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BioNTech warns of write-off of up to 900 million euros on COVID vaccine
Global Banking & Finance Review®
Company
By Ludwig Burger
BERLIN (Reuters) – Shares in Germany’s BioNTech fell on Monday after it flagged write-downs of up to 900 million euros ($947 million) reflecting similar charges its partner Pfizer announced on their COVID-19 vaccine business last week.
Hit by a plunge in use of pandemic-related products, Pfizer on Friday said it would take $900 million in write-offs and other charges for their jointly developed Comirnaty vaccine, on top of much larger write-offs on Pfizer’s own COVID treatment Paxlovid.
For its third-quarter accounts, BioNTech will likely “recognise the effect of Pfizer’s inventory write-offs and other charges related to Comirnaty in the third quarter of 2023 up to 0.9 billion euros, which represents BioNTech’s half of the gross profit-sharing agreement with Pfizer,” it said in a statement.
Shares in the vaccine maker, which is also developing cancer treatments, were down 7% to a two-month low in Frankfurt as of 0756 GMT.
BioNTech, which relies on vaccine-related profit-sharing payments from its U.S. partner for much of its revenue, said the write-offs would also reduce its 2023 revenue.
A BioNTech spokesperson on Monday declined to comment on the company’s current 2023 outlook, which is for COVID-19 vaccine revenue of about 5 billion euros.
The company is scheduled to release detailed third-quarter figures on Nov. 6.
The company added that it had been told by Pfizer that most of the write-offs relate to raw materials, as well as to inventories of vaccine versions that are older than the upgraded one currently in use.
($1 = 0.9498 euros)
(Reporting by Ludwig Burger and Rachel More; editing by Miranda Murray and Jason Neely)
A write-off is an accounting term that refers to the reduction of the value of an asset or the recognition that an asset is no longer recoverable. It often occurs when a company acknowledges that a debt is uncollectible.
Revenue is the total amount of money generated by the sale of goods or services before any expenses are deducted. It is a key indicator of a company's financial performance.
A financial write-down is an accounting adjustment that reduces the book value of an asset. This typically occurs when the asset's market value has fallen below its carrying value.
A profit-sharing agreement is a financial arrangement where profits are distributed among partners or stakeholders based on a predetermined formula. This is common in joint ventures and partnerships.
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