Moderna Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 2, 2024

There are 17 speakers on the call.

Operator

session. Please be advised today's conference is being recorded.

Operator

I would now like to hand the conference over to your speaker today, Lavina Taliftar. Please go ahead.

Speaker 1

Thank you, Kevin. Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's Q1 2024 financial results and business updates. You can access the press release issued this morning as well as the slides that we'll be reviewing by going to the Investors section of our website. On today's call are Stephane Bancel, our Chief Executive Officer Stephen Hoag, our President and Jamie Mach, our Chief Financial Officer. Before we begin, please note this conference call will include forward looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker 1

Please see Slide 2 of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward looking statements. I will now turn the call over to Stephane.

Speaker 2

Thanks, Filavina. Good morning or good afternoon, everyone. Thank you for joining us today. I will start with a review of our business, Camille will then present our financial results, Stephen will review our late stage clinical programs and I will close by sharing our 2024 commercial priorities and major upcoming milestones. Our COVID vaccine has already impacted 100 of millions of people.

Speaker 2

I'm excited by the progress we've made with our pipeline that has the potential to impact many more people. During the Q1, we presented substantial clinical progress during our vaccine day with exciting data on the BV, VZV and norovirus. In addition, along with our partner Merck, we expanded studies for individualized neoantigen therapy, INT, into 3 new indications. In addition, to ongoing Phase 3 studies in adjuvant melanoma and adjuvant non small cell lung cancer, the Phase twothree study has started in neuroadrivent adjuvant cutaneous squamous cell carcinoma, another form of skin cancer. Phase 2 clinical trials are started in adjuvant bladder and adjuvant kidney cancer.

Speaker 2

Together, our vaccines and therapeutic portfolio have a potential to impact 100 of millions of people each year. I am pleased with our Q1 performance. Since the beginning of the year, we announced 4 important business agreements and collaboration. We entered into a non exclusive IP out licensing agreement with a leading pharmaceutical company in Japan. The agreement includes an upfront payment and low double digit royalties to Moderna on the sales of COVID-nineteen products marketed in Japan by this company.

Speaker 2

It is nice to see a company recognizing our IP and our figures for our license. 2nd, we recently announced a contract to provide 4,500,000 doses of COVID-nineteen vaccine to a Ministry of Health in Brazil. I am very pleased with this partnership as it is the very first time that Moderna works with Brazilian government and we look forward to providing these doses to protect people in Brazil as they go into their winter season. We announced the project financing program for $215,000,000 in funding with Blackstone to further develop our food program. We also made public our collaboration with OpenAI to use AI as a transformative tool to increase speed and efficiency and ultimately to improve patient outcome across our business.

Speaker 2

Finally, we approved the metagenome to terminate our gene editing collaboration. All rights granted under the collaboration will be returned to metagenome. This is a good proof point of Mona's continuing into prioritize our investment for best opportunity to drive returns. Turning to Q1 financial results. In revenues, we were ahead of our plans at $167,000,000 reflecting the highly seasonal nature of our respiratory vaccine business.

Speaker 2

The net growth was $1,200,000,000 We ended the quarter with $12,200,000,000 of cash and investments. We communicated during our November call our focus on financial discipline. I am pleased with what the team has achieved with our operating expenses, cost of manufacturing expenses, plus cost of R and D expenses, plus cost of SG and A expenses were down almost $800,000,000 in Q1 2024 versus Q1 2023. Jamie will elaborate on this in his section. With that, I will now turn to Jamie.

Speaker 3

Thanks, Devon, and hello everyone. Today, I will walk you through our financial performance for the Q1 and provide commentary on our 2024 financial framework. Let me start with our commercial performance on Slide 8. Net product sales for Q1 were $167,000,000 down 91% year over year, mainly driven by lower sales volumes of our COVID-nineteen vaccine in regions outside the United States. This decline aligns with the anticipated transition of the COVID-nineteen vaccine market towards a seasonal pattern.

Speaker 3

Whereas in the Q1 of 2023, we primarily delivered doses that were deferred from 2022. Q1 was driven by sales in the U. S. And the rest of the world, largely Latin America markets. For Q2, we expect about $100,000,000 in sales for a total of approximately $300,000,000 in the first half of twenty twenty four.

Speaker 3

Q2 will include a portion of our recently announced contract with Brazil. Moving to Slide 9. Net product sales were $167,000,000 as I just explained. For the Q1 of 2024, our cost of sales was $96,000,000 which included 3rd party royalties of $8,000,000 inventory write downs of $30,000,000 $27,000,000 related to unutilized manufacturing capacity and wind down costs. This resulted in our cost of sales representing 58% of net product sales, up from 43% in the same quarter last year.

Speaker 3

The increase in cost of sales percentage was primarily due to the lowest level of sales in the quarter. We continue to expect the full year cost of sales to be approximately 35% of product sales. However, due to the strong seasonality of our business, we expect a higher percentage in the first half. Moving to our R and D efforts. Q1 R and D expenses were $1,100,000,000 reflecting a decrease of 6% year over year.

Speaker 3

This reduction was primarily due to the absence of upfront collaboration payments being made this quarter. The upfront payments made in the Q1 of 2023 were related to our strategic collaborations with Generation Bio and Vicetic. With the Q1 spend of $1,100,000,000 we are tracking towards the full year expected spend of approximately $4,500,000,000 Q1 SG and A expenses were $274,000,000 marking a 10% decrease year over year. Importantly, this decrease was driven by all functions in SG and A and it is a result of our strong focus on cost discipline and strategic investments driving productivity. I will provide additional color on the next page.

Speaker 3

We reported an income tax expense of $10,000,000 for the Q1 of 2024 compared to an income tax benefit of 3 $84,000,000 in the same period last year. The shift is primarily due to the continued application of evaluation allowance on the majority of our deferred tax assets, which we first established in the Q3 of 2023. Net loss for the period was $1,200,000,000 compared to net income of $79,000,000 last year. Diluted loss per share was $3.07 compared to diluted earnings per share of $0.19 in 2023. We ended the Q1 with cash and investments totaling $12,200,000,000 down from $13,300,000,000 at year end 2023, largely attributable to research and development expenses and operating activities.

Speaker 3

Moving to Slide 10, I want to take a moment to elaborate on the efficiencies we are now seeing across the company. As a platform company, we have the opportunity to build a unique operating model. And over the last few years, we have invested purposefully into people, processes and technologies to build foundational capabilities that will allow us to scale efficiently. 1st, we ended 2023 with nearly 6,000 employees, up from 1300 at the end of 2020. Every function scaled capabilities to enable the increasing product launches we expect over the coming years.

Speaker 3

Additionally, as you know, Moderna has always led with a digital first mindset. Over the past 3 years, we have nearly doubled our built for purpose software applications to digitally enable our teams. As an example, we recently went live with a newly implemented rebuilt ERP system. SAP for HANA is our new digital backbone for all our operational activities. We have used SAP in the past.

Speaker 3

However, it was built for a research and development focused company and now we have implemented it in entirely revised version supporting our more effectively and efficiently. Another example is our rapid adoption of artificial intelligence. Over the past year, we've built over 750 GPTs. One example in the legal space, our contract companion GPT streamlines the task of reviewing and summarizing contracts across the business. With the GPT providing step by step guidance to craft a tailored insightful summary.

Speaker 3

This enables any function to extract critical insights from contracts whenever needed, minimizing bottlenecks and freeing up Moderna's legal department to focus on work of higher strategic value, thus enhancing operational efficiency and decision making. Another example in G and A is a purchase and paid GPT for all questions around our procurement and payment processes. Instead of our employees having defined and read policies and procedures, they can easily query the GPT. It also saves time for our procurement and payables teams from answering numerous questions. AI has already changed our way for a short period.

Speaker 3

In general, we see the areas developing incredible speed that allows for an unprecedented impact on productivity in many. We have rolled out a comprehensive training program and are committed to driving this technology breakthrough. As a result of these strategic investments in the people, processes and technology, we were able to significantly reduce purchase services and our use of external consultants, which contributed heavily to the 10% year over year reduction in SG and A spend. We are also seeing similar benefits in R and D and manufacturer. In general, we now have a solid foundation with our operating model.

Speaker 3

As we continue to grow our commercial activities, we will need to further invest, however, we will be able to do that more efficiently. Now let's turn to the 2024 financial framework on Slide 11, which is in line with what I shared on our last earnings call in February. We continue to expect net sales for 2024 approximately $4,000,000,000 which we think will be a low point as we expect to return to growth in 2025. Sales in the first half of the year are now expected to be approximately $300,000,000 We continue to expect cost of sales approximately 35% of product sales for the full year. For R and D, we continue to expect full year expenses to be approximately $4,500,000,000 down from $4,800,000,000 in 2023.

Speaker 3

For SG and A, we continue to expect full year expenses to be approximately $1,300,000,000 down from $1,500,000,000 in 2023 and we expect taxes to be negligible in 2024 and capital expenditures in 2024 to be approximately $900,000,000 Finally, we expect to end 2024 with approximately $9,000,000,000 in cash after touching a low point of approximately $8,000,000,000 at the end of Q3 due to the seasonality of collections. Finally, let me also touch on our recently announced project financing deal with Blackstone, which we are excited about. In March, we entered into a development and commercialization funding arrangement, which commits Blackstone to providing us with up to $750,000,000 of funding for our flu program, so that we can strengthen the product label and fulfill our remaining regulatory applications. Subject to the regulatory approval in the United States, which depends on data from the funded activities, Blackstone will be entitled to receive up to $750,000,000 in sales milestone payments. These milestone payments are contingent upon achieving specified cumulative net sales targets for our future influenza and combination vaccines.

Speaker 3

Additionally, Blackstone will earn royalties on applicable net sales at a low single digit percentage rate. This funding will offset our R and D expenses and is factored into our R and D framework for the year of approximately $4,500,000,000 Overall, we are excited that this deal enables us to accelerate the advancements of our pipeline. And with that, I will now hand the call over to Steve.

Speaker 4

Thank you, Jamie. Today, I'll review updates from our clinical programs that were shared during our recent Vaccines Day as well as new developments in our therapeutic portfolio. Starting with respiratory vaccines, we shared updates to many of our respiratory programs at Vaccines Day in March. Our RSV vaccine Canada is undergoing regulatory review in multiple countries and pending approval, we expect to launch the product in the United States following the June ACIP meeting and recommendations this year. At Vaccines Day, we shared updates from co administration studies for RSV, confirming the ability to administer our vaccine and other vaccines given during the respiratory season.

Speaker 4

With our flu program, we recently presented data from our Phase 3 P303 study at Esmid and continued discussions with regulators globally towards the goal of filing this year. For our next generation COVID vaccine mRNA-twelve eighty three, we've presented positive Phase 3 safety and immunogenicity data and are engaging with regulators on the path to approval for that product. Our combination flu and COVID vaccine, mRNA-ten eighty three is in Phase 3 and we look forward to sharing those clinical data in the Q1. Turning now to our latent and other vaccines. As shared at Vaccines Day, we've made significant progress in this portfolio.

Speaker 4

Our CMV vaccine mRNA-sixteen forty seven has fully enrolled its Phase 3 trial and we have the potential for an interim analysis of efficacy this year. We announced positive Phase 1 immunogenicity and safety data from our EBV vaccine candidate mRNA-eleven eighty nine and we are now advancing towards pivotal trials with that program. A second therapeutic EBV candidate mRNA-eleven ninety five is in a separate ongoing Phase oneseven. MRNA-fourteen sixty eight, our vaccine against varicella zoster virus showed strong immunogenicity including strong T cell responses and we are preparing to move that program forward towards a pivotal Phase 3 study as well. And our HSV vaccine against herpes simplex mRNA-sixteen oh eight is now fully enrolled in its Phase III study and we look forward to sharing clinical data updates when that's available.

Speaker 4

Now rounding out this portfolio, we presented the positive clinical data from our norovirus vaccine candidate mRNA-fourteen oh three and shared that we are advancing that program towards its pivotal Phase III trial. Turning now to oncology therapeutics. We are happy to report our ongoing Phase III studies are enrolling well. We were excited to announce 3 new INT trials including a randomized Phase twothree study in neoadjuvant adjuvant cutaneous squamous cell carcinoma, a randomized Phase 2 trial in adjuvant high risk muscle invasive bladder cancer and lastly, a randomized Phase 2 trial in an adjuvant renal cell carcinoma. Now recently at AACR, we presented Phase 1 data from our INT program in advanced unresectable HPV negative head and neck cancer in the metastatic setting.

Speaker 4

At AACR, we also presented Phase 1 translational data from another oncology therapeutic program mRNA-two thousand seven hundred and fifty two in various tumor types. Links to both of these presentations are provided on the slide. Now as a final note, at ASCO, we'll be hosting another Moderna Oncology event on the evening of June 3rd and we look forward to seeing you there or having you join us virtually. With that, I'll turn it back over to Stephan.

Speaker 2

Thank you, Stephen and Jamie. Slide 18 is an overview of our COVID-nineteen strategy for 2024, which is focused on the needs of each region. In the U. S, our focus is working with public health officials, healthcare providers and pharmacies to increase vaccination coverage rates. In Europe, we're actively participating in the 2024 tender process.

Speaker 2

The tender allows for up to 36 $1,000,000 per year for up to 4 years. And in the rest of the world, we have reoriented our commercial teams to prioritize markets for greater commercial focus and impact. As mentioned earlier, the Brazil contract is an example of how this is working. In April of 2023, U. S.

Speaker 2

COVID vaccination rates lagged behind flu vaccination rates. U. S. COVID vaccination rates were 11% with full vaccination rates at 4 times that. And yes, COVID continues to show a higher burden of disease.

Speaker 2

U. S. Hospitalization for COVID between October 2023 and last week were 424,000 people, which is markedly higher than hospitalization from either flu or RSV infection. Actually COVID hospitalizations were around the same level as hospitalizations of flu plus RSV combined. In addition, long COVID continues to be a serious risk.

Speaker 2

Too many healthy young adults in their 20s, 30s, 40s are losing lung capacity and or metal capacity due to long COVID. The data shows that COVID-nineteen vaccine reduced the risk of lung COVID by 70%. We believe education and awareness will be very important. We are working on educating consumers about the need for an annual COVID vaccine just like flu. Too many people are getting hurt when we have safe and effective vaccines available.

Speaker 2

Our job will not stop until the hospitalization numbers come down significantly. As you know, strength selection by health authorities received approval and launch of COVID vaccine. Health authorities including the WHO and EMA in Europe have recently selected the JN. 1 strain for the 2024, 2025 formula. The FDA will host the VIA PAC meeting on May 16 to select a strength for the U.

Speaker 2

S. Market. Modena has already manufactured JN1 drug substance to support the potential August launch. We have also prepared for backups in case the FDA does not select Gn.1. In 2023, COVID vaccines were available 5 weeks later than flu vaccine.

Speaker 2

In the recent channel alone, more than 3,000,000 flu vaccines were administered before the updated COVID vaccines were available. As we look into the fall 2024 season, we see the potential to align the timing of flu and COVID vaccine approvals. We're encouraged by the earlier Vipark meeting for this year's COVID trend selection versus last year. And we're working with FDA and regulator for timely COVID approval. We expect higher vaccination update if COVID vaccines are available sooner.

Speaker 2

Turning now to the anticipated launch of our 2nd respiratory vaccine or RSV vaccine, which is expected to launch into a large market. In its 1st year, the older adult RSV market was $2,500,000,000 in sales and analysts expect the older adult market to grow between $6,000,000,000 $8,000,000,000 per year. We're marketing application filed in markets globally. We're anticipating approval beginning in the first half of twenty twenty four. In the U.

Speaker 2

S, we're targeting a launch after the June ACIP meeting. We're very excited to bring a product with a strong differentiated profile to market. Orbatin has showed strong efficacy and safety data in clinical trials and will be the only product available in the pre fill syringe or PFS presentation. Let me now double click on what we believe are the benefit of PFS. We recently published a time and motion study that showed faster preparation time for PFS relative to vaccine that require substitution.

Speaker 2

Recall that both R and D competitors vaccines on the market require multiple steps to prepare the vaccines for administration. One vaccine requires 4 steps and the over 9 steps to prepare. Our PFS presentation is ready to use vaccine straight out of the box. The study found that PFS presentation to be 3 to 4 times more efficient as measured by preparation time. Details from the study can be found through the link on the slide.

Speaker 2

We believe our PFS presentation for RSV vaccine has the potential to ease the customer burden on pharmacies during the fall respiratory season. The pharmacy chain, but also independent pharmacies and we're looking forward to the launch. Let me close with major upcoming pipeline milestones. We're excited about the commercial prospects for the year. We're even more excited about the upcoming pipeline milestone and the effect they will have on our commercial outlook for the next several years serving patients.

Speaker 2

In respiratory vaccines, we are eagerly awaiting the approval of RSV and the FDA recommendation. We are also waiting for data for RSV in the age group 18 and above. We are in discussion with regulators on our full program and intend to file in 2024. We have our next gen COVID vaccine among NKTR-twelve eighty three. We are pleased with positive Phase 3 immunogenicity data and are engaging with regulators.

Speaker 2

Our flu plus COVID vaccine combo should get this Phase 3 data soon. In latent, with CMV fully enrolled and accretive cases, we look forward to potential for Phase 3 data efficacy data in 2024. In our IND program, we're looking forward to completion of enrollment for Phase 3 adjuvant melanoma study. In addition, we are keen to discuss the possibility of accelerated approval with regulator based on Phase 2 study data. As we shared before, there are 3 things we view as necessary before we could consider pursuing active approval for IND.

Speaker 2

1st, durability data from our Phase 2 study, which we announced in December last year. 2nd, a substantially enrolled Phase 3 adjuvant melanoma study. And 3rd, manufacturing readiness at our Marlborough site. And last but not least, our revenue portfolio will look forward initiating pivotal study for PMMA. This milestone will represent continued progress toward our mission to deliver the greatest possible impact to people through mRNA medicine.

Speaker 2

And at Moderna, we are dedicated to achieving them all. Every data continues to confirm the power of our platform and its breadth in the service of patients. 2 important step ahead for your calendars. We will discuss our oncology program in Chicago on June 1 and our annual R and D Day will be held in New York the morning of September 12. Thank you for listening and we look forward to taking your questions.

Speaker 2

Operator?

Speaker 4

Thank

Operator

Our first question comes from Salveen Richter with Goldman Sachs. Your line is open.

Speaker 5

Good morning. Thanks for taking my questions. Firstly, could you discuss your strategy for pursuing contracts for the RSV vaccine, given 2 approved vaccines that have a head start timing wise? And help us understand, as you've communicated with large retail pharmacies, how significant the PFS formulation is to them? And then secondly, with regard to moving into the 3 new indications for the INT program, maybe help us understand signals or specific data points that support that?

Speaker 5

Thank you.

Speaker 2

Good morning. On the IASD contract, so as you know, we're not allowed to contract until the product is approved by the regulators. But what we are doing because we can do that is our medical team actively engaged with retail pharmacies, but also IDN hospital networks in terms of making sure of the data on the efficacy profile of a product, on safety and of course on the PFS and the benefit of PFS in terms of productivity. Those discussions are ongoing literally on a daily basis, including with leadership of those And the next step, of course, is to wait for the FDA approval.

Speaker 3

Stephen? Yes. Sure. So thanks for

Speaker 4

the question. So on the 3 additional INT indications, I think the short version of it is they are all adjuvant settings similar to our melanoma Phase 2 results have been so encouraging. Where KEYTRUDA has a known benefit and where we still believe that there's an opportunity to improve upon that by driving a specific T cell response with INT. And so as you know, in Phase 1, we looked across a range of different indications that was more in metastatic setting. But as we've announced since we first saw that positive Phase 2 results from melanoma, we have been aggressively pursuing adjuvant indications where IO is approved and where we see an opportunity and all three of these fit squarely in that space.

Operator

Thank you. Our next question comes from Michael Yee with Jefferies. Your line is open.

Speaker 6

Hey guys, thanks. Two questions as well. On RSV, I guess the competitor GSK as well this week was commenting about how they're expecting you to be in the mix and contracting is ongoing. I know you have some RSV in your guidance. I think the math implies maybe 100 of 1,000,000 of dollars.

Speaker 6

Can you just perhaps comment on how you adjusted or probability adjusted or thought about how much is there in your guidance and your confidence on that for this year? And then secondly on I and C as well, I know you have some data at ASCO. I know you have breakthrough therapy and PRIME designation. How important is the Phase 3 enrollment progress, the confirmatory study? I feel like that's always an important discussion with FDA.

Speaker 6

So how important is that progress before you can really engage with FDA? Thank you.

Speaker 3

Yes. Maybe I'll take the first one. Thanks Mike for the question. So as you may know, we haven't guided any specific guidance or number for RSV. In the past, we did break down the $4,000,000,000 into 3 different segments around the U.

Speaker 3

S. Market, the APAs we walked into the year with and then another category of other COVID sales that didn't have any APAs across the rest of the world. A good example is Brazil that we just signed as well as RSV. So no specific guidance for RSV from a financial perspective.

Speaker 4

And on the question of

Speaker 2

I and C, I think

Speaker 4

you nailed it. It's a really important topic, in particular right now, as we think about accelerated approval that we demonstrate the diligence and substantially enroll the confirmatory study. So really all you're waiting for is for that study to mature could be several years. We think it's really important. To be fair, we have not consulted with the agency on that yet.

Speaker 4

As we've said, we're waiting until we've crossed our own threshold and also at this point until we've established the manufacturing facility or outline of sight to them. But we do feel that, as we've said, substantial enrollment demonstrating that essentially all you're waiting for is the readout on that confirmatory study is our obligation before we even want to go forward with that question. We are making great progress this year and we're optimistic that both that and the facility will be available in short order. And then of course, we'll want to start engaging with our data, including the FDA on the question of accelerated approval.

Speaker 6

Got it. Thank you very much.

Operator

Our next question comes from Terence Flynn with Morgan Stanley. Your line is open.

Speaker 7

Great. Thanks for taking the question. Maybe 2 part for me. Just on the RSV vaccine, can you provide your latest perspective on what the most likely ACIP recommendation will be? Will you get a parity recommendation to the competitors?

Speaker 7

Or do you think there's a potential for a differential recommendation here? And then just wondering, any update on your ongoing conversations regarding filing your seasonal flu vaccine? I know you mentioned in your prepared remarks, but just any more insight in terms of what the gating steps are here? Thank you.

Speaker 4

Thanks for both questions. So first on RSV, caveat by saying, we have to complete the approval process with FDA. And then at the end of the day, the recommendation really falls to ACIP and the committee members, so defer to them. Our expectation, our hope is that when they review the data package that we already have, as well as additional data that we expect to be able to share at the ACIP meeting on durability through a second season and on immunogenicity across other populations. We expect a parity recommendation.

Speaker 4

We certainly think the data supports that. But again, I'll defer to the committee members on the ultimate decision. On the question of flu, we are actively engaged right now on the with regulators on the process for submission of the flu vaccine. As I mentioned a moment ago, we are also closing in on clinical data from our combination flu COVID vaccine mRNA-ten eighty three. And that obviously has an important role in our engagement with regulators generally on flu versus flu COVID in combination.

Speaker 4

And so those discussions are ongoing. I won't provide any other update on it except to say as we've said today and we continue to say, we expect to file the fluid product this year, but it will be dependent upon a number of considerations, possibly also including the

Speaker 8

FEED COVID data that we expect to see soon.

Operator

Thank you. Our next question comes from Ellie Merle with UBS. Your line is open.

Speaker 9

Hey guys, thanks for taking the question. On CMV, how are you thinking about the need or benefits of potentially boosting, both from a clinical as well as a commercial perspective and if you would study this? And then second, just on CMV, if you don't meet the interim, the analysis there, would you disclose that? Thanks.

Speaker 4

Great. Thank you. So first on the question of boosting. So far what we have, we obviously don't have the efficacy readout, that's the Phase 3 study that's ongoing. But we do expect to have quite substantial durability data on immunogenicity and it's quite possible the efficacy data will give us a signal of the correlative of production to be.

Speaker 4

And so we don't right now have any evidence they're not good durable multi year possibly alongside year to continue tracking immunogenicity protection. It's possible that will extend out to 10 years and then some boosting is necessary. It's also possible that we decide that a booster might be necessary shorter term analysis, 5 years or 10 years. We just don't know at this time. And so at present, the data we do have on the durability of the immunogenicity, it looks quite strong.

Speaker 4

And so we do think that 3 dose series will likely be productive for a very long period of time, all subject to the efficacy data that you just referenced. So on the interim analysis for efficacy, as we've said before, we're making great progress in that study in the growing cases and we do expect to be able to provide an update on or conducted at least an initial interim efficacy analysis this year. Because of the rate of case accrual and also because the protocols for us to cross a median of 1 year follow-up, the timing maybe sets that by the time we get to that first interim analysis, we are also have enough cases for a final analysis or that a final analysis is imminent. Let's say it's a very short period of time away. And so because of that uncertainty until we see that data and understand how close we are to that final analysis, I don't think we can commit one way or the other, whether we're going to be updating.

Speaker 4

It will really depend upon the data we see and then how quickly we expect to get that final analysis. At the end of the day, if we have news to share, both on the interim and the final, we of course will. But I don't think we can commit at this stage that we haven't seen the data yet.

Speaker 9

Great. Thanks.

Operator

Next question comes from Hartaj Singh with Oppenheimer. Your line is open.

Speaker 10

Great. Thank you for the question. I just had a question on you're developing a refrigerator stable vaccine and flu vaccine, I believe. And I'd just like to kind of understand how you think about that? When could that get approved?

Speaker 10

And then will the combo vaccines also be refrigerator stable?

Speaker 4

Thank you. Great. Thank you, Hartaj. So

Operator

And pardon me, can you hear me now? Could you try speaking again? Your line was muted.

Speaker 4

Yes, I'm here. Can you hear me? Yes, we

Operator

can hear you now. So your line got muted, but you can

Speaker 4

go ahead and continue. Great. Sorry for that brief interruption. So Hartaj, thank you for the question. Just to quickly restate what I was saying.

Speaker 4

All of our respiratory portfolio RSV, flu, COVID and the flu COVID combo are being developed towards refrigerator stable PFS. And so our mRNA-ten eighty three program, the flu COVID program as well as the flu program are intended to be refrigerator stable prefilled syringes. As Stephane mentioned a moment ago, we really view that as the ideal presentation, the optimal presentation for healthcare providers really around the world, to facilitate their delivery of the vaccine to patients.

Speaker 10

Great. Thank you. Thanks for the question, Steve.

Speaker 4

Thank you.

Operator

One moment for our next question. Our next question comes from Gena Wang with Barclays. Your line is open.

Speaker 11

Thank you for taking my questions. I have 2. One is regarding COVID. So for the EU, you said up to 36,000,000 doses every year in EU. What could be the scenario you can get 36,000,000 doses in EU?

Speaker 11

And also the price in Brazil and EU, should we use pandemic price of $25 to $30 per doses at the benchmark? Quickly on R and T, accelerate approval path. Based on, I'll say, today's comments and the prior discussion, our impression is you could achieve all the 3 key components

Speaker 9

by the

Speaker 11

end of this year. Is Merck is also fully on board to submit for the accelerated approval in melanoma?

Speaker 2

Thank you, Gina. It's Stephane. I'll take the COVID question and then Stephen will talk about IND. So the tender is up to 36,000,000 doses. It will depend on the number of countries that apply to the tender for the EU.

Speaker 2

So this will know at the end of the process. And as you know, it's a tender process, so there's no dialogue. We're just ensuring all the files and all the data and that's really ongoing. The team is obviously very active on it. And on price for obvious competitive reasons, we're not going to share price in any market to because company doesn't have the price right away.

Speaker 2

Stephen, I and D?

Speaker 4

Yes. So, we haven't specifically guided to when we expect to complete obviously the second and third parts of our three part criteria. That being manufacturing readiness, as you can imagine, work is going on around the clock, as well as the involvement, we've made great progress, but you have to sustain that progress. On your question of where is Merck on this, I think, you'll have to direct it to them. Our view is that, if we're able to get to the point where accelerated approval is appropriate and regulators are supportive of that, we can't imagine why ourselves and Merck wouldn't want to make the product available to help people suffering from cancer right now.

Speaker 4

But the contingencies there are obviously we have to do our work and our diligence this year. And then ultimately we have to speak to regulators and they get to decide whether that pathway is available to us. And so I think for both ourselves and our partner Merck, we'll want to defer to regulators ultimately on that choice.

Speaker 11

Thank you.

Operator

Our next question comes from Luca Eci with RBC Capital. Your line is open.

Speaker 12

Great. Thanks so much for taking my questions. Maybe a quick very quick one on RSC. I think the last press release actually cited May 12 as the PDUFA date, while today you're simply saying there's initial regulatory approvals in the first half of twenty twenty four. So is there anything to read to anything just confirm that the PDUFA date is still May 12, which is actually the end of next week?

Speaker 12

And then maybe second on IP, can you just comment on the recent decision by Judge Goldberg to rule out in favor of Arbutus or you're looking at a particle? Our understanding, this can have a pretty material impact on both prior and future sales of COVID. So again, any thoughts there, much appreciated. And then super quickly on IMT, Steve, what's holding you back on starting a randomized trial in tendered neck cancer in the metastatic settings? I thought the data to ACI was pretty impressive.

Speaker 12

So any thoughts there, much appreciated. Thanks so much. Great.

Speaker 4

Thank you for the question. I'll take this first from the 3rd very quickly. So on the question of RC, we continue working towards the same PDUFA date and there's not a change to that. As you know, there's a lot of work and around the clock work by ourselves, obviously, and folks at the agency. And so we're hopeful that that happens as planned, but if it takes a little bit longer, at the end of the day, what really matters

Speaker 8

is the

Speaker 4

June ACIP meeting, but there's been no change to report. So don't read anything into that. As far as the INT question, on head and neck, I appreciate the question because we are also obviously enthusiastic about that data. However, our partner Merck and ourselves, we have not yet decided where that fits in the priority of other indications, histologies and opportunities we're pursuing. As you've already seen in the past year, we've stood up a very large number of studies and we're just trying to pace ourselves.

Speaker 4

And so it will take us a little bit of time with our partner Mark to determine what the next steps are in head and neck. And at

Speaker 8

this point, we do not have an update on.

Speaker 2

Thank you. And I'll take the IP questions. I mean, as you know, our COVID-nineteen vaccine technology, including our lipid nanoparticle delivery system is a result of independent research and development. We have a strong belief that our technology does not infringe on the patent asserted by Arbutus. We are confident in our position and we look forward to presenting our case at trial next year.

Operator

Thank you. Sorry, our next question comes from Jessica Fye with JPMorgan. Your line is open.

Speaker 13

Hey, guys. Good morning. Thanks for taking my questions. I had a few here. So for INT, I know you mentioned you can't comment on when you expect to complete manufacturing scale up.

Speaker 13

But can you provide a status update on where you stand with that today and the number of patients you can support right now as well as where you want to take that capacity once you get to the end of this 3 phase scale up process even if you don't put a timeline on when you'll get there? Next one is, coming back to flu. Can you just refine a little bit when the 1083 immunogenicity data will be available? And maybe elaborate on how the combo data play a role in the regulatory talks on 10.10? I thought you previously said these products could stand on their own and that you might not need 10/10 approved to get 1083 approval.

Speaker 13

So now wondering kind of why 1083 might factor in for 10/10? And then lastly on CMV, can you remind me how the risk of CMV in pregnancy compares in seropositive versus seronegative individuals? I'm thinking from a commercial standpoint, how you weigh the strategy of pursuing vaccinating everyone versus just seronegative people? Thanks.

Speaker 2

Great. Thank you for the questions. I'll start with the INT question on manufacturing and then Steve, I would say, we're on

Speaker 8

the same.

Speaker 2

So we have not provided capacity numbers for the factory in Marlborough. But of course, as you can assume, we know the size of our melanoma market. And we know our stronger data. We're planning to be for benefiting from the Phase 2 data. So we've signed the plant accordingly as you can imagine.

Speaker 2

But so we are building the plant for scale because as you know, Stephen and his team and his colleagues are running a lot of studies. So this is not a planned formula, no matter what, it's a plan for INT. Again, from a manufacturing standpoint, we don't care which cancer is in terms of organ, because we use genetic information to design an individualized product for every human being. So basically, we bought a plant last year that was kind of a big building finished, to save us time to market. Obviously, we don't have to get the permitting and build the building.

Speaker 2

And so the team since then that is now more than a year ago has been working actively to get the plant ready. And the plant that will be built in modules inside the building. So basically, we're going to launch for the first module of manufacturing capacity. And then and one day maybe we do an opening of a facility like we did for Norwood. You will see there's a lot of empty space left behind, which shall also very quick ramp up because the HVAC system and all the utility system has been set up for the entire plant.

Speaker 2

And so then you just add modules as you go. So we'll have the ability to scale very quickly as we get more indication available. But again, we are aware of the melanoma number of cases and so the plants will be sized, so we make sure we can provide products to patients. Steven?

Speaker 4

Thank you for the clarifying question on flu. So let me just start by saying, the independently we are looking to submit both the flu program and the flu COVID combo program, so that's 10/10/10/83. Obviously, we need to see the 10/83 data and we'll announce that when we have it. The question on the timing of that data, it's imminent. And so in the coming quarter, we expect to be able to share that update.

Speaker 4

The point about interdependency, I suppose, is just more about sequencing of those submissions. And in some places, in some regulatory geographies, obviously, you can't stack them on the same day, if you will. There's a logical sequence. And what we'll want to assess once we see the 103 data is our regulatory strategy as well as our preparation delivery of data for the submissions to determine which one will go first or second. But at this point, we're trying hard to make sure that we can do both products across all of our major markets if the data is positive this year.

Speaker 4

And so, yes, that go more on that as we move forward. But for now, we are proceeding with independently. Sorry about any confusion about that. On the question of CMV and seropositivity, so it's a really important point. Thank you for raising it.

Speaker 4

But while the majority while the risk of vertical transmission of CMV to pregnancy to the fetus is highest in seronegatives. It does happen in seropositives as well. So congenital CMV is a disease that's seen in particularly in reactivation or sometimes reinfection even in the seropositive context. And so we do believe that there's a potential for benefit for vaccine even in the seropositive population. We are evaluating the study right now in the seronegative because the rate of that transmission and obviously the potential to prevent against infection is more enriched and therefore the study side primary are focused on seronegatives.

Speaker 4

But we are looking we have studied the vaccine from a safety perspective in seropositive and we are looking at things like shedding. And if you draw a little bit of an analogy to or correlate to the EBV data that we've already put out there in a different virus, but we've been able to show that we can really control the rate of setting even in seropositive, basically Epstein Barr virus. And so we have some reasons for optimism, at least that when we pull together the totality of the data, there will both be the obvious potential benefit, which is that there is still vertical transmission in seropositors and some potentially some data on the rates of shedding that would be supportive for that. Ultimately though we're studying all the way down to 16 year olds and our goal will be a label that 16 plus with the goal going into a population that is not well as highly seropositive as it is later in the line. And therefore, we see a very large opportunity to try and prevent the primary infection with CMV with the vaccine

Speaker 8

and the potential for EB-six prophylates in such a study.

Speaker 6

Thank you.

Operator

Our next question comes from Jeff Meacham with BofA. Your line is open.

Speaker 9

Hi. This is Alex Hammond on for Geoff Meacham. Thanks for taking our questions. So on your Zoster vaccine candidate, when should we receive updates on your pivotal strategy? And is there any color you can provide today in terms of your current thinking on the Phase 3 design?

Speaker 9

And then our second question is on the PA and MMA programs that are

Speaker 11

Yes. Could

Speaker 6

you describe

Speaker 11

the first part of the

Speaker 4

Yes. Could you describe the first part of the question was on which program, the Zuuster?

Speaker 9

The booster, the shingles.

Speaker 4

Oh, shingles booster. Thank you. So on the VDD program, we have we're obviously very excited by the Phase 1 data, which was compared against the licensed product and we saw really strong T cell responses in immunogenicity. And generally, we've been seeing that across our programs, but in that one, it was very encouraging. We're in the process right now of trying to find a pivotal strategy that will include obviously dose selection, the number of doses in that study and how we're going to expect that study.

Speaker 4

We do not have an update today on what that will look like. In addition to our own thoughts on it, we'll obviously want to consult with regulators before we finalize that, final report. But we are moving forward towards a pivotal study in BCB. We do not have time in

Speaker 8

on that update

Speaker 4

yet. As it relates to MMA and PA, the clinical data that we have continues to show a compelling benefit risk profile, good safety profile. In fact, in the PA studies, we have many folks who've been in those in those study on drug for well over a year. And over 30 years, I think, for last update in overall patient dosing experience. So we are starting to get very clear perspective on the safety profile.

Speaker 4

The editorial question, I don't have a view on editorials or opinions based on the preclinical data. I think we stand behind the clinical data we have and are quite encouraged by that profile and we'll continue to watch it closely in our ongoing Phase I studies. But we do not have any specific or new concerns based on the clinical data today.

Speaker 8

Thanks.

Operator

Our next question comes from Evan Wang with Guggenheim Securities. Your line is open. One moment.

Speaker 14

Question, 2 from me. First on the combo 1083 program, so data it sounds like this quarter, I believe enrollment was completed

Speaker 2

a few months ago.

Speaker 14

So I guess how comprehensive will the top line update be in terms of follow-up? And then with submission, is longer term Vault needed there? And are there parallels from 10.10 that we can take in terms of regulatory filing speed for 10.83? Or is that more impacted by the decision for buying 1 or the other first? Then second on RSV, it's kind of early ahead of approval, but with some international markets, it seems that's more nascent in terms of establishing some reimbursement there.

Speaker 14

So I guess how are you thinking about positioning internationally? Thanks.

Speaker 2

Great. Thank you. So for

Speaker 4

the 10e3 data, yes, on this quarter, and I would say that we're we enrolled the majority of the 10 A3 studies you know last fall. And the 10 ten second generation study, so we've talked about the P303 study. The first part of that enrolled over last summer, just a few months before the combo study. And the second part of it, there was a part B and C, as you know, looking at head to head against Blue Zone HD that actually enrolled, the same time of the TANH research, so last fall. And so they've been actually kind of tracking right on top of each other.

Speaker 4

I think we're going to wait to see the data before we can provide guidance on timing. But obviously, we've been working towards that flu COVID combination product for a while and we will want to make sure that we get that file, if they're positive as fast as possible. I wouldn't draw too many because the difference of the structures of the study between the P303 study, which has a Part A and a B and C and the TANES three study, which was done very quickly

Speaker 8

in the fall. I wouldn't draw too many for

Speaker 4

ways between reading out and the timing for submission on either one. Svein, do you want to take the RSV question? Sure.

Speaker 2

So the international markets, obviously, very important. The U. S. Is very important, but the U. S.

Speaker 2

International are also super important. As we shared before, we found in all the major geographies already, of course, EU, UK, Canada, Australia, some countries in Asia, some countries in the Middle East. RSV is well known by public health leaders like it is in the U. S. So I think that there's a very strong desire, I guess, to protect the elderly like what we are doing here in terms of through COVID, I would say that's becoming very kind of a standout that public health leaders, health ministers across at least the developed world, but even in developing countries, there's more and more interest as you see aging population everywhere.

Speaker 2

So it's only the U. S. Approval that we expect coming soon as we have several geographies that will stop being approved soon.

Operator

Thank you. Our next question comes from Simon Baker with Redburn Atlantic. Your line is open.

Speaker 15

Two quick ones, if I may. Just in terms of the timing on the CMV interim data, You said this quarter it could be as early as the end of 'twenty four. That sounds slightly later than you'd previously said. I just wonder if that's me over interpreting the semantics or whether there is a slight delay there. And then the second question is on the HSV vaccine.

Speaker 15

Previous quarters, we talked about the EBV vaccine and the potential utility in multiple sclerosis. So I just wonder what your thoughts were about HSV and its the hypothesis that implicates its role in Alzheimer's disease? Thanks so much.

Speaker 4

Thank you for both questions. So first on the clarification, there's no change to our expectations on when the CMV readout will happen. I think we previously tried to be careful in saying that we expect it to happen this year. And so obviously by the end of this year is meant to say the same thing, but there's no change in our expectations at this point. On the HSV Alzheimer's hypothesis, it's a very interesting there's a lot of neuro inflammatory questions that go with the herpesimplosargics infection across a range of different indications, Alzheimer's one of them.

Speaker 4

At this point, the studies that we expect to move forward with HSV will be for seropositive to improve outcomes, instead of shedding days for instance or lesion days. And then eventually we will want to consider whether we want to go at prevention of infection, which is obviously a different standard, a different indication, that might be more relevant for them how you think about, some of the neuro inflammatory or long term sequelae. I think you asked my opinion on the side. I think it's incredibly interesting and exciting. I do think it's early for us to start drawing connection from a vaccine perspective in terms of our potential impact for it.

Speaker 4

I hope over time there is an opportunity to intervene and things like that. Obviously, in the EBD vaccine with multiple sclerosis that science has firmed up to the point where there's reasonably high conviction that there's a potential for benefit there. We have to go prove that. But at this point, it's still earlier days, I think with HSV and Alzheimer's. Great.

Speaker 4

Thanks so much.

Operator

Our next question comes from Edward Turnhofer of Piper Sandler. Your line is open.

Speaker 16

Great. Thank you very much for taking the question and congrats on everything. Actually most of my questions have been answered. But I wanted to ask with respect to the cancer efforts. Are you able to break out what the actual R and D cost is for that program?

Speaker 16

And that's still a cost and profit share with Mark. And how many indications do you guys ultimately plan on pursuing? Thank you so much.

Speaker 3

Maybe I'll take the first one then. So we obviously know what we're spending, but it's not something that at this point that we are prepared to disclose. So maybe someday, but not at this point.

Speaker 16

Understood. And then with expansion, yes.

Speaker 3

Yes.

Speaker 4

On the expansion indication, look, it's a joint decision. Our partnership with Merck has been really strong. We've been building this out. We do like to review those strategically and then bring them forward once we've started them. And so I don't want to get ahead of that because those are our private strategic competition.

Speaker 4

But we are not done yet. We will keep adding in the years ahead.

Speaker 16

Yes, very exciting. Look forward to seeing you in Chicago.

Operator

Ladies and gentlemen, that concludes the Q and A portion of today's conference. I'd like to turn the call back over to Stephane for any closing remarks.

Speaker 2

Well, thank you everybody for joining in today and for the great questions. We look forward to seeing you at the latest ASCO. Have a great day.

Operator

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

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Moderna Q1 2024
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