Why the Corona Crisis is an Opportunity for Proptechs

Cologne Successfully completing a round of financing seems increasingly difficult for start-ups in times of the corona crisis. Investors are holding back. Nevertheless, Kiwi, provider of digital locking systems, has ten million euros from its shareholders such as Arbonia and German living collected. Kiwi wants to use the money to grow and develop new products.

Like many other start-up scenes, the proptech industry is suffering from postponed financing rounds – liquidity is a critical issue for start-ups even without a crisis. But if one of the lessons from the shutdown is to digitize more in the future, this could give Proptech a new impetus.

The growing proptech scene shows how many founders see potential in the digital real estate industry, as startups in the real estate industry are called. In German-speaking countries, the investment company Blackprintpartners will have around 750 Proptechs in 2020, 72 more than in 2018.

Now they are facing a test: “Most proptechs are still in the early phase and burn money, they live from one round of financing to another,” explains Christian Schulz-Wulkow. The head of the real estate sector for Germany, Switzerland and Austria at the consulting firm EY is skeptical about the short-term development: “Corona will massively delay sales and new projects if they are not even at risk – but the costs for Proptechs will continue. Typical sales channels such as trade fairs and conferences are eliminated. ”

Schulz-Wulkow said that investors who invest in Proptechs would have other problems anyway. You would ask yourself: “Which of our investments should we write off? Which make losses, and which do we finance through? ”The upcoming consolidation process could therefore accelerate. Despite the pressure, there are Proptech segments that are benefiting from the crisis.

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Digital transaction

Schulz-Wulkow describes proptechs who help people work more independently of locations as crisis winners: “After all, the world saw it, it has to and it can be worked from the home office.”
There is a lot of talk about digital solutions in real estate transactions.

A start-up that starts here is 21st Real Estate. With tools developed in-house, Proptech analyzes and evaluates locations, properties and portfolios. They also use digital help to forecast the development of rental and purchase prices.

Right now, smart data is an important basis for reliable, objective assessments and thus for risk minimization, says Nicolai Wendland, co-founder and IT manager, CIO, of 21st Real Estate. Hypothekenbank Berlin Hyp, which already started in 2018 as a strategic investor, is relying on its solution.

Document managers like Evana or Architrave could also benefit from the crisis. Both Proptechs offer the digitization of analog documents such as purchase and rental contracts, which are then organized and managed by artificial intelligence.

New access systems

Providers of digital access systems such as Kiwi are also hoping to gain momentum. The situation is similar at Nexenio. Among other things, Proptech offers interaction-free access control. Whether access to a building or part of a building is granted depends on two factors.

On the one hand, the user must have a device released for identification with them. Based on the sensors built into the smartphone, the software recognizes the typical movement pattern of the user, the second factor. So if someone wants to use another user’s smartphone as access, they will be denied access because they do not have the same movement pattern.

At the moment, the corona crisis is also restricting Nexenio, admits Christian Kregelin, who is responsible for business development at Proptech. So far, there have been no failures in the delivery of their system, but there have been delays of three to five months: “Since many offices have been closed, we cannot now implement our system on site.” In the long term, however, a positive development could follow: Nexenio is increasing the number of requests where its system should replace previous technology that works with fingerprints.

Communication systems

Communication between tenants and landlords could also increasingly shift to digital. The Proptech Animus has developed an app that allows residents of a district to communicate with each other, send complaints to the landlord or the caretaker, but also book package and laundry services.

The app, which is normally adapted to the wishes of the respective real estate operator, now offers Animus as an emergency solution, a less strongly individualized app. This is intended to facilitate neighborhood help, for example shopping for the elderly and risk groups, explains Carolin Ehrensberger from Animus.

Stefan Zanetti, founder of the Swiss start-up Allthings, also reports increased demand for his app: orders in April are three to four times higher than before. A marketing gimmick certainly helped: The Swiss temporarily provide interested customers with a light version of their app free of charge.

Corona may make some rounds of financing more difficult. The holding company Blackprintpartners, however, is optimistic: The changes provoked by the pandemic could give digitalization a decisive boost. Retained capital will be released after the crisis.

More: Financial investment – real estate crowdinvesting under scrutiny.

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Despite huge aid, economists do not anticipate inflation for the time being

inflation

Economists do not expect prices to rise in a timely manner.

(Photo: dpa)

Munich Regardless of gigantic government spending, economists do not anticipate a surge in inflation in the Corona crisis for the time being – on the contrary, falling prices. A key factor in this is the drop in oil prices, according to several economists.

“In view of the severity of the current recession and against the background of the extremely sharp drop in oil prices, consumer price inflation should be significantly lower on average in 2020 than in the previous year,” says Michael Menhart, chief economist at the world’s largest reinsurer Munich Re. “I suspect that the corona crisis will lead to deflation,” says Markus Demary, Senior Economist for Monetary Policy and Financial Markets at the Cologne Institute for Economic Research.

“In the short term, the Covid 19 crisis is likely to have a deflationary effect,” says Katharina Utermöhl, Senior Economist responsible for Europe alliance. Europe’s leading insurer expects an extremely low price increase of 0.2 percent for 2020 in the euro area, and an inflation rate of 1.6 percent for 2021. BayernLB chief economist Jürgen Michels shares his colleagues’ assessments: “In the short term, I can clearly see that the pressure on prices is going down – also because of the oil price trend.”

Not only the governments, but also the companies will be sitting on mountains of debt after the crisis. “This debt has to be reduced and the debt reduction has priority over new investments for a certain time,” says IW money market specialist Demary. “Due to the reluctance to invest, demand is lacking, causing price growth to stagnate.”

Two of several other factors that Demary names: risk aversion and presumably subdued demand for the end of the pandemic. “Companies and households are more likely not to invest, but to wait and see that the uncertainty falls.”

Mountains of debt become the sticking point

And what about the end of the crisis? That depends on the extent and pace of the subsequent recovery, as Munich Re chief economist Menhart says – “although we are currently not assuming a fundamental change in the inflation outlook and therefore expect inflation rates to be roughly pre-crisis levels.”

However, like lawyers, economists analyze a variety of factors in their assessments. Some of these factors could well lead to a return in inflation. “But as soon as the crisis is over, dealing with the accumulated mountains of debt could turn out to be a sticking point,” says Allianz economist Utermöhl.

Experience from the financial crisis had shown that the resulting debt has not been reduced in many countries. “On the contrary: global debt has reached a new record high in 2019,” says the economist. “Since there will hardly be any productivity boost in the near future, I assume that the second path will ultimately be taken” – ie inflation.

Munich Re chief economist Menhart points to another point: “However, there are risks of higher inflation especially if, with normalizing economic demand, companies are unable to restart production sufficiently quickly.”

BayernLB chief economist Michels also believes that inflation can return. “In the medium term, I see a certain risk that inflation could go up, but only when we are economically back to the level we had before the crisis.” According to Michel’s assessment, this could only be the case in 2022/23.

“We noticed in the Corona crisis that we had too few reserves for many things,” says the Munich economist. “If we have a higher level of storage again, it costs money. And if you can no longer rely on international supply chains, production may be more local, but more expensive. These two factors could drive prices up. ”

More: Fluctuations on the stock exchanges are extreme due to the Covid 19 pandemic. But there is a way out: alternative investments. The Handelsblatt presents them.

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The situation with chip manufacturers is so different

Munich It is a prognosis that many other industries in the corona crisis would be happy about: The sales of the semiconductor industry will decrease by 0.9 percent this year, the market researchers from Gartner predict. However, it is a bitter disappointment for chip manufacturers. In December, Gartner finally announced an increase of 12.5 percent for 2020. That would have been a relief because the business slumped more than a tenth last year.

After the plague has shut down the whole world in the past few weeks, nothing is as it was in the chip industry either. The hoped-for upswing will initially fail. However, there is no clear picture. Some manufacturers are still doing brilliant business these days, while others are already experiencing the recession.

This is not least due to the customers of the producers, who are affected in very different ways. If market researchers are right, the industry will drift apart in the next few months. And not every company will be able to maintain the momentum of the past few weeks.

This is well shown by the world market leader Intel: The Californians grew by leaps and bounds in the first quarter. Sales skyrocketed by almost a fifth to almost $ 20 billion. Intel delivers processors – the brains of every computer. Because data traffic is growing rapidly during the crisis, data center operators are buying new network computers en masse. The server division’s revenues therefore climbed by more than 40 percent in the first three months of the year.

But Intel’s PC business also grew by 14 percent. This is an area that has struggled for years. Around the world, however, workers are currently getting notebooks for home work – this ensures a full order book.

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The upward trend could continue into the second half of the year, underlined CEO Bob Swan. Nevertheless, he is not euphoric: “At some point, the effects of the recession will hit us.” Therefore, he did not want to make a forecast for the current year.

Meanwhile, McKinsey’s semiconductor experts expect global chip sales to fall between 5 and 15 percent this year. So you’re much more pessimistic than Gartner. How bad it really gets depends on whether the economy picks up again towards the end of the year or not.

Intel and its biggest rivals in the computer manufacturing business, AMD and NvidiaAccording to McKinsey, the lull is less affected. Companies around the world would cut budgets for new PCs. This would be partially offset as consumers increasingly buy new notebooks and tablets. More money will also flow into new network computers this year. Last but not least, the servers are needed for the many video conferences that take place during the pandemic.

The big losers in the industry

According to the McKinsey specialists, the biggest losers in the chip industry this year are the providers of cell phone chips, companies like Qualcomm or Broadcom. Sales of these components could decrease by up to a quarter because people bought fewer smartphones during the crisis – and if they resorted to new models, then to cheaper ones. This was already evident in China at the beginning of the year, McKinsey said.

The corporations that do a lot of business with car manufacturers are also likely to suffer. McKinsey estimates that vehicle chip revenues would drop between 10 and 27 percent. This is painful for European semiconductor manufacturers like the Dax group Infineon or NXP from the Netherlands, which generate a large part of the turnover with the car industry. Due to the long lead times of the customers, however, the decline could only be felt in the numbers of chip companies towards the end of the second quarter.

In addition to Intel, a number of the leading chip manufacturers have already released the quarterly figures. The results were mixed. Texas Instruments benefit from the fact that customers have filled the warehouse in recent weeks, the group said this week.

Nevertheless, sales in the first quarter had shrunk by seven percent to $ 3.33 billion. By contrast, the profit remained almost constant at just under $ 1.2 billion. CEO Rich Templeton announced that the company would keep its factories open and also keep research and development going. The shareholders would also receive their dividends, and even the share buyback would continue.

From May onwards, Texas Instruments will probably feel the pandemic more strongly because the customers will then have sufficient supplies. “Many customers are still sorting,” said CFO Officer Rafael Lizardi this week. How things will continue in the second and third quarters is still completely open.

Europe’s largest chip maker ST Microelectronics grew in the first quarter, but expects a decline in sales as a result of the collapse in demand in the auto industry due to corona virus. In the second quarter, a decrease of around ten percent is expected, the company said. In the first quarter, STM achieved an increase in sales of 7.5 percent due to increasing sales. However, that is five percentage points less than company boss Jean-Marc Chery had promised at the beginning of the year.

The auto industry cancels orders

The auto industry in particular cut orders, Chery said. Due to the requirements of the authorities, it is also challenging to keep the factories and the supply chain running. All factories of the Italian-French group are in operation; sometimes with less capacity, which leads to vacancy costs.

“We expect growth in the second half of the year,” said Chery. On the one hand, there are already customer commitments, on the other hand, the difficulties in the supply chain are likely to disappear. Given the difficulties, ST now plans to invest a maximum of $ 1.2 billion, which is 300 million less than initially planned.

The world’s largest cell phone chip maker, Broadcom, recently warned of massive delivery problems. Customers should order at least six months in advance, the group said. Due to the restrictions of daily life in Malaysia, Thailand, Singapore and the Philippines, the processes are severely disrupted. The lead time is usually only two or three months. Among other things, Broadcom supplies the iPhone manufacturer Apple.

The latest statements by proof that the industry believes in growth at least in the long term ASML. The Dutch said that demand was good even during the crisis. ASML is one of the most important suppliers to the industry and the Group’s machines are one of the largest items in the investment budgets of the chip companies.

More: Which chip manufacturers benefit from the corona crisis – and which suffer.

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Cyber ​​criminals are taking advantage of the corona pandemic

Cyber ​​police

The Federal Office for Information Security also warned of an increase in cybercrime.


(Photo: dpa)

Munich According to a study by experts, cybercriminals are increasingly using the corona crisis for fraud. Since the beginning of the year, tens of thousands of problematic websites related to the pandemic have been registered, according to an investigation by the cyber security company Palo Alto Networks.

Overall, the experts identified 116,357 new domain names in connection with Corona from January 1 to March 31. Of these, 2022 were classified as “malicious”, another 40,261 as “risky”.

The company’s 42 team for threat detection identified various campaigns: There were phishing attacks via emails with links to fake sites that were supposed to skim off access data or so-called skimmers that were supposed to tap credit card information. In addition, sites also tried directly to infect users’ computers.

The experts also found fraudulent web shops that apparently offered particularly popular items such as face masks or disinfectants very cheaply. In this context, Palo Alto Networks warns of offers that are “too good to be true”. Other problematic issues included illegal pharmacies or attempts to scare customers and urge them to buy Corona-related e-books or other products.

The Federal Office for Information Security and the European police authority Europol have also warned of an increase in cyber crime in the corona crisis. North Rhine-Westphalia recently even had to temporarily stop its emergency aid program for companies after fraud attempts with fake websites had become known.

More: Cyber ​​criminals and intelligence agencies are taking advantage of the pandemic.

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Car makers are becoming even more dependent on China

Nobody can yet estimate the damage caused by the corona crisis. The VW group is already calling for purchase premiums for new cars, flanked by unions and those prime ministers who are concerned about the well-being of the key industry in their country. Those who are in short-time work and fear for their job will probably not buy a car for the time being.

The loss of production and sales weighs heavily. Now the corporations face a second problem. There are billions of leasing and loan contracts on the balance sheets of the German auto industry, which come under pressure as the crisis grows. Daimler alone had to spend 400 million euros in risk provisioning for the possibly bursting financing this quarter. If things go badly, then we see the tip of an iceberg here.

Almost every second car that automakers sell is financed, mostly by the company’s own banks. This makes the auto industry a key component of the global debt economy, especially in the United States. Nowhere else is more pumped up than in the country of seemingly unlimited credit options.

Americans don’t save on a car, they sign a lease that is paid at the end of the month from current income. Unlike in Europe, manufacturers generally also assume the residual value risk if the car is resold at the end of the lease term.

In the past ten years, thanks to low interest rates, this has been good business. The car companies financed a car for the consumer and enjoyed a well-calculated cash flow each month. For many customers, a small car became an SUV. So not only ford, Toyota and GM increased their sales but also Daimler, BMW and the VW group.

Faster crash than in the financial crisis

At the end of 2019, the credit volume for car purchases rose to $ 1.3 trillion, which is the same as before the financial crisis in 2008. But as long as the labor market worked and borrowers and lessees were able to stutter their rates, things turned this wheel faster and faster. This is now over for many people. Since the outbreak of the corona crisis, 26 million Americans have registered as unemployed – a faster and deeper crash than in the financial crisis a decade ago.

If these people don’t find work again soon, the auto industry will be hit twice. In addition to the broken credit agreements, the automakers then remain on the used cars, which their customers are placing in ever increasing numbers on the yard. At BMW, the memories of the last burst bubble are still painful. In the financial crisis, the group had to write down around two billion euros on loan defaults and lease returns on the US market. How carefully the corporations calculated this time is open.

While the credit-financed US market threatens to collapse like a house of cards, China shines all the brighter. The giant empire has replaced the USA as the world’s largest sales market in the past ten years. The fact that the corona crisis is over for the time being in the Far East is making some car managers sleep better. The Chinese market has already almost reached the old level again. And unlike most Americans, the Chinese largely pay for their cars in cash.

If the credit bubble bursts in the United States, the market there will remain on the ground for a long time. This does not apply to China. In the shutdown of the past few weeks, the German auto industry has continued to run its component factories in Germany in order to supply parts to the factories in China. When VW, Daimler and BMW build cars again in their German factories, some of them go straight to the Far East.

And the US factories of the Germans are also supposed to start producing again because the mass of the off-road vehicles built there is shipped straight to Shanghai and Beijing.

Crises shift forces. Even before Corona, business in China was very lucrative for the auto industry, also because foreign automakers are increasingly relieved of the obligation to work in joint ventures with a Chinese partner.

With BMW, the majority takeover has already been approved for the first car company. Daimler and the VW group want to follow suit today rather than tomorrow and increase their production in the Far East. That will now accelerate. The industry will mainly collect car keys on the US market in the coming months, but cash in China.

More: Daimler suffers a sharp drop in profits due to the corona crisis.

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Unemployment in Italy and the USA increases dramatically

Closed business in the United States

Since the start of the corona crisis, over 26 million US workers have registered as unemployed.

(Photo: AP)

Rome, Washington Not only in Germany, but also in the United States and Italy, the dramatic consequences of corona-related restrictions on the labor market are becoming increasingly important. The United States saw another surge in unemployment claims last week.

According to figures released by the U.S. Department of Labor on Thursday, between April 11 and April 18, 4.4 million citizens applied for unemployment benefits. That is slightly less than the previous week, when 5.2 million applications were received. Overall, however, the historic downturn in the US labor market continues.

Until the start of the corona lockdown in mid-March, the US was practically fully employed. Since then, 26.5 million US workers have registered as unemployed. That corresponds to about ten percent of all workers there.

The unemployment rate for April, which will only be released in the United States on May 8, is estimated by experts to be around 15 percent. The Oxford Economics research institute calculates that the corona pandemic in the United States will lose a total of just under 28 million jobs. For comparison: The recession after the financial crisis in 2008 only destroyed about nine million jobs in the United States.

Registration for unemployment benefits in the United States is also likely to be particularly high because the US government has expanded claims to support in response to the corona shock.

American unemployed people now receive a fixed flat-rate payment of $ 600 a week from the federal budget, in addition to the unemployment benefit of a few hundred dollars a month, which varies from state to state.

For some low-skilled workers, government support is higher than their previous salary. For the first time, solo self-employed persons from the so-called gig economy are entitled to unemployment benefits.

This means that more redundant workers than before have an incentive to actually register as unemployed. However, those who quit on their own initiative or fly out due to their behavior generally have no claim to unemployment benefits in the United States.

Situation in Italy

In Italy, fear of corona-related unemployment is now almost as great as that of the virus itself. According to a survey conducted by the Tecnè research institute on Tuesday, 54 percent of Italians are afraid of losing their jobs, including civil servants . Meanwhile, 62 percent of the population fear the corona virus.

In Italy, not only is the number of corona deaths still highest in Europe, the economic consequences of the crisis are also the most dramatic. With only a few exceptions, production in the country already stops in the fifth week. There will only be easing from May 4. The International Monetary Fund therefore expects Italian economic output to decline by 9.1 percent in 2020.

In its “Global Outlook” for Italy, the rating agency Fitch estimates that the unemployment rate, which was ten percent in 2019, will rise to 12.1 percent this year and will only decrease slightly to 11.8 percent by the end of 2021.

The Italian statistics office Istat only published the unemployment rate for February at the beginning of April, a decrease to 9.7 percent was reported. But that was before the escalation of the Corona pandemic in Italy. It is only at the beginning of May that the March figures will show the true extent of the corona crisis on the labor market.

More: How are different countries and systems doing in the corona crisis? While European countries are at the top, China and the USA are lagging behind.

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Corona and public transport: billion-dollar revenue loss threatens

Employee cleans the passenger area of ​​a BVG bus in Berlin

For weeks, buses and trains have been largely empty around the area.


(Photo: dpa)

Dusseldorf The urban and rural transport companies are sounding the alarm. Buses and trains have been largely empty around the area for weeks, the loss of revenue is in the billions. According to the VDV industry association, 90 percent of passengers are missing in rural areas, and 60 to 80 percent in cities.

“An unprecedented situation for the industry,” said VDV general manager Oliver Wolff. “At the same time, as systemically relevant and public mobility providers, we are asked to maintain a basic offer and the general interest for the population.”

Most municipal transport companies, however, currently drive around 75 percent of their regular offer, because politicians want it that way. In the long run, this cannot be maintained, says Wolff. Because the companies have no reserves.

Together with the companies, the association worked out how big the deficit could be for the industry. For March and April, the VDV estimates the failure to be one billion euros per month. Should public transport slowly get going again after the summer holidays, the failures would add up to around five billion euros.

If the shutdown lasts until the end of May, which also means that subscription customers were lost, there would be a shortfall of up to seven billion euros by the end of the year. According to the association, if buses and trains, which normally transport eleven billion passengers in local transport every year, are to maintain the general public, there must be a “rescue umbrella for buses and trains”.

Association proposes financing concept

“Otherwise, the bus and train offer would have to be cut soon in view of the lack of funds, even though we have to drive more in view of the upcoming school and business openings,” warns VDV general manager Wolff.

The companies expect existing government grants to be increased. Local public transport has to be subsidized anyway because it is not profitable to drive.

The VDV proposes a financing concept that also complies with the EU Commission’s state aid guidelines. According to this, the monthly fare receipts for 2019 should be used as a yardstick for the aid package – less costs to be cut, for example because bus lines have been completely discontinued.

More: Municipalities consider free local transport to be unaffordable.

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Corona crisis reveals deficits in German asset managers

Frankfurt skyline

Asset managers face severe losses from the consequences of the corona crisis.


(Photo: Reuters)

Frankfurt In the past decade, the framework conditions for asset management have been downright paradisiacal. In the “Goldilocks” scenario – where the conditions are fairytale-like – the stock markets hurried to new records, wealth continued to grow, and interest rates close to zero fueled the boom. With the corona pandemic, the brakes came on.

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Finding the Corona vaccine is a race against time

Frankfurt Without broad immunization of the population against the causative agent of Covid 19 disease, there will be no return to normal. This conviction is becoming increasingly popular both among virologists and in politics.

The development of a vaccine is thus the linchpin in the fight against the corona crisis. In the opinion of the American infection specialist Mark Denison, a kind of “Manhattan” project, as was once the case with the development of the American atomic bomb, is ultimately necessary to clean up the threat from Sars-CoV-2 and possible other corona viruses – a large-scale, concerted research project.

No such centrally controlled initiative is in sight. Vaccine development is now in full swing. After all, more than 80 vaccine projects have already been initiated worldwide. More than a dozen product candidates are likely to go into clinical trials this year or have already started. This increases confidence among many observers that the first vaccines may be available in 2021.

Mainz-based Biontech and its US partner Pfizerwho have now received approval for the first clinical tests are moving alongside competitors such as the US companies Moderna and Inovio as well as two Chinese companies – at the forefront in the fight against Covid-19.

According to experts, the largest possible number of projects is urgently required in view of the great need for vaccines and the many imponderables. “Nobody can say at the moment which type of vaccine will be the most successful and which technology will lead to approval fastest,” says Rolf Hömke, research spokesman for the pharmaceutical association VFA.

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According to previous experience, new vaccine developments sometimes take decades. The approval for an Ebola vaccine four years after the start of research is already very quick. There is therefore no shortage of skeptical voices warning of excessive expectations regarding vaccine development.

Severin Schwan, the boss of the Swiss pharmaceutical giant Roche For example, it sees a likely scenario that no vaccine should be available before the end of 2021. And Geoffrey Porges, pharma expert at investment bank SVB Leering, even estimates that it will be possible to launch a mass-market vaccine in two to three years at the earliest. And even after that, it would still take years to generate herd immunity with a vaccination campaign.

The biotech companies Moderna and Biontech, on the other hand, are demonstrating much greater confidence. Both rely on a completely new vaccine technology based on messenger nucleic acids, the so-called messenger RNA (mRNA).

Technology is at an early stage

The basis for this is the function of RNA as an intermediate link between genes and proteins. In principle, mRNA can be used to reprogram body cells to produce certain proteins. The RNA specialists are trying to use this effect to develop both medicines and vaccines. The key challenge is to prepare the artificially produced mRNA so that it cannot be rejected by the immune system before it works in the cells.

The technology is still relatively early in development. So far, there is no approval for drugs or vaccines made from mRNA. Work on Covid-19 vaccines, however, offers companies an opportunity to help their technology break through in a particularly important field. This has also given the RNA pioneers a boost on the capital market.

No one can say at the moment which type of vaccine will be the most successful. Rolf Hömke, research spokesman VFA

Moderna is now valued at around $ 16 billion. Biontech weighs in at just under eleven billion dollars after the price rose by around twelve percent on Tuesday. The Mainz-based company, which is still half owned by the Strüngmann family, is the highest-rated German biotech company.

Biontech went to the US technology exchange Nasdaq last fall with an initial valuation of just under $ 4 billion. A listing in Germany was considered hopeless at the time.

Faster and cheaper

Compared to conventional vaccines, which are based on killed or modified viruses as well as fragments of viruses, the method offers the advantage that product candidates can be generated much faster. On the other hand, the development can theoretically be expanded faster and cheaper if successful.

The first Moderna product candidate entered clinical tests in March. Biontech is now following with four product candidates, which are initially to be tested in parallel on around 200 patients. In a second stage of the tests, Biontech and Pfizer want to add 500 further probants to the study, including older and particularly vulnerable people. Further clinical trials are planned in the United States and China, where Biontech is cooperating with the Chinese pharmaceutical manufacturer Fosun.

The Mainz-based company specializes in cancer therapy and has already clinically tested mRNA products as therapeutic vaccines in more than 400 patients in this area. Like its US competitor, Biontech therefore already has clinical experience with this type of active ingredient.

Company boss and founder Ugur Sahin is accordingly confident that even in the fight against Covid-19, strong immune reactions can be stimulated with mRNA vaccines.

Biontech and Pfizer start testing possible corona vaccine

Biontech is testing the four product candidates in doses between one and 100 micrograms – indirectly signaling that it is hoped that very low doses will produce strong protective effects. This quality is relatively important in view of the capacity expansion for the production of large quantities of vaccines. The lower the dosage, the cheaper and faster it will be to produce large quantities of vaccine for mass use.

Compared to the US competitor Moderna, which is testing its product candidates in doses of 25 to 250 micrograms, this indicates a certain technical advantage for the Mainz company. However, clinical studies in the next few months are unlikely to show whether this is confirmed.

Regardless, Pfizer and Biontech have announced plans to build capacity for “millions of vaccine doses” for the European and American markets by the end of the year. For 2021, “rapid expansion of the capacity to manufacture hundreds of millions of cans” is targeted. Production is to take place in both Biontech and Pfizer plants.

The two companies back their ambitions with high investments. To this end, Pfizer will initially pay $ 185 million to Biontech as part of the alliance, of which $ 72 million in advance and 113 million euros in the form of a capital participation. Depending on certain development successes, the Mainz biotech company is also entitled to further payments of up to 563 million euros.

The corona alliance of the two companies is one of the largest deals in the field to date. Biontech has also entered into a similar alliance with Pfizer with the Chinese company Fosun.

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Similar to Biontech, that of SAPFounder Dietmar Hopp financed Curevac in Tübingen on an RNA-based vaccine. The start of clinical trials is planned for early summer here. The Belgian RNA research company Etheris meanwhile plans to go into clinical tests later this year with an RNA vaccine administered as a nasal spray.

In addition to the projects of the RNA specialists, several products based on established vaccine technologies have already started the clinical tests. Similar to the medication sector, these are candidates for whom certain development steps had already taken place before the new corona virus even appeared.

In particular, this includes vaccine projects against Sars and Mers infections, which are also caused by coronaviruses. Typical examples of this are the projects of Oxford University and the German Center for Infection Research. The US group Johnson & Johnson focuses on experience in developing an Ebola vaccine with his major project.

Viral vectors

These vaccines are mainly based on so-called viral vectors, i.e. modified viruses that carry individual components of the Covid-19 pathogen. The challenge for these products is, among other things, that the production is more complex than for RNA products. Because the viruses first have to be propagated in cell cultures. The same applies to protein-based vaccines that are generated using genetically modified microorganisms.

The target for the vaccines, including the products from Moderna and Biontech, is practically the same target, the so-called spike protein on the shell of the coronavirus. The approximately 100 protein bumps on the surface of the pathogen give it its typical appearance and are considered crucial for its ability to penetrate cells.

Specifically, almost all vaccine projects aim to prophylactically activate the immune defense against these spike proteins and thus prevent viruses from entering the cells and multiplying.

More: New technologies are stirring up the vaccine market

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Record quarter for Netflix – Europe is the largest growth market

San Francisco Also at Netflix has messed up the global corona pandemic a lot: “We are struggling to maintain our service and further organize the post-production of our content,” said Reed Hastings, head of the world’s largest paid streaming service. The Netflix founder even made the presentation of the business figures for the first quarter this time from a bedroom in his apartment building, with blue bed linen in the background.

The fact that Netflix reached the record number of 15.8 million new subscribers worldwide in just three months is of course primarily due to the global curfews and the lack of alternatives at a time when visits to the cinema, concerts and bars are prohibited in many places are. Despite these circumstances, analysts had only expected an average of seven million subscribers.

With the documentary “Tiger King” about an eccentric zoo owner and the dating show “Love is Blind”, Netflix also managed to launch two highly regarded shows. “Our small contribution in this difficult time is to make the house arrest a little more bearable,” said Hastings.

The company from Los Gatos in Silicon Valley now has a total of 182.9 million paying customers worldwide. Even in the United States, where every second household already had a Netflix account, the service grew from around 67.5 to almost 70 million customers.

For several quarters, however, the most important growth drivers for Netflix have been Europe and the Middle East: the streaming service gained almost seven million new customers in the region, which is gradually catching up with Netflix’s home market with a total of 58.7 million.

Although revenue per user decreased slightly in all markets, Netflix increased revenue nearly 28 percent year-over-year to $ 5.77 billion in the quarter, and operating profit grew 17 percent to $ 958 million.

Even the Achilles’ heel of the Netflix balance sheet was no longer the most recent: The company’s cash flow, still $ -1.67 billion in the final quarter of 2019, was slightly positive at $ 162 million between January and March.

Even prepared for a recession

For years, Netflix has been spending more than it takes to produce its own series and films that are believed to be amortized over years. The company therefore has debts of $ 14.1 billion that it has to service with relatively high interest rates of more than six percent.

CFO Spencer Neumann announced that cash flow will still be negative in the full year 2020, but instead of the planned 2.5 billion, it will only be less than one billion dollars – also because the film productions canceled due to Corona save money.

Netflix is ​​less affected than its competitors by the risk of contagion because of the risk of infection, said content manager Ted Sarandos. “We plan well in advance because we publish entire seasons at once.”

Until well into 2021, the planned films and series were largely in the box, and the post-production that was still necessary had been switched to the home office within days. That’s why there are no considerations to postpone Corona start dates so that the existing new releases last longer, said Sarandos.

“Netflix is ​​much more responsive to this new reality than competitors who rely on movie releases, theme parks, or sporting events,” said eMarketer analyst Eric Haggstrom.

The fact that company boss Hastings has kept the service ad-free now helps, because the implosion of advertising expenditure bypasses Netflix. The company sees itself prepared for a global recession: “People tend to stay at home during these times and save on other pleasures,” explained Product Manager Greg Peters.

The stock markets have apparently already priced in a good Netflix result. While the overall market is clearly in the red this year, the Netflix share is a third more expensive than at the beginning of January. After the publication of the record quarterly figures, however, it fell by one percent after the exchange.

Netflix’s cautious forecast may also have contributed to this: “We preferred user growth, so growth will be lower in the third and fourth quarters,” said Hastings.

In the current quarter, the company expects more than $ 6 billion in sales for the first time, but with slower sales growth and only 7.5 million additional subscribers.

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