-border imports from low-priced markets exert a commercial pressure on pricing within a country.

The marketability of any product candidates for which BioNTech receives regulatory approval for commercial sale may suffer if government and other third-party payors fail to provide coverage and adequate reimbursement. BioNTech expects downward pressure on pharmaceutical pricing to continue. Further, coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which BioNTech receives regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

The advancement of healthcare reform legislation may increase the difficulty and cost for BioNTech to obtain marketing approval of and commercialize any product candidates BioNTech or its collaborators develop and may adversely affect the prices for such product candidates.

In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs. For example, in March 2010, the ACA was passed, which substantially changes the way health care is financed by both governmental and private insurers, and significantly impacts the U.S. pharmaceutical industry. The ACA, among other things, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and promoted a new Medicare Part D coverage gap discount program. Considerable uncertainty remains regarding the implementation and impact of the ACA.

Some of the provisions of the ACA have yet to be fully implemented, while certain provisions have been subject to judicial and Congressional challenges. The Tax Cuts and Jobs Act of 2017, or the TCJA, includes a provision repealing the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” CMS has recently proposed regulations that would give states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces. Further, on October 13, 2017, an executive order was signed terminating the cost-sharing reduction, or CSR, subsidies that reimburse insurers under the ACA. The loss of the CSR payments is expected to increase premiums on certain policies issued by qualified health plans under the ACA. Several state Attorneys General filed suit to stop the administration from terminating the subsidies, but their request for a restraining order was denied by a federal judge in California on October 25, 2017. Another executive order was signed directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. With the current presidential administration and Congress, there may be additional administrative or legislative changes, including modification, repeal or replacement of all, or certain provisions of, the ACA. However, it remains to be seen whether new legislation modifying the ACA will be enacted and, if so, precisely what the new legislation will provide, when it will be enacted and what impact it will have on the availability of healthcare and containing or lowering the cost of healthcare. The implications of a potential repeal or replacement of the ACA, for BioNTech and BioNTech’s collaborators’ business and financial condition, if any, are not yet clear.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. The Budget Control Act of 2011, among other things, created measures for spending reductions by

 

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Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers up to 2% per fiscal year. These reductions will remain in effect through 2025 unless additional congressional action is taken.

The delivery of healthcare in the European Union, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than European Union, law and policy. National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most European Union member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing European Union and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of BioNTech’s product candidates, restrict or regulate post- approval activities, and affect BioNTech’s ability to commercialize any products for which BioNTech obtains marketing approval.

BioNTech expects that additional healthcare reform measures or proposals will be adopted in the future, any of which could limit the amounts that governments will pay for healthcare products and services, which could result in reduced demand for BioNTech’s product candidates or additional pricing pressures. In the event that the pricing structures for healthcare products, such as the product candidates BioNTech is developing, change materially and limit payments for such product candidates, BioNTech’s business will be adversely impacted as BioNTech’s products may no longer be commercially viable based on their expected net present value; BioNTech may have invested significant resources in products that cannot be commercially developed; or BioNTech may determine that assets that have reached an early phase of development cannot or will not be taken into further development, notwithstanding their clinical viability. In addition, development assets or clinical programs that are part of BioNTech’s collaborations may no longer be deemed commercially viable to pursue based on BioNTech’s collaborators’ assessments of the impact of any proposed, announced, or legislated pricing reforms.

BioNTech cannot predict what healthcare reform initiatives may be adopted in the future. Further legislative and regulatory developments are likely, and BioNTech expects ongoing initiatives to increase pressure on drug pricing. Such reforms could have an adverse effect on anticipated revenues from product candidates that BioNTech may successfully develop and for which BioNTech may obtain regulatory approval, and may affect BioNTech’s overall financial condition and ability to develop product candidates.

European Union drug marketing and reimbursement regulations may materially affect BioNTech’s ability to market and receive coverage for BioNTech’s products in the European Union member states.

BioNTech intends to seek approval to market its product candidates in both the United States and in other selected jurisdictions. If BioNTech obtains approval for its product candidates in a particular jurisdiction, BioNTech will be subject to rules and regulations in that jurisdiction. In some countries, particularly those in the European Union, the pricing of biologics is subject to governmental control and other market regulations that could put pressure on the pricing and usage of BioNTech’s product candidates. In these countries, pricing negotiations with governmental authorities can take considerable time after obtaining marketing approval of a product candidate. In addition, market acceptance and sales of BioNTech’s product candidates will depend significantly on the availability of adequate coverage and reimbursement from third-party payors for BioNTech’s product candidates and may be affected by existing and future healthcare reform measures.

In addition, in most countries outside the United States, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing and reimbursement vary widely from country to country. For example, the European Union provides options for its member states to restrict the

 

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range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. In some countries, BioNTech may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of any of BioNTech’s product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of BioNTech’s products. Historically, products launched in the European Union do not follow price structures of the United States and, generally, prices tend to be significantly lower in the European Union. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If pricing is set at unsatisfactory levels or if reimbursement of BioNTech’s products is unavailable or limited in scope or amount, BioNTech’s revenues from sales by BioNTech or its collaborators and the potential profitability of any of BioNTech’s product candidates in those countries would be negatively affected.

Risks Related to BioNTech’s Reliance on Third Parties

BioNTech has entered into several arrangements with a related party for the performance of nonclinical research programs, and these arrangements present potential conflicts of interest.

BioNTech has had a longstanding relationship with Translational Oncology at the University Medical Center of the Johannes Gutenberg University Mainz (Translationale Onkologie an der Universitätsmedizin der Johannes Gutenberg Universität Mainz gemeinnützige GmbH), or TRON, a non-profit limited liability company engaged in biopharmaceutical research. During the year ended December 31, 2019 until the resignation of Prof. Ugur Sahin, M.D. as Managing Director for Science and Research at TRON on September 10, 2019, and during the year ended December 31, 2018, the aggregate value of the transactions related to these agreements with TRON amounted to €6.3 million and €6.6 million, respectively, and TRON’s research has historically constituted a significant portion of BioNTech’s discovery pipeline and target discovery engine. Prof. Ugur Sahin, M.D., BioNTech’s co-founder and Chief Executive Officer, co-founded TRON and served as Managing Director at TRON until 2019 and currently serves as a Professor of Medicine at the University of Mainz. Prof. Sahin resigned from this position with TRON, effective September 10, 2019. Additionally, Prof. Christoph Huber, M.D., a member of BioNTech’s Supervisory Board, served on TRON’s supervisory board until his resignation in April 2019. BioNTech and TRON also share certain intellectual property. Prof. Ugur Sahin, M.D., our co-founder and Chief Executive Officer, owns a significant amount of shares in TRON. During the year ended December 31, 2019, the aggregate value of transactions related to these agreements with TRON amounted to €10.0 million pursuant to these agreements (€6.6 million during the year ended December 31, 2018).

The existence or appearance of a conflict of interest could depress the price of the ADSs or attract scrutiny from shareholders, regulators or other stakeholders. Additionally, any conflicts of interest would create the risk that BioNTech’s officers may favor their personal interests over those of BioNTech’s shareholders.

BioNTech relies on third parties in the conduct of significant aspects of BioNTech’s preclinical studies and clinical trials and intend to rely on third parties in the conduct of future clinical trials. If these third parties do not successfully carry out their contractual duties, fail to comply with applicable regulatory requirements or fail to meet expected deadlines, BioNTech may be unable to obtain regulatory approval for its product candidates.

BioNTech currently relies and expects to continue to rely on third parties, such as CROs, clinical data management organizations, collaborators, medical institutions and clinical investigators, to conduct various and significant elements of BioNTech’s clinical trials. BioNTech currently relies and expects to continue to rely on

 

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third parties to conduct certain research and preclinical testing activities. In some cases, these third parties may terminate their engagements with BioNTech. If BioNTech needs to enter into alternative arrangements, it would delay BioNTech’s discovery or product development activities.

BioNTech’s reliance on these third parties for research and development activities will reduce BioNTech’s control over these activities but will not relieve BioNTech of its regulatory or contractual responsibilities. BioNTech is responsible for ensuring that each of its preclinical studies and clinical trials is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards. For example, BioNTech is responsible for ensuring that each of its clinical trials is conducted in accordance with the general investigational plan and protocols for the trial.

Moreover, the FDA requires BioNTech to comply with GCP for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. BioNTech also is required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity, and civil and criminal sanctions. For any violations of laws and regulations during the conduct of BioNTech’s preclinical studies and clinical trials, BioNTech could be subject to warning letters or enforcement action that may include civil penalties up to and including criminal prosecution.

BioNTech and its CROs are required to comply with regulations, including GCP, for conducting, monitoring, recording and reporting the results of preclinical studies and clinical trials to ensure that the data and results are scientifically credible and accurate and that the trial participants are adequately informed, among other things, of the potential risks of participating in clinical trials. BioNTech also is responsible for ensuring that the rights of its clinical trial participants are protected. These regulations are enforced by the FDA, the competent authorities of the member states, and comparable regulatory authorities of other jurisdictions for any product candidates in clinical development. The FDA enforces GCP regulations through periodic inspections of clinical trial sponsors, principal investigators and trial sites. If BioNTech or its CROs fail to comply with applicable GCP, the clinical data generated in BioNTech’s clinical trials may be deemed unreliable and the FDA or comparable regulatory authorities of other jurisdictions may require BioNTech to perform additional clinical trials before approving BioNTech’s marketing applications. BioNTech cannot assure you that, upon inspection, the FDA will determine that any of BioNTech’s future clinical trials will comply with GCP. In addition, BioNTech’s clinical trials must be conducted with product candidates produced in accordance with the requirements of GMP regulations. BioNTech’s failure or the failure of its CROs to comply with these regulations may require BioNTech to repeat clinical trials, which would delay the regulatory approval process and could also subject BioNTech to enforcement action.

Although BioNTech has designed and in the future intends to design the clinical trials for certain of its product candidates, BioNTech’s collaborators will design the clinical trials that they are managing (in some cases, with BioNTech’s input) and in the case of clinical trials controlled by BioNTech, BioNTech expects that CROs will conduct all of the clinical trials. As a result, many important aspects of BioNTech’s development programs, including their conduct and timing, are outside of BioNTech’s direct control. BioNTech’s reliance on third parties to conduct future preclinical studies and clinical trials results in less direct control over the management of data developed through preclinical studies and clinical trials than would be the case if BioNTech were relying entirely upon its own staff. Communicating with outside parties can also potentially lead to mistakes as well as difficulties in coordinating activities. Outside parties may:

 

   

have staffing difficulties;

 

   

fail to comply with contractual obligations;

 

   

experience regulatory compliance issues;

 

   

undergo changes in priorities or become financially distressed;

 

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form relationships with other entities, some of which may be BioNTech’s competitors;

 

   

have human errors; or

 

   

be subject to cyberattacks.

These factors may materially adversely affect the willingness or ability of third parties to conduct BioNTech’s preclinical studies and clinical trials and may subject BioNTech to unexpected cost increases that are beyond BioNTech’s control. If the CROs do not perform preclinical studies and clinical trials in a satisfactory manner, breach their obligations to BioNTech or fail to comply with regulatory requirements, the development, regulatory approval and commercialization of BioNTech’s product candidates may be delayed, BioNTech may not be able to obtain regulatory approval and commercialize its product candidates, or BioNTech’s development programs may be materially and irreversibly harmed. If BioNTech is unable to rely on preclinical and clinical data collected by its CROs, BioNTech could be required to repeat, extend the duration of, or increase the size of any clinical trials BioNTech conducts and this could significantly delay commercialization and require significantly greater expenditures.

BioNTech also relies on other third parties to transport, store and distribute the required materials for BioNTech’s clinical trials. In the past certain of BioNTech’s third-party vendors have mishandled BioNTech’s materials, resulting in loss of full or partial lots of material. Any further performance failure on the part of these third parties could result in damaged products and could delay clinical development or marketing approval of any product candidates BioNTech may develop or commercialization of BioNTech’s medicines, if approved, producing additional losses and depriving BioNTech of potential product sales revenue, causing BioNTech to default on its contractual commitments, result in losses that are not covered by insurance, and damage BioNTech’s reputation and overall perception of BioNTech’s products in the marketplace. Each of the risks set forth above may be exacerbated by the COVID-19 pandemic currently affecting the global community and the global economy.

BioNTech’s existing collaborations, or any future collaboration arrangements that BioNTech may enter into, may not be successful, which could significantly limit the likelihood of receiving the potential economic benefits of the collaboration and adversely affect BioNTech’s ability to develop and commercialize its product candidates.

BioNTech has entered into collaborations under which its collaborators have provided, and may in the future provide, funding and other resources for developing and potentially commercializing BioNTech’s product candidates. BioNTech expects to enter into additional collaborations to access additional funding, capabilities and expertise in the future. BioNTech’s existing collaborations, and any future collaborations BioNTech enters into, may pose a number of risks, including the following:

 

   

collaborators may not perform or prioritize their obligations as expected;

 

   

the clinical trials conducted as part of such collaborations may not be successful;

 

   

collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization of programs based on clinical trial results, changes in the collaborators’ focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;

 

   

collaborators may delay clinical trials, provide insufficient funding for clinical trials, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing;

 

   

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with BioNTech’s product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than BioNTech’s;

 

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product candidates developed in collaborations with BioNTech may be viewed by BioNTech’s collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the development or commercialization of BioNTech’s product candidates;

 

   

a collaborator with marketing and distribution rights to one or more of BioNTech’s product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product;

 

   

disagreements with collaborators, including disagreements over proprietary rights, contract interpretation, or the preferred course of development of any product candidates, may cause delays or termination of the research, development or commercialization of such product candidates, may lead to additional responsibilities for BioNTech with respect to such product candidates, or may result in litigation or arbitration, any of which would be time-consuming and expensive;

 

   

collaborators may not properly maintain, protect, defend or enforce BioNTech’s intellectual property rights or may use BioNTech’s proprietary information in such a way as to invite litigation that could jeopardize or invalidate BioNTech’s intellectual property or proprietary information or expose BioNTech to potential litigation;

 

   

disputes may arise with respect to the ownership of intellectual property developed pursuant to BioNTech’s collaborations;

 

   

collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose BioNTech to litigation and potential liability;

 

   

collaborations may be terminated for the convenience of the collaborator and, if terminated, the development of BioNTech’s product candidates may be delayed, and BioNTech could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates;

 

   

future relationships may require BioNTech to incur non-recurring and other charges, increase BioNTech’s near- and long-term expenditures, issue securities that dilute BioNTech’s existing shareholders, or disrupt BioNTech’s management and business;

 

   

BioNTech could face significant competition in seeking appropriate collaborators, and the negotiation process is time-consuming and complex; and

 

   

BioNTech’s international operations through any future collaborations, acquisitions or joint ventures may expose BioNTech to certain operating, legal and other risks not encountered in the United States.

If BioNTech’s collaborations do not result in the successful development and commercialization of programs, or if one of BioNTech’s collaborators terminates its agreement with BioNTech, BioNTech may not receive any future research funding or milestone, earn-out, royalty, or other contingent payments under the collaborations. If BioNTech does not receive the funding it expects under these agreements, BioNTech’s development of product candidates could be delayed and BioNTech may need additional resources to develop its product candidates. In addition, in general BioNTech’s collaborators have the right to terminate their agreements with BioNTech for convenience. If one of BioNTech’s collaborators terminates its agreement with BioNTech, BioNTech may find it more difficult to attract new collaborators and the perception of BioNTech in the business and financial communities could be adversely affected. All of the risks relating to product development, regulatory approval and commercialization described in this proxy statement/prospectus apply to the activities of BioNTech’s collaborators.

If BioNTech is not able to establish collaborations on commercially reasonable terms, BioNTech may have to alter its research, development and commercialization plans.

BioNTech’s research and product development programs and the potential commercialization of any product candidates BioNTech develops alone or with collaborators will require substantial additional cash to

 

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fund expenses, and BioNTech expects that it will continue to seek collaborative arrangements with others in connection with the development and potential commercialization of current and future product candidates or the development of ancillary technologies. BioNTech faces significant competition in establishing relationships with appropriate collaborators. In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators. Whether BioNTech reaches a definitive agreement for a collaboration will depend, among other things, upon BioNTech’s assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors. Those factors may include, among other things and as applicable for the type of potential product or technology, an assessment of the opportunities and risks of BioNTech’s technology, the design or results of studies or trials, the likelihood of approval, if necessary, of the FDA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products and technologies and industry and market conditions generally.

Current or future collaborators may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with BioNTech. Additionally, BioNTech may be restricted under existing collaboration agreements from entering into future agreements on certain terms or for certain development activities with potential collaborators. For example, BioNTech has granted exclusive rights or options to Pfizer for certain targets, and under the terms of BioNTech’s respective collaboration agreements with them BioNTech will be restricted from granting rights to other parties to use BioNTech’s mRNA technology to pursue potential products that address those targets. Similarly, BioNTech’s collaboration agreements have in the past and may in the future contain non-competition provisions that could limit BioNTech’s ability to enter into collaborations with future collaborators.

Collaborations are complex and time-consuming to negotiate and document. BioNTech may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If BioNTech does enter into additional collaboration agreements, the negotiated terms may force BioNTech to relinquish rights that diminish BioNTech’s potential profitability from development and commercialization of the subject product candidates or others. If BioNTech is unable to enter into additional collaboration agreements, BioNTech may have to curtail the research and development of the product candidate or technology for which BioNTech is seeking to collaborate, reduce or delay research and development programs, delay potential commercialization timelines, reduce the scope of any sales or marketing activities or undertake research, development or commercialization activities at BioNTech’s own expense. If BioNTech elects to increase its expenditures to fund research, development or commercialization activities on its own, BioNTech may need to obtain additional capital, which may not be available to BioNTech on acceptable terms or at all.

BioNTech has entered into in-licensing arrangements and may form or seek to enter into additional licensing arrangements in the future, and BioNTech may not realize the benefits of such licensing arrangements.

BioNTech is a party to licenses that give BioNTech rights to third-party intellectual property, including patents and patent applications, that are necessary or useful for BioNTech’s business. In particular, BioNTech has obtained licenses from CellScript LLC and its affiliate, mRNA RiboTherapeutics, Inc., to patent rights claiming certain uses of modified RNA, as well as licenses from certain other parties for intellectual property useful in pharmaceutical formulations. BioNTech may enter into additional licenses to third-party intellectual property in the future.

The success of products developed based on in-licensed technology will depend in part on the ability of BioNTech’s current and future licensors to prosecute, obtain, maintain, protect, enforce and defend patent protection for BioNTech’s in-licensed intellectual property. BioNTech’s current and future licensors may not successfully prosecute the patent applications BioNTech licenses. Even if patents were issued in respect of these

 

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patent applications, BioNTech’s licensors may fail to maintain these patents, may determine not to pursue litigation against other companies that are infringing these patents, or may pursue such litigation less aggressively than BioNTech would. Without protection for the intellectual property BioNTech licenses, other companies might be able to offer substantially identical products for sale, which could adversely affect BioNTech’s competitive business position and harm BioNTech’s business prospects. In addition, BioNTech sublicenses its rights under various third-party licenses to BioNTech’s collaborators. Any impairment of these sublicensed rights could result in reduced revenues under BioNTech’s collaboration agreements or result in termination of an agreement by one or more of BioNTech’s collaborators.

Disputes may also arise between BioNTech and BioNTech’s licensors regarding intellectual property subject to a license agreement, including:

 

   

the scope of rights granted under the license agreement and other interpretation-related issues;

 

   

whether and the extent to which BioNTech’s technology and processes infringe, misappropriate or otherwise violate the intellectual property of the licensor that is not subject to the licensing agreement;

 

   

BioNTech’s right to sublicense patent and other intellectual property rights to third parties under collaborative relationships;

 

   

BioNTech’s diligence obligations with respect to the use of the licensed intellectual property and technology in relation to BioNTech’s development and commercialization of its product candidates, and what activities satisfy those diligence obligations;

 

   

the ownership of inventions, trade secrets, know-how and other intellectual property resulting from the joint creation or use of intellectual property by BioNTech’s licensors and BioNTech and BioNTech’s collaborators; and

 

   

the priority of invention of patented technology.

If disputes over intellectual property that BioNTech has in-licensed or other related contractual rights prevent or impair BioNTech’s ability to maintain its current licensing arrangements on favorable terms, BioNTech may be unable to successfully develop and commercialize the affected product candidates.

BioNTech is generally also subject to all of the same risks with respect to protection of intellectual property that BioNTech licenses, as BioNTech is for intellectual property that BioNTech owns, which are described below. If BioNTech, its co-owners or its licensors fail to adequately protect, defend, maintain or enforce this intellectual property, BioNTech’s ability to commercialize products could suffer.

If BioNTech commits certain material breaches and fails to cure them (if such breach is curable), BioNTech is required to repurchase shares held by the Bill & Melinda Gates Foundation.

If BioNTech commits a specified material breach under the letter agreement with the Bill & Melinda Gates Foundation, or BMGF, and such breach remains uncured after a specified period of time (if curable), BioNTech is required to either (i) repurchase the shares held by BMGF or locate a third party to purchase the shares from BMGF, in either case at a price that is the greater of the original purchase price or the fair market value of the shares at the time of repurchase, or (ii) if BioNTech cannot meet the requirements under (i) (e.g., because BioNTech does not have sufficient cash reserves), then BioNTech must use its best efforts to effect BMGF’s withdrawal right as soon as practicable, which may mean acquiring the shares in tranches over time. If BioNTech is required to repurchase BMGF’s shares, BioNTech’s financial position could be materially and adversely affected.

BioNTech relies on third parties to manufacture certain of its clinical product supplies, and BioNTech may have to rely on third parties to produce and process its product candidates, if approved.

Although BioNTech expects to continue using its own clinical manufacturing facilities, BioNTech may need to rely on outside vendors to manufacture supplies and process its product candidates. BioNTech has not yet

 

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caused its product candidates to be manufactured or processed on a commercial scale and may not be able to achieve commercial- scale manufacturing and processing and may be unable to create an inventory of mass-produced, off-the-shelf product to satisfy demands for BioNTech’s product candidates.

BioNTech does not yet have sufficient information to reliably estimate the cost of the commercial manufacturing and processing of BioNTech’s product candidates, and the actual cost to manufacture and process BioNTech’s product candidates could materially and adversely affect the commercial viability of BioNTech’s product candidates. As a result, BioNTech may never be able to develop a commercially viable product.

In addition, BioNTech’s reliance on a limited number of third-party manufacturers exposes BioNTech to the following risks:

 

   

BioNTech may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and the FDA or other regulatory authorities may have questions regarding any replacement contractor. This may require new testing and regulatory interactions. In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of BioNTech’s products after receipt of regulatory authority questions, if any;

 

   

BioNTech’s third-party manufacturers might be unable to timely formulate and manufacture BioNTech’s product or produce the quantity and quality required to meet BioNTech’s clinical and commercial needs, if any;

 

   

CMOs may not be able to execute BioNTech’s manufacturing procedures appropriately;

 

   

BioNTech’s future CMOs may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply BioNTech’s clinical trials or to successfully produce, store and distribute BioNTech’s products;

 

   

manufacturers are subject to ongoing periodic unannounced inspection by the FDA, the U.S. Drug Enforcement Administration and corresponding state agencies and by regulatory authorities in other jurisdictions to ensure strict compliance with GMP and other government regulations and corresponding standards in other jurisdictions. BioNTech does not have control over third-party manufacturers’ compliance with these regulations and standards;

 

   

BioNTech may not own, or may have to share, the intellectual property rights to any improvements made by BioNTech’s third-party manufacturers in the manufacturing process for BioNTech’s products;

 

   

BioNTech’s third-party manufacturers could breach or terminate their agreement with BioNTech; and

 

   

BioNTech’s CMOs would also be subject to the same risks BioNTech faces in developing its own manufacturing capabilities, as described above.

Each of these risks could delay BioNTech’s clinical trials, the approval, if any, of BioNTech’s product candidates by the FDA or regulatory authorities in other jurisdictions or the commercialization of BioNTech’s product candidates, or result in higher costs or deprive BioNTech of potential product sales revenue. In addition, BioNTech will rely on third parties to perform release tests on BioNTech’s product candidates prior to delivery to patients. If these tests are not appropriately done and test data are not reliable, patients could be put at risk of serious harm.

BioNTech is dependent on single-source suppliers for some of the components and materials used in, and the processes required to develop, BioNTech’s product candidates.

BioNTech currently depends on single-source suppliers for some of the components and materials used in, and manufacturing processes required to develop, BioNTech’s product candidates. BioNTech cannot ensure that these suppliers or service providers will remain in business, or have sufficient capacity or supply to meet BioNTech’s needs, or that they will not be purchased by one of BioNTech’s competitors or another company that

 

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is not interested in continuing to work with BioNTech. BioNTech’s use of single-source suppliers of raw materials, components, key processes and finished goods exposes BioNTech to several risks, including disruptions in supply, price increases or late deliveries. There are, in general, relatively few alternative sources of supply for substitute components. These vendors may be unable or unwilling to meet BioNTech’s future demands for its clinical trials or commercial sale. Establishing additional or replacement suppliers for these components, materials and processes could take a substantial amount of time and it may be difficult to establish replacement suppliers who meet regulatory requirements. Any disruption in supply from any single-source supplier or service provider could lead to supply delays or interruptions which would damage BioNTech’s business, financial condition, results of operations and prospects.

If BioNTech has to switch to a replacement supplier, the manufacture and delivery of BioNTech’s product candidates could be interrupted for an extended period, which could adversely affect BioNTech’s business. Establishing additional or replacement suppliers for any of the components or processes used in BioNTech’s product candidates, if required, may not be accomplished quickly. If BioNTech is able to find a replacement supplier, the replacement supplier would need to be qualified and may require additional regulatory authority approval, which could result in further delay. While BioNTech seeks to maintain adequate inventory of the single source components and materials used in its products, any interruption or delay in the supply of components or materials, or BioNTech’s inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could impair BioNTech’s ability to meet the demand for its product candidates.

In addition, as part of the FDA’s approval of BioNTech’s product candidates, BioNTech will also require FDA review of the individual components of BioNTech’s process, which include the manufacturing processes and facilities of BioNTech’s single- source suppliers.

BioNTech’s reliance on these suppliers, service providers and manufacturers subjects BioNTech to a number of risks that could harm BioNTech’s reputation, business and financial condition, including, among other things:

 

   

delays to the development timelines for BioNTech’s product candidates;

 

   

interruption of supply resulting from modifications to or discontinuation of a supplier’s operations;

 

   

delays in product shipments resulting from uncorrected defects, reliability issues, or a supplier’s variation in a component;

 

   

a lack of long-term supply arrangements for key components with BioNTech’s suppliers;

 

   

inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms;

 

   

difficulty and cost associated with locating and qualifying alternative suppliers for BioNTech’s components in a timely manner;

 

   

production delays related to the evaluation and testing of components from alternative suppliers, and corresponding regulatory qualifications;

 

   

delay in delivery due to BioNTech’s suppliers’ prioritizing other customer orders over BioNTech;

 

   

damage to BioNTech’s reputation caused by defective components produced by BioNTech’s suppliers; and

 

   

fluctuation in delivery by BioNTech’s suppliers due to changes in demand from BioNTech or their other customers.

If any of these risks materialize, costs could significantly increase and BioNTech’s ability to meet demand for its products could be impacted.

 

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Risks Related to BioNTech’s Intellectual Property

If BioNTech’s efforts to obtain, maintain, protect, defend and/or enforce the intellectual property related to its product candidates and technologies are not adequate, BioNTech may not be able to compete effectively in BioNTech’s market.

BioNTech’s commercial success depends in part on its ability to obtain, maintain, protect, defend and enforce patent and other intellectual property, including trade secret and know-how, protection for BioNTech’s product candidates, proprietary technologies and their uses, as well as BioNTech’s ability to operate, develop, manufacture and commercialize its product candidates without infringing, misappropriating or otherwise violating the intellectual property or other proprietary rights of BioNTech’s competitors or any other third parties, including any non-practicing entities or patent assertion entities. BioNTech generally seeks to protect its intellectual property position by filing and/or licensing patent applications in the United States and abroad related to BioNTech’s product candidates, proprietary technologies (including methods of manufacture) and their uses that are important to BioNTech’s business. BioNTech’s patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless, and until, patents issue from such applications, and then only to the extent that the issued claims cover third parties’ activities in the countries in which they are performed. BioNTech cannot be certain that the claims in any of its patent applications will be considered patentable by the United States Patent and Trademark Office, or the USPTO, courts in the United States or the patent offices and courts in other jurisdictions, including Europe, nor can BioNTech be certain that the claims in its issued patents will not be found invalid or unenforceable if challenged. Accordingly, there can be no assurance that BioNTech’s patent applications or those of BioNTech’s licensors will result in additional patents being issued or that issued patents will adequately cover BioNTech’s product candidates or otherwise afford sufficient protection against competitors with similar technology, nor can there be any assurance that the patents issued will not be infringed, designed around, invalidated or held unenforceable. Furthermore, BioNTech may not be able to apply for patents on certain aspects of its current or future product candidates, proprietary technologies and their uses in a timely fashion, at a reasonable cost, in all jurisdictions, or at all, and any potential patent protection BioNTech obtains may not be sufficient to prevent substantial competition.

Even issued patents may later be found invalid or unenforceable or may be modified or revoked in proceedings before various patent offices or in courts in the United States, Europe or other jurisdictions. The degree of future protection for BioNTech’s intellectual property and other proprietary rights is uncertain. Only limited protection may be available and may not adequately protect BioNTech’s rights or permit BioNTech to gain or keep any competitive advantage. If BioNTech does not adequately obtain, maintain, protect, defend and enforce BioNTech’s intellectual property and proprietary technology, competitors may be able to use BioNTech’s product candidates and proprietary technologies and erode or negate any competitive advantage BioNTech may have, which could have a material adverse effect on BioNTech’s financial condition and results of operations.

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that BioNTech or any of its current or future licensors or collaborators will be successful in prosecuting, obtaining, protecting, maintaining, enforcing or defending patents and patent applications necessary or useful to protect BioNTech’s product candidates, proprietary technologies (including methods of manufacture) and their uses. These risks and uncertainties include, from time to time, the following:

 

   

the USPTO and various other governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application or a finding that a patent is unenforceable, and partial or complete loss of patent rights in the relevant jurisdiction;

 

   

patent applications may not result in any patents being issued;

 

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issued patents that BioNTech owns (solely or jointly) or have in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;

 

   

BioNTech’s competitors, many of whom have substantially greater resources than BioNTech and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate BioNTech’s ability to make, use, sell, import or otherwise exploit BioNTech’s product candidates or other technologies;

 

   

other parties may have designed around BioNTech’s patent claims or developed technologies that may be related or competitive to BioNTech’s product candidates or other technologies, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with BioNTech’s patent filings, either by claiming the same or overlapping methods, products, reagents or devices or by claiming subject matter that could dominate one or more of BioNTech’s patent claims;

 

   

any successful opposition to any patents owned by or in-licensed to BioNTech could deprive BioNTech of rights necessary for the development and exploitation of its product candidates and other technologies or the successful commercialization of any product candidates and other technologies that BioNTech may develop;

 

   

because patent applications in the United States and most other jurisdictions are confidential for a period of time after filing, BioNTech cannot be certain that BioNTech, its co-owners or its licensors were the first to file any patent application related to BioNTech’s product candidates, proprietary technologies and their uses;

 

   

a court or patent office proceeding, such as a derivative action or interference, can be provoked or instituted by a third party or a patent office, and might determine that one or more of the inventions described in BioNTech’s patent filings, or in those BioNTech licensed, was first invented by someone else, so that BioNTech may lose rights to such invention(s);

 

   

a court or other patent proceeding, such as an inter partes review, post grant review or opposition, can be instituted by a third party to challenge the inventorship, scope, validity and/or enforceability of BioNTech’s patent claims and might result in invalidation or revision of one or more of BioNTech’s patent claims, or in a determination that such claims are unenforceable;

 

   

there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and

 

   

countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing competitors a better opportunity to create, develop and market competing product candidates.

The patent position of biopharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of much litigation in recent years. The standards that the USPTO and its counterparts use to grant patents are not always applied predictably or uniformly and can change. Similarly, the ultimate degree of protection that will be afforded to biotechnology inventions, including BioNTech’s, in the United States and other countries, remains uncertain and is dependent upon the scope of the protection decided upon by patent offices, courts and lawmakers. Moreover, there are periodic changes in patent law, as well as discussions in the Congress of the United States and in international jurisdictions about modifying various aspects of patent law. There is no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable in pharmaceutical or biotechnology patents. In certain countries, for example, methods for the medical treatment of humans are not patentable. More generally, the laws of some countries do not protect intellectual property rights to the same extent as U.S. laws, and those countries may lack adequate rules and procedures for granting, maintaining, protecting, defending and enforcing BioNTech’s intellectual property rights.

 

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Furthermore, the patent prosecution process is also expensive and time-consuming, and BioNTech may not be able to file, prosecute, maintain, protect, defend, enforce or license all necessary or desirable patents or patent applications, as applicable, at a reasonable cost or in a timely manner. It is possible that BioNTech will fail to identify patentable aspects of BioNTech’s research and development output in time to obtain patent protection. Although BioNTech enters into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of BioNTech’s research and development output, such as BioNTech’s employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach such agreements and disclose such output before a patent application is filed, thereby jeopardizing BioNTech’s ability to seek patent protection. BioNTech also relies to a certain extent on trade secrets, know-how, and technology, which are not protected by patents, to maintain BioNTech’s competitive position. If any trade secret, know-how or other technology not protected by a patent were to be disclosed to or independently developed by a competitor, BioNTech’s business and financial condition could be materially adversely affected.

The issuance of a patent is not conclusive as to its inventorship, priority date, scope, term, validity or enforceability so that any patents that may issue or that BioNTech may license may be challenged in the courts or patent offices in the United States, Europe and other jurisdictions. Once granted, patents may remain open to a variety of challenges, including opposition, interference, re-examination, post-grant review, inter partes review, nullification or derivation action in court or before patent offices or similar proceedings, and furthermore, may be challenged as a defense in any enforcement action that BioNTech might bring. Such challenges may result in loss of exclusivity or in patent claims being narrowed, terminated, disclaimed, invalidated, assigned to others or held unenforceable, any or all of which could limit BioNTech’s ability to stop others from using or commercializing similar or identical products, or limit the scope and/or term of patent protection of BioNTech’s products and product candidates and/ or eliminate it altogether, thus hindering or removing BioNTech’s ability to limit third parties from making, using or selling products or technologies that are similar or identical to BioNTech’s, and/or reduce or eliminate royalty payments to BioNTech from its licensees. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. Furthermore, BioNTech’s pending and future patent applications may not result in patents being issued which protect BioNTech’s technology or product candidates or which effectively prevent others from commercializing competitive technologies and product candidates. As a result, BioNTech’s intellectual property may not provide BioNTech with sufficient rights to exclude others from commercializing products similar or identical to BioNTech’s.

BioNTech’s ability to enforce its owned and in-licensed patent and other intellectual property rights depends on BioNTech’s ability to detect infringement, misappropriation and other violation of such patents and other intellectual property. It may be difficult to detect infringers, misappropriators and other violators who do not advertise the components or methods that are used in connection with their products and services. Moreover, it may be difficult or impossible to obtain evidence of infringement, misappropriation or other violation in a competitor’s or potential competitor’s product or service, and in some cases BioNTech may not be able to introduce obtained evidence into a proceeding or otherwise utilize it to successfully demonstrate infringement. BioNTech may not prevail in any lawsuits that it initiates and the damages or other remedies awarded if BioNTech were to prevail may not be commercially meaningful.

In addition, proceedings to enforce or defend BioNTech’s owned or in-licensed patents could put BioNTech’s patents at risk of being invalidated, held unenforceable or interpreted narrowly. Such proceedings could also provoke third parties to assert claims against BioNTech, including that some or all of the claims in one or more of BioNTech’s patents are invalid or otherwise unenforceable. Such challenges may result in loss of patent rights, loss of exclusivity, or in patent claims being narrowed, invalidated or held unenforceable, which could limit BioNTech’s ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of BioNTech’s technology and product candidates. If any of BioNTech’s owned or in-licensed patents covering BioNTech’s product candidates or other technologies are narrowed, invalidated or found unenforceable, or if a court found that valid, enforceable patents held by third

 

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parties covered one or more of BioNTech’s product candidates or other technologies, BioNTech’s competitive position could be harmed or BioNTech could be required to incur significant expenses to protect, enforce or defend its rights. If BioNTech initiates lawsuits to protect, defend or enforce BioNTech’s patents, or litigates against third-party claims, such proceedings would be expensive and would divert the attention of BioNTech’s management and technical personnel, even if the eventual outcome is favorable to BioNTech.

The degree of future protection for BioNTech’s intellectual property and other proprietary rights is uncertain, and BioNTech cannot ensure that:

 

   

any of BioNTech’s patents, or any of BioNTech’s pending patent applications, if issued, or those of BioNTech’s licensors, will include claims having a scope sufficient to protect BioNTech’s product candidates and other technologies;

 

   

any of BioNTech’s pending patent applications or those of BioNTech’s licensors may issue as patents;

 

   

others will not or may not be able to make, use, offer to sell or sell products that are the same as or similar to BioNTech’s own but that are not covered by the claims of the patents that BioNTech owns or licenses;

 

   

BioNTech will be able to successfully commercialize its products on a substantial scale, if approved, before the relevant patents that BioNTech owns or licenses expire;

 

   

BioNTech was the first to make the inventions covered by each of the patents and pending patent applications that BioNTech owns or licenses;

 

   

BioNTech, its co-owners or its licensors were the first to file patent applications for these inventions;

 

   

others will not develop similar or alternative products or technologies that do not infringe the patents BioNTech owns or licenses;

 

   

any of the patents BioNTech owns or licenses will be found to ultimately be valid and enforceable;

 

   

any patents issued to BioNTech or its licensors will provide a basis for an exclusive market for BioNTech’s commercially viable product candidates and other technologies or will provide BioNTech with any competitive advantages;

 

   

a third party may not challenge the patents BioNTech owns or licenses and, if challenged, a court would hold that such patents are valid, enforceable and infringed;

 

   

BioNTech may develop or in-license additional proprietary technologies that are patentable;

 

   

the patents of others will not have an adverse effect on BioNTech’s business;

 

   

BioNTech’s competitors do not conduct research and development activities in countries where BioNTech does not have enforceable patent rights and then use the information learned from such activities to develop competitive products for sale in BioNTech’s major commercial markets;

 

   

BioNTech will develop additional proprietary technologies or product candidates that are separately patentable; or

 

   

BioNTech’s development and commercialization activities, including its manufacturing processes, or products will not infringe upon the patents of BioNTech’s competitors or any other third parties, including anynon-practicing entities or patent assertion entities.

Other companies or organizations may challenge BioNTech’s intellectual property rights or may assert intellectual property rights that prevent BioNTech from developing and commercializing BioNTech’s product candidates and other technologies.

BioNTech practices in new and evolving scientific fields, the continued development and potential use of which has resulted in many different patents and patent applications from organizations and individuals seeking

 

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to obtain intellectual property protection in the fields. BioNTech owns and in-licenses patent applications and issued patents that describe and/or claim certain technologies, including products, reagents, formulations and methods including uses and manufacturing methods, or features or aspects of any of these. These issued patents and pending patent applications claim certain compositions of matter and methods relating to the discovery, development, manufacture and commercialization of therapeutic modalities and BioNTech’s delivery technologies, including LNPs. If BioNTech, its co-owners or its licensors are unable to obtain, maintain, protect, defend or enforce patent protection with respect to BioNTech’s product candidates and other technology and any product candidates and technology BioNTech develops, BioNTech’s business, financial condition, results of operations and prospects could be materially harmed.

As the scientific fields mature, BioNTech’s known competitors and other third parties have filed, and will continue to file, patent applications claiming inventions in the field in the United States and abroad. There is uncertainty about which patents will issue, and, if they do, as to when, to whom and with what claims. With respect to both in-licensed and owned intellectual property, BioNTech cannot predict whether the patent applications BioNTech and its licensors are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors.

BioNTech, its co-owners or its licensors may in the future become a party to patent proceedings or priority disputes in the United States, Europe or other jurisdictions. The Leahy-Smith America Invents Act, or the America Invents Act, enacted in September 2011, included a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent through USPTO-administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings. BioNTech expects that its competitors and other third parties will institute litigation and other proceedings, such as interference, reexamination and opposition proceedings, as well as inter partes and post-grant review proceedings against BioNTech and the patents and patent applications that BioNTech owns and in-licenses. BioNTech expect that it will be subject to similar proceedings or priority disputes, including oppositions, in Europe or other foreign jurisdictions relating to patents and patent applications in its portfolio.

If BioNTech, its co-owners or its licensors are unsuccessful in any interference proceedings or other priority or validity disputes, including any derivations, post-grant review, inter partes review or oppositions, to which BioNTech or they are subject, BioNTech may lose valuable intellectual property rights through the narrowing or loss of one or more patents owned or in-licensed, or its owned or in-licensed patent claims may be narrowed, invalidated or held unenforceable. In many cases, the possibility of appeal exists for either BioNTech or its opponents, and it may be years before final, unappealable rulings are made with respect to these patents in certain jurisdictions. The timing and outcome of these and other proceedings is uncertain and may adversely affect BioNTech’s business if BioNTech is not successful in defending the patentability and scope of its pending and issued patent claims. In addition, third parties may attempt to invalidate BioNTech’s intellectual property rights. Even if BioNTech’s rights are not directly challenged, disputes could lead to the weakening of its intellectual property rights. BioNTech’s defense against any attempt by third parties to circumvent or invalidate its intellectual property rights could be costly to BioNTech , could require significant time and attention of BioNTech’s management and could have a material adverse impact on its business and ability to successfully compete against current and future competitors.

There are many issued and pending patent filings that claim aspects of technologies that BioNTech may need for its mRNA product candidates or other product candidates, including patent filings that relate to relevant delivery technologies. There are also many issued patents that claim targeting genes or portions of genes that may be relevant for immunotherapies BioNTech wishes to develop. In addition, there may be issued and pending patent applications that may be asserted against BioNTech in a court proceeding or otherwise based upon the asserting party’s belief that BioNTech may need such patents for the development, manufacturing and commercialization of its product candidates. Thus, it is possible that one or more organizations, ranging from

 

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BioNTech’s competitors to non-practicing entities or patent assertion entities, has or will hold patent rights to which BioNTech may need a license, or hold patent rights which could be asserted against BioNTech. Such licenses may not be available on commercially reasonable terms or at all, or may be non-exclusive. If those organizations refuse to grant BioNTech a license to such patent rights on reasonable terms or a court rules that BioNTech needs such patent rights that have been asserted against BioNTech and BioNTech is not able to obtain a license on reasonable terms or at all, BioNTech may be unable to perform research and development or other activities or market products covered by such patents, and BioNTech may need to cease the development, manufacture and commercialization of one or more of the product candidates BioNTech may develop. Any of the foregoing could result in a material adverse effect on BioNTech’s business, financial condition, results of operations or prospects.

BioNTech may not be successful in obtaining, maintaining, protecting or defending the necessary intellectual property rights to allow it to identify and develop product candidates, product components and manufacturing processes for its development pipeline.

BioNTech currently has rights to certain intellectual property, through its owned and in-licensed patents and other intellectual property rights, relating to identification and development of its product candidates or other technologies. As its pipeline may involve additional product candidates that could require the use of intellectual property and other proprietary rights held by third parties, the growth of its business could depend in part on its ability to acquire, in-license or use such intellectual property and proprietary rights. In addition, its product candidates may require specific formulations to work effectively and efficiently and these intellectual property and other proprietary rights may be held by others. BioNTech may be unable to secure such licenses or otherwise acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that BioNTech identifies as necessary, on reasonable terms, or at all, for product candidates and other technologies that BioNTech may develop. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that BioNTech may consider attractive or necessary. These established companies may have a competitive advantage over BioNTech due to their size, cash resources, and greater clinical development and commercialization capabilities.

For example, BioNTech sometimes collaborates with academic institutions in certain aspects of its preclinical research or development under written agreements with these institutions. Typically, these institutions provide BioNTech with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. However, these institutions may not honor BioNTech’s option and right of first negotiation for intellectual property rights or BioNTech may otherwise be unable to negotiate a license within the specified time frame or under terms that are acceptable to BioNTech. If BioNTech is unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking BioNTech’s ability to pursue its program or otherwise continue to develop certain product candidates or other technologies.

Moreover, some of BioNTech’s owned patents and patent applications are, and may in the future be, co-owned with third parties. If BioNTech is unable to obtain, or continue to maintain, exclusive rights to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including BioNTech’s competitors, and BioNTech’s competitors could market competing products and technologies. In addition, BioNTech may need the cooperation of any such co-owners of BioNTech’s patents in order to enforce such patents against third parties, and such cooperation may not be provided to BioNTech. Any of the foregoing could have a material adverse effect on BioNTech’s competitive position, business, financial conditions, results of operations and prospects.

In addition, third parties that perceive BioNTech to be a competitor may be unwilling to assign or license rights to BioNTech. BioNTech also may be unable to license or acquire third-party intellectual property rights on terms that would allow BioNTech to make an appropriate return on it investment. If BioNTech is unable to successfully obtain rights to required third-party intellectual property rights or maintain, protect, defend or

 

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enforce the existing intellectual property rights BioNTech has, BioNTech may have to abandon the development and commercialization of the relevant program or product candidate, which could have a material adverse effect on its business, financial condition, results of operations and prospects.

The lifespans of BioNTech’s patents may not be sufficient to effectively protect its product candidates, technologies and business.

Patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after its first effective non-provisional filing date, assuming maintenance fees are timely paid after the patent has issued. Most foreign jurisdictions also provide a 20-year nominal patent term, though many require payment of regular, often annual, annuities to maintain pendency of an application or viability of an issued patent. In some jurisdictions, one or more options for extension of a patent term may be available, but even with such extensions, the lifespan of a patent, and the protection it affords, is limited. Even if patents covering BioNTech’s product candidates, proprietary technologies and their uses are obtained, once the patent term has expired, BioNTech may be subject to competition from third parties that can then use the inventions included in such patents to create competing products and technologies. In addition, although upon issuance in the United States a patent’s life can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such candidates are commercialized. If any patents that BioNTech owns or in-licenses expire, BioNTech would not be able to stop others from using or commercializing similar or identical technology and products, and BioNTech’s competitors could market competing products and technology. Any of the foregoing could have a material adverse effect on BioNTech’s competitive position, business, financial conditions, results of operations and prospects.

If BioNTech does not obtain patent term extension and data exclusivity for any product candidates it may develop, its business may be materially harmed.

Depending upon the timing, duration and specifics of any FDA marketing approval of any product candidates BioNTech may develop, one or more of its U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Action of 1984, or Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. However, BioNTech may not be granted an extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than BioNTech requests. If BioNTech is unable to obtain patent term extension or the term of any such extension is less than BioNTech requests, BioNTech’s competitors may obtain approval of competing products following BioNTech’s patent expiration, and BioNTech’s business, financial condition, results of operations and prospects could be materially harmed.

If BioNTech fails to comply with its obligations in the agreements under which it licenses intellectual property rights from third parties or otherwise experience disruptions to its business relationships with its licensors, it could lose license rights that are important to its business.

BioNTech is heavily reliant upon licenses to certain intellectual property and other proprietary rights from third parties that are important or necessary to the development and commercialization of its technology and product candidates, and it expects to enter into similar license agreements in the future. Licensing of intellectual property is important to BioNTech’s business and involves complex legal, business and scientific issues and is

 

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complicated by the rapid pace of scientific discovery in BioNTech’s industry. BioNTech’s licenses may not provide exclusive rights to use such intellectual property and technology in all relevant fields of use and in all territories in which it may wish to develop or commercialize its technology and products in the future. As a result, it may not be able to prevent competitors from developing and commercializing competitive products in territories included in any or all of its licenses.

Where BioNTech obtains licenses from, or collaborates with, third parties, in some circumstances it may not have the right to control the preparation, filing, prosecution, maintenance, enforcement and defense of patents and patent applications covering the technology that it licenses from third parties, or such activities, if controlled by BioNTech, may require the input of such third parties. In some cases, patent prosecution of BioNTech’s in-licensed intellectual property is controlled solely by the licensor. BioNTech may also require the cooperation of its licensors and collaborators to enforce or defend any in-licensed patent rights, and such cooperation may not be provided. Therefore, BioNTech cannot be certain that these patents and patent applications will be prepared, filed, prosecuted, maintained, protected, enforced or defended in a manner consistent with the best interests of its business. Any patents or patent applications that BioNTech in-licenses may be challenged, narrowed, circumvented, invalidated or held unenforceable, or BioNTech’s licensors may not properly maintain such patents or patent applications and they may expire. If BioNTech’s licensors fail to obtain, maintain, defend, protect or enforce the intellectual property BioNTech licenses from them, BioNTech could lose its rights to the intellectual property and its competitors could market competing products using the inventions in such intellectual property. In certain cases, BioNTech controls the prosecution of patents included from in-licensed technology. In the event BioNTech breaches any of its obligations related to such prosecution, it may incur significant liability to its collaborators. Any of the foregoing could have a material adverse effect on BioNTech’s competitive position, business, financial conditions, results of operations and prospects.

Moreover, any failure to satisfy obligations or any material breach under any of BioNTech’s licenses to third-party intellectual property could give the licensor the right to terminate the license. BioNTech’s existing license agreements impose, and BioNTech expects that future license agreements will impose, various diligence, milestone and royalty payment, exclusivity and other obligations on BioNTech. If BioNTech fails to comply with its obligations under these agreements, or BioNTech is subject to a bankruptcy, the licensor may have the right to terminate the license agreement, in which event BioNTech would not be able to develop, market and commercialize product candidates covered by the license agreement. In spite of its best efforts and even if it disagrees, BioNTech’s licensors might still conclude that BioNTech has materially breached its license agreements and might therefore terminate the license agreements, thereby removing BioNTech’s ability to develop and commercialize the product candidates covered by these license agreements. In the event that any of BioNTech’s license agreements were to be