Bavarian Nordic A/S (BAVA) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Bavarian Nordic conference call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Roll Sass. Please go ahead.

Yes. Thank you, operator. And good afternoon, and good morning to some of you, and welcome to this strategy update where we are to present very positive top line data of our Phase II COVID-19 program as well as an RSV strategy update. Before we start our presentation, I will just briefly run through the forward-looking statements. This presentation includes forward-looking statements that involve risks, uncertainties and other factors, many of which are outside our control that could cause actual results to differ materially from the results discussed. Forward-looking statements include statements regarding our short-term objectives, opportunities, financial expectations for the full year and financial preparedness as of year-end as well as statements concerning our plans, objectives, goals, future events, performance and/or other information that is not historical information. All such forward-looking statements are expressly qualified by these cautionary statements. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances after the date made, except as required by law. So with me here today, I have Executive Vice President, CFO, Henrik Juuel; and President and CEO, Paul Chaplin. And I will hand the word over to Paul Chaplin to start the presentation.

Thanks, Rolf, and welcome, everyone, to our conference call. If you go to Slide 3, earlier today, we came out with 2 very important announcements. And I'd like to walk you through both of those giving you a little bit more background and information. The first was a positive top line results from our Phase II study, investigating ABNCoV2 as a booster vaccine for COVID-19. And the results I'll walk through in the coming slides, but really are probably the best results we could have expected and really sets itself nicely for moving forward into a fully funded Phase III next year. The second bit of news was our plans to move ahead with the Phase III for RSV. As I've been saying for the last couple of months, it's all about time to market. And we really feel that it's owed to our investors and to the public at large that we move this product as fast forward as possible into Phase III. And this is only possible if we're successful with the capital raise that we announced earlier today. So if you go to Slide 5. This is a slide that we often use to introduce COVID-19, and I think little needs to be said about why we need improved vaccines. The last few weeks, there's been nothing but news of a new variant, Omnicron that could be a variant of serious concern. And it just highlights the need for better vaccines with a longer protection, a broader protection that will allow society to get back to normal. On the next slide, just to frame where we are with ABNCoV2, our COVID vaccine. It's a viral-like particle technology, which is extremely powerful platform to presenting highly dense antigen to the immune system. And what we've already seen from Phase I and animal studies is this vaccine is capable of stimulating very strong neutralizing titers against SARS-CoV2. And we've shown that unlike other vaccines that are approved or in development, ABNCoV2 is able to stimulate broad neutralizing responses against all the current variance of concerns. We've been able to secure funding from the Danish government to the tune of DKK 800 million. This completely derisks the program moving forward from a financial point of view and provides the funds to allow us to execute up until launch, which we hope will be in '23. Where we are right now is today, we're going to report top line results from one of the groups from our ongoing Phase II study and to update you where we are with the trial. And obviously, with the positive results that I'll walk you through, we are now moving ahead with the fully funded Phase III next year. So if we go to the next slide, Slide 7, just to remind you of the design of the Phase II. There are currently 3 groups. Two groups will receive a single booster vaccination of ABNCoV2 in people who have been previously vaccinated or have recovered from COVID. One group which will be reporting from today received 100 micrograms of ABNCoV2. The second group will receive 50 micrograms as a booster. That group is continuing to enroll. The third group is the seronegative group. So these are people who have previously not been vaccinated and they're going to receive 2 vaccinations of 100 micrograms of ABNCoV2, and we will report data from the latter 2 groups in the coming weeks and months ahead. So today, we're reporting the booster vaccination of 100 micrograms. And if you go to the next slide, so we actually enrolled 103 seropositive subjects, 23% of these were 65 years or older. 67% had received -- had completed the primary vaccination with an RNA-based vaccine and 32% with an adenoviral-based vaccine and 1 individual that actually recovered from COVID and had not been vaccinated. What you see on the left-hand side -- the graph on the left-hand side of this slide is that the starting titer is at week 0 prior to the booster were relatively low and that about 57% or more of the subjects actually had undetectable antibody titers against the various variants or were below the level of quantification, which is that line you see, LLOQ. So they had very low titers and titers that were associated with lower levels of protection. To put it in the context, titers of 100 have been reported to have an efficacy of around 91%, and titers of 1,000 have been reported to have an efficacy of around 96%. Go to the next slide. This is quite a busy slide in terms of data, but I'll walk you through it slowly to try and get the points across. So these are the neutralizing titers following ABNCoV2 booster against the Wuhan COVID variant strain. If you look at the first cluster of graphs on the left-hand side, these are all subjects in the group, the whole 103. You can see at week 0. Those are the starting titers I've just shown you, week 1 and week 2. By week 2, we see a 15-fold increase in the neutralizing titers to levels associated with very high levels of protection. The next 3 graphs are based on the starting titers. So the next cluster is -- are titers or individuals who had titers below the level of quantification, the LLQ. And here, you can see these are people who desperately need a booster who have extremely low level -- low titers and low levels of protection. And here, you can see within 2 weeks of receiving the booster, there's a 40-fold increase in the level of neutralizing antibodies. The graph on the far right-hand side, these are people who have very high starting titers, higher than the median. So these are people who don't really require a booster and already have titers associated with high levels of efficacy. However, 2 weeks post the booster, they already have -- you can see that there's a twofold increase in their levels. So basically, we see very, very strong boosting responses. And obviously, the responses are highest in those who have the lowest titers and who are in the need of a booster, but we still see significant fold increases even in people who have very high titers against this Wuhan strain. The same trend was seen against all variants. And if you go to the next slide, Slide 10, this is trying to sum up the data that we see against all the various variants, whether there was a two, four or sixfold increase in the neutralizing titers following the booster. In the top left-hand corner, you have the data from all subjects regardless of their starting titer, and you can see the responses against the Alpha, Beta and Wuhan variant strains. In the bottom right-hand corner of this graph, you can see these are people with the highest starting titers, greater than the median. And there, you can see, obviously, the fold increases are slightly lower. As you'd anticipate because these people already have high starting titers. But if you look at the upper right quadrant, these are people with the lowest starting titers below the lower level of quantification. And here, you can see the majority of subjects have a very strong boost following the ABNCoV2 vaccination, and this is true for all variants: Wuhan, Alpha and Beta. If you go to the next slide, Slide 11, this is the responses against the Delta variant which currently is still the major variant circulating around the world. This is singled out as this is a slightly different assay. This is a receptor -- this is a competition receptor binding assay, which correlates very strongly with the neutralization assays I've shown you before and this is a very similar picture. If you look at the left-hand side, this is the overall response where you've seen an 11-fold increase 2 weeks post the booster. The next quadrant, these are people with very low starting antibodies. And here, you see a 21-fold increase in antibodies. And if you look at those at the last quadrant on the right-hand side, these are people with the high starting titers, but we still see essentially a fourfold increase against Delta. So we're really seeing very, very strong boost responses to levels associated with very high levels of efficacy against COVID-19. And this is true for all variants that we've evaluated to date, namely Wuhan, Alpha, Beta and Delta. So if you go to the next slide, obviously, we're still enrolling the other 2 groups in the Phase II study, and we'll evaluate their immune responses as they become available. And we'll be reporting the results from the entire Phase II study at different dose groups and also the seronegatives and the full safety profile in Q1 next year. We are continuing to gear up to Phase III with maybe more energy than before. We're currently manufacturing the Phase III material as we speak. And we're finalizing the discussions on the Phase III design. If you remember, what we proposed to the authorities is a noninferiority study comparing the immune responses induced as a booster by ABNCoV2 to a comparator, which will be an approved vaccine. And as I said, those study designs have, in general, been widely accepted by the regulators. So the Phase III will start next year and already report out next year, while we also upscale the manufacturing activities with a view that if everything goes as we plan, we will file the -- we'll start filing at the end of the year looking for an approval in the first half of '23. So really exciting day for the development of our COVID vaccine. As I said at the beginning, I don't actually think we could have expected any data that could be any stronger than what we've already seen. And it really sets out ABNCoV2 as a really great potential as a universal booster vaccine. So to change gears and talk a little bit about RSV. If you go to the slide -- the RSV slide. You'll see here, RSV is a blockbuster potential. We've been talking about RSV for many, many years. But the realization that this is a serious disease, and there's a huge unmet medical need, becomes stronger by the year. We have an exciting RSV vaccine candidate that is based on MVA platform encoding 5 different antigens of RSV. What we've shown to date is that this is a safe, well-tolerated vaccine in the elderly population. But it is able to provide very strong immune responses, both antibodies and T cells in the target elderly population that we're looking at. And as you'll see the current -- in the coming slides, this year, we reported from a human channel study that we were able to significantly reduce viral load following a challenge and actually could demonstrate an efficacy around 80% against symptomatic RSV infections. So really, some of the best data that people have generated with an RSV candidate in terms of both the safety, the immunogenicity and the efficacy. On the next slide, just to remind you the human challenge study. This is a study that we've already reported. We've vaccinated 30 subjects with our vaccine. Another 30, 31 received placebo. Both were challenged with RSV and were monitored closely for 12 days. The primary endpoint of the study was to see a significant reduction in viral load in the blood but also to look at whether we could prevent RSV symptoms. And on Slide 16, you'll see a reminder of the results. The left-hand graph shows the significant reduction in viral load in the blood. The blue line is the vaccinated arm and the gray is the placebo. So we met the primary endpoint, demonstrating that the vaccine was highly efficacious against the replication of RSV in blood. And on the right-hand side, you can see that we significantly reduced the number of symptoms following the challenge. Again, the blue being the vaccinated and the gray being the placebo. And if you combine both parameters, we did demonstrate a 79% efficacy against symptomatic RSV infections, which is really some of the best data that's been reported and on top of the immune data that we've already seen really sets up MVA-BN RSV as a very exciting RSV candidate. And really, where we are right now in terms of the competition, it is all about time to market. Every day, we're delayed, we devalue the asset. And therefore, it's important that we start the RSV Phase III as soon as possible. As you go to Slide 17, we have finalized the design with the regulators where we will enroll 20,000 subjects. 10,000 will receive the vaccine, 10,000 will receive the placebo. And we will be looking for a reduction in lower respiratory tract infections between the 2 groups as the primary endpoint. This is a trial that will run over 1 season in -- around the globe, both in Australia but also in the Northern Hemisphere. As I said, it will read out within 1 year. And the overall cost of the study due to the increase in size is approximately USD 250 million. And because of that, we have announced our intent to issue new capital to raise additional funds to allow us to start this Phase III and accelerate the development and time to market. And with that, I think I'll hand over the rest of the presentation to Henrik Juuel.

Thank you very much, Paul. Yes, as Paul just said, I think with the decision to move RSV into Phase III next year, we have already communicated our intention to raise additional capital, where the proceeds from this will go to accelerate the RSV strategy, but also to provide flexibility to pursue potential new opportunities going forward. So from the Annual General Meeting in the spring of this year, we carry a mandate where we can raise up to 10% of our existing registered share capital. And that is the mandate that we are intending to utilize in this situation. We expect to conduct the capital raise in the near future. However, subject to the market developments. And then again, we do believe that this is the right thing to do with a self-funded RSV Phase III trial, we can accelerate the time to market while also retaining maximum strategic flexibility in our pursuit of a partner deal. It remains our core strategy to find a commercial partner for this asset. And again, at the bottom of the slide, just to highlight the expected use of proceeds, the main part of the proceeds will go towards funding of the pivotal Phase III trial, but we also want to use the proceeds to retain our strategic flexibility to pursue an active M&A strategy. So if opportunities combine, we can act swifter and then also the proceeds will be used to generally strengthen the company's capital base. On the next slide, just want to remind you of our guidance for the full year. Revenue guidance for this year is obviously not impacted by any of the announcements yesterday and today. EBITDA, however, we have made or a decision-driven adjustment of the EBITDA because with the decision to move ahead with RSV, we have to spend money already this year to the tune of approximately DKK 30 million to make sure that our CRO, we have worked with for the Phase III can set up the necessary infrastructure to conduct the trial next year. This amount was never included in our original guidance. So therefore, we are making this decision-driven adjustment of the EBITDA. Our cash position, we haven't changed that. But of course, it is subject to the potential proceeds from a planned capital raise. And again, to the right, I think with these announcements yesterday and today, our list of milestones for the next, say, 12 months now will include some very exciting milestones, including final results from the COVID-19 Phase II study, we only [indiscernible] the top line data today. More will come. It will also include initiation of the Phase III trial as well as the initiation of the COVID-19 Phase III. We will expect the initial readout from COVID-19 Phase III already in the second half of next year. So even though we have had exciting news coming out yesterday and today, I think -- we're also building up to a very exciting news flow in the years to come. On the next slide, I think again, just highlighting our bold vision to become one of the largest pure-play vaccines. I just want to highlight here that with these 2 late-stage assets, we actually had 2 potential key contributors to basically deliver on the vision to become one of the largest pure play vaccines. So quite an exciting point in time for Bavarian Nordic. I think we'll end the presentation here and ask the operator to start the Q&A session.

[Operator Instructions] Your first question comes from the line of Thomas Bowers from Danske Bank.

A couple of questions from my side. So just kicking off with RSV Phase III design. So I'm just wondering, is there sort of a cap on the sample size in what we would say, the pre-agreement you have with the regulators on these potential protocol amendments. So if you need to, for example, add another 5,000 patients, is that just pretty straightforward? Or do you need to sort of renegotiate with the FDA, for example? And then just on the cost side. So USD 250 million. I'm just wondering, is there any material changes to this number if you, let's say, need to add another 5,000 subjects if you have lower incident rates here in the Southern Hemisphere initially? And then just on COVID-19, so the Phase III design of course, assuming a non-inferiority randomized trial with an active booster comparison. So I guess it should be pretty straightforward to use Pfizer or Moderna in trial setting, but I guess my question is, is there actually a risk that you will not be able to actually get that vaccine comparator into your trial as I guess most of these contracts are sort of restricted government contracts only. So I'm just curious if you should have any issues and then maybe have to go with an AstraZeneca comparison steps. And then maybe just lastly, just can you maybe just comment on the recruitment status for the 15-microgram dose? And when do you expect readout? Can you come this -- a little bit closer than Q1?

Yes. Thanks, Thomas. Let's see if I remember all your questions. So the first one was related to the size of the Phase III and the cost. So yes, the protocol does allow us to expand the number of subjects. If, for example, the rates of RSV are lower than we had originally anticipated. So the way the trial is designed is that we will enroll, as I said, the 20,000 subjects for the first season. If at the end of that readout, the independent Board believes that we've missed the endpoint because of, as I said, the rates of RSV are too low, we are able, under the current protocol, to recruit more subjects in season 2. It is, however, being designed with one season in mind. Costs that we're indicating includes the cost of the entire protocol and study, including a follow-up phase and also, as I said, potentially expanding the recruitment beyond 20,000.

Just as -- so just to be sure, so -- so the 20,000 subjects, that will be for year one, you will not have more than 20,000 for the first season. Is that correctly understood?

That is correct. Yes. And then the other question you asked related to the availability of a comparator vaccine. And we've highlighted that already, in the classical way of doing a noninferiority study, you would have a randomized trial and that does involve access to a comparator. That -- those discussions are ongoing and different paths are being followed. However, as a backup, we're also in discussions with the authorities about if that comparator is not available in such a setting, to perform the study in a different way. That would allow there a comparison between our vaccine and a comparator, for example, like Pfizer's and those discussions are going on in parallel. So we will do the Phase III, and we will show a comparison to an ab titers and that of a comparative vaccine like Pfizer's. Your last part of the question was an update on where we were with the 50 micrograms. Recruitment is going well. But of course, we're hitting the Christmas period. So I don't want to say too much, but we hope to report data in Q1.

We will go to our next question, and the question comes from the line of Peter Verdult from Citi.

Peter Verdult, Citi. Just a few, please, Paul. Just playing devil's advocate, some cynics will say, Pfizer out there with plenty of supply. So when you arrive in 2023, potentially with a non-inferiority study, how will you differentiate? So can you just -- rather than speculation, can you just remind us -- can you quantify the magnitude of confirmed orders that you have or have not from the Danish government or other governments should you receive approval? I'm thinking about potential differentiation. When is the earliest indication we might get with respect to efficacy against Omnicron? I'm sure you're doing those assays as we speak. And a cheeky add-on to the first question is, you've shown data at 2 weeks. Is there anything unpublished or anything you have that shows antibodies beyond that? Second question, more simple, on RSV. Are you any nearer to fruitful partnership discussions since we last checked in with you at Q3. I'm only asking given we all know on the call that the competitive landscape is pretty tough. A number of competitors are a year ahead of you. And obviously, unlike the COVID vaccine, this for Phase III comes at risk. So anything you can say or characterize with respect to partnership discussions would be appreciated.

Yes, thanks. The first question, which was multiple layers of questions actually. But on COVID. So what could that competitive advantages be? Obviously, we need to generate the data, but what -- to what I'm about to say, but I think there is an urgent need for a vaccine that provides a better or broader protection against variants. And you mentioned Omnicron and no one really knows where anyone is on that yet. But interestingly, with that variant, there's a lot of point -- there's a lot of mutations within the RBD and also with the spike protein, but 4 of those mutations are shared with the Beta variants. And if you remember, Beta, which fortunately they didn't become a major circulating strain, but with the Beta variant, it was up to a 36-fold reduction in neutralizing titers with some approved vaccines based on RNA. And with ours, we only saw a twofold decrease. And that twofold decrease was still at a level that was very high in efficacy. So I think where we sit right now is that we seem to have a very good vaccine, generating very strong responses against all the major variants with the new one, obviously, because we don't have that data, which is something unique compared to the existing approved vaccines. So I would hope that one of our competitive advantages is a broader protection but also a longer-lasting protection. I think the current wave of vaccines are generating quite weak responses and need frequent boostering or at least it looks that way. So I'm hoping we would be able to provide a longer lasting protection and a broader protection. In terms of orders that we've received, we haven't received any orders. I mean there is a mechanism under the funding with the Danish government that we will repay in part on delivery, but that is a decision for the Danish government at some point in time. I would anticipate with the data that we have that becomes more widely available. And going into Phase III, we will start having discussions on preorders but I do not anticipate receiving preorders until the Phase III has already read out. Your other question was on RSV and partnering discussions. I think one of the decisions that we've made is to -- we've said all along that we need a partner, but we need to start this Phase III so that we don't get [indiscernible] behind the competition. As I said, it is all about time to market and the longer we're delayed, the less value there is on this asset, not only for our shareholders but also for a potential partner. So that's why it's important for us to make the decision and hopefully, we'll gain the support from our investors to go ahead alone initially into the Phase III. It takes the pressure of finding a partner, but we will continue those partnering discussions in parallel.

Your next question comes from the line of Frédéric Gomez from Pharmium Securities.

I have 3 on the RSV and 1 on the COVID. Maybe we can start with the RSV. You mentioned the fact that it's important for you to start as soon as possible, the Phase III. GSK started in February this year, a trial in the same group of patients. So I'm just wondering when we could -- when we could see the first question in and how we should see the planning in this because you want to do that in just 1 season. So it's -- I think it's important for you to start the recruitment ahead of the next RSV season. The second one is on the design of the Phase III. I was just wondering if there is a revaccination schedule. Or is it going to be just single dose? Or could we see something with dose at 12 -- months 24, for instance, post dose 1? And just a clarification on the regulatory interactions we had in the past. Can you confirm that? You, of course, discussed with FDA. But I was wondering if you also met the EMA for [indiscernible] advice to get a Phase III design fully validated by both FDA and EMA. And for the COVID, the last one is you are planning an entourage against an approved vaccine. Can we expect, for instance, you to mimic the design of Valneva which decided to run the Phase III against the AstraZeneca vaccine. So are you looking for a specific vaccine or because it may be weird, for instance, to let this choice to investigators to decide between Moderna, Pfizer or maybe AstraZeneca or Johnson & Johnson vaccine?

Yes. Thanks for the questions. Okay. On RSV, you're asking questions about timing. We're sticking to first half of next year. In terms of the -- that would still be before typically the RSV season. However, I would have to say this year, what we've seen is that the RSV season has sort of -- it's not seasonal this year. So I'm not sure that's still relevant. But regardless, we plan to initiate the study in the first half of next year. We're looking at doing a single booster shot in the 20,000 subjects, placebo and vaccine and to try and get a readout within in 1 season. There will be a follow-up phase where we'll follow some of those 20,000 subjects. However, we won't wait for the follow-up to go for a regulatory filing. So we're not planning on booster shots at a later time point, but there will be a follow-up for the subjects over the following season. The other question related to regulatory approvals. And we do have -- well, regulatory approvals. We have an agreement on the protocol with the FDA, as we said before, which is the main regulatory agency we've been focusing on. There has been discussions with the European authorities as well. On COVID and the comparator, I would say, for us, it's important to have a comparator that has been widely approved in all territories. The problem with AstraZeneca as a comparator of course, it hasn't been approved in the U.S. So I would see as a major drawback. So we are looking for a comparator that's been approved in all the territories where we want to focus our commercial activities. And as with some of the other questions already today, access to any comparator is not straightforward when these vaccines have been sold directly to the government. However, I'm quite comfortable with the different strategies that we're pursuing and the support that we're getting from the regulators in their understanding of some of the challenges that we and others actually are facing in terms of doing comparator studies. Obviously, that answers everything.

Yes.

Your next question comes from the line of Gil Blum from Needham & Company.

This is Nishant Gandhi. I am on for Gil Blum. Any comment on how you think the efficacy of your -- the vaccine would kind of hold up against the like future variant? I know it's kind of hard to tell. And if you can tell me like what are the -- I mean, how easy for the company it is to address like additional mutations in terms of modifying the vaccine or any changes if you have to make?

Yes, thanks for the question. So again, I can't comment, obviously, on the new variants, Omnicron, because we don't have data around that yet, and I'm not sure anyone does in terms of neutralizing responses. But up until now, all the major variants of concern that we've evaluated, Wuhan, Alpha, Beta and Delta, we've seen extremely good responses, either in a primary vaccination setting or as we've reported today, in a booster setting. That means that ABNCoV2 is rather unique in this space, in that all other vaccines that I am aware of that are either approved or in development have shown varying abilities to provide neutralizing titers against all the variants I've just said. As I said, the Beta variant, we've seen up to a 36-fold reduction in neutralizing titers by RNA-based vaccines. And similarly for adeno and other base vaccines, whereas we only saw a modest twofold decrease compared to Wuhan. And at that level, it's still in that level that's associated with very high levels of protection. So right now, we are considering that we have a vaccine that's based on the RBD that is providing broader, higher titers than other existing vaccines. Of course, we are evaluating Omnicron or will be as the reagents become available, and we'll have to see where we are in that setting. One of the advantages we have with our platform, not only does it generate strong immune responses, but we have, as a backup, already begun to create a new construct that could be specific for Omnicron, just in case. It does look like a variant with a lot of mutations in the spike protein and in the RBD. So we'll have to see where the data is, but we have as a proportion, already started a new construct. And I would say in terms of how quick we can be, I don't think would be any slower than the RNA-based technologies in generating new constructs.

Your next question comes from the line of Michael Novod from Nordea.

It's Michael from Nordea. Just 2 small follow-up questions, again to the Omnicron. Is there sort of about specific timing also to Pete's question when you could have any data available just so we get some timing straight on in terms of knowing whether you need to do a modified vaccine construct towards Omnicron? And then secondly, also to that, do you have any risk that you have to run clinical trials against other modified vaccine constructs because we have the donor [indiscernible] and others working on Omnicron-specific vaccines? Just tried to highlight the risk that you need to do sort of clinical trials in a different setting than what is already in the plan now?

Yes. Thanks, Michael. So in terms of timing, again, I'm going to fudge the answer a little bit because it's a bit uncertain. One of the assays I talked about was this competitive receptor binding assay that we generated the data for Delta. Hopefully, we will get access to that commercial kit shortly. I say shortly, hopefully, before the end of the year, and that would allow us to run the samples. We're also making the pseudovirus, but I think that will take a little longer. So I'm hopeful that we will have an indication in the coming weeks, but that means coming weeks could mean that we're pushed into January. In terms of the risk for the Phase III, now of course, it's various scenarios, right? So if Omnicron becomes the major variant, obviously, that's the variant that is of major concern. And that's the one that we'll have to be focusing on. If the -- let's, for example, say that we use an RNA vaccine as a comparator, if the current vaccine is not effective against Omnicron, then the comparator will have to be an Omnicron-specific comparator. That's just the way it will be. That's how the world is going to change if this area is actually escaping the current immune responses. As I said, let's see whether we do need to change our construct. I'm still, based on the data that we generated to date, and particularly for Beta, as I said, which shares 4 of the mutations with Omnicron, I think we're hopeful that we won't and that we're still in a good position. But as a precautionary backup, we have already begun generating a new construct, and we'll just have to see how the data pans out in the coming weeks.

Your next question comes from the line of Peter Welford from Jefferies.

I've got 4 questions left. One on RSV, first of all. I guess the question really is why 20,000 in the first place? I think some of your peer trials are already using larger populations than that. Is cost a factor here? Or is it more just your analysis based on your efficacy from the human challenge? And I guess what's limiting the decision not to be the first place for group more to potentially get a more rapid readout given, as you said, time to market is key. And then just 3 on the COVID vaccine. Firstly, just on the 50-microgram dose booster, what sort of potential fold increase or lower fold increase, I guess, would we need to see with that dose for you to decide it would be beneficial to move that forward into Phase III? So I guess what I'm asking is, based on what you see now, what's the hurdle for the 50-microgram to decide that, that's actually a preferred option? Secondly, then, speaking of someone who's had an mRNA booster knows that it feels like, can you talk a little bit about the injection site reactions and the sort of tolerability a bit in the study? And whether or not do you think -- sorry, that over time could potentially become a factor for boosters? And then finally, when you do the manufacturing, are you scaling up manufacturing on the basis of potentially likely to ship in 2024? And I say that just because even though you could be available, you said to launch in '23, I think the majority of '22 and '23 orders and need in the world is probably already met by existing capacity at the moment. So are you scaling up really more from a '24 time frame?

Yes. Thanks, Peter. So the first question was the size of the trial and why is it not larger compared to some of the competition. Well, I mean, again, I don't want to comment too much on the competition. They do their thing. We believe that we can -- due to the -- with the current rates of RSV that we're seeing, 20,000 subjects is sufficient to meet the endpoint. So from our statistical analysis, that is going to be sufficient. As I said, there is some flexibility in the protocol that should the rates of RSV be lower than we thought, we are allowed to expand the enrollment. One thing I would say that the competition is, of course, when they started their studies earlier this year, that was on the back of very, very low rates of RSV. So they may be -- they may have been very cautious, probably rightly so in terms of their estimates of what the rates of ROC were going to be this year. And we're obviously seeing what the rates actually are and designing the study based on that. Then you had some questions on COVID. So the hurdle for the 50 micrograms, that's a good question, to be honest. I think there's 2 things in there. One is I think we've got some great data. Would we want to see -- will we compromise by seeing slightly lower immune responses for a lower dose? I think one of the things that we need to be very cautionary about and evaluate further is the comparative vaccine and the absolute levels that we're seeing with a potential comparator and ensure that we are able to show noninferiority. Based on the 100-microgram data that we've reported today, we are very confident and comfortable in showing noninferiority with the data that I've seen reported for other potential comparator vaccines. The safety profile, I didn't show any data on the safety because the trial is still ongoing. We haven't locked the database and the like. What I would say is it's still well tolerated. We've seen no serious adverse events. However, I would say that the local and systemic reactogenicity is slightly higher than we saw in the primary vaccination setting, where we really didn't see any real signals. Here, we're seeing the usual site reactions in terms of redness, swelling, pain. Most of that is extremely well tolerated. But I would say the reactogenicity is slightly higher than we saw in Phase I. And that's probably expected because we are in a booster setting. And the body is already well primed to the antigen that we're delivering. But as I said, let us wait until all the data is in before we start sharing the safety data. And in terms of manufacturing, you said that we're gearing up for '23 or '24. I think in all essence, our initial capacity is looking at a '23. Having said that, that's because we would be anticipating some advanced orders before we launch. This is a very unusual market where you wouldn't launch and then have your marketing activities to get sales. We believe there could be some significant sales prior to actually filing and launching these products.

Your next question comes from the line of Jesper Ilsoe from Carnegie.

Just a question on the long-lasting duration you have with the ABNCoV2. So my question basically is so you have -- I know VLP technology in general has long duration like Merck's Gardasil. Do you expect similar, say, years of protection? Or do you see this as a different virus that perhaps has fewer years of protection? So basically, what's your base case given the data, the indications you have to date? How many years of protection do you think you can actually have with ABNCoV2? And then I have a question on RSV, so just for modeling purposes, you perhaps answered it a bit with Thomas' questions but just say, potential split of R&D cost in '22 and '23. So just any high-level expectations you can provide.

Yes. Well, the length of protection is an interesting question because currently, the first wave of vaccines don't seem to be inducing very long-lived protection, in fact, very short levels of protection with a booster being required after 6 months. And the question really is, is that due to the virus in terms of SARS-CoV2? Or is that due to the vaccines? As I said, 6 months protection is really rather unique in the vaccine space. Now for adenoviral-based vaccines, we know they don't induce long-term memory. So that fits in. Obviously, with RNA, it's a new technology. We don't know whoever is suffering from not inducing a good memory or as I said, whether it's something specific about this particular virus. It makes it difficult to give you a memory response. Again, however, if you look on the more optimistic side, you mentioned it yourself, the viral-like particle technology is renowned for giving new long-lived responses. So I think we have the ideal platform to generate better protective longevity than the current wave of vaccines. And I think the bar is very low. At the moment, it's 6 months. So I'm hoping that it's going to be several years, but we have to generate the data before I can really start speculating on what it will be. But I hope we can beat 6 months because there is a need. I mean, if you need a booster every 6 months, this is a very unusual vaccine setting. So yes, I hope we can do better. I think we will be able to do better based on the data we already have in terms of the magnitude, but we do have to generate that data. And on the RSV, maybe Henrik, do you want to take that?

Sorry?

Breakdown of R&D costs, I think was the question.

Yes, on RSV, I think what we have indicated is that we expect that the Phase III will cost up to USD 250 million, but that includes follow-on cases happening in '23 and '24. And as Paul said, also, there is room there for potential expansion should the incident rates be below. We are also going to spend money on, say, process development, scale up for manufacturing, et cetera. That's all within our existing markets normally for R&D. So here, we have chosen to be specific on the clinical development costs up to USD 250 million.

Okay. Just one more question on COVID-19. So Henrik, you also out in the media reports saying that since that you will start Phase III here, H1 '22, that's also the time we can start going to dialogue on potential orders with authorities and governments. So given that you potentially not will have, say, proof that you have a longer life vaccine, what do you see as the most important element or advantage when starting negotiations with governments and authorities? So what is the real, say trigger choosing you versus other vaccines? So is it safety? Is it the broader protection or anything in particular that you see as the best, say, advances?

I think we need to provide some good clinical data. And in the first instance, that will come from our Phase II, of course, where we have already presented some really attractive data. But of course, we need to complete that study, get the rest of the data. And then, of course, I think the clinical data in relation to performance against Omnicron will be important, et cetera. So I think in terms of timing, when we can have that dialogue with governments, I think we have had the dialogue already now and then that is to keep them aware of our vaccine candidate. I think those could become much more concrete and specific once we have passed all the Phase II data. And we have sort of, I would say, started the Phase III so that there, as you can see the light at the end of the tunnel with respect to finalizing the clinical development basically.

[Operator Instructions] Your next question comes from the line of Suzanne van Voorthuizen from Kempen.

Sorry, something went not terribly well. First on COVID, and then also I have a follow-up on RSV. But first, the COVID Phase III booster study regarding the noninferiority against an approved vaccine. It seems like you really want that one way or the other. But I'm just wondering, is there a scenario possible that you will be running a trial without a comparison to an mRNA vaccine, but for example, you would purely be looking at booster for baseline. And maybe it sounds crazy, but could the Danish government support that you have to perhaps play a role in accessing the Pfizer vaccine for Phase III purposes?

Yes. Thanks. Yes, as I said, if you go from what is the ideal study from a regulator's point of view, it's a randomized, controlled study where you would have 2 arms, and they like the randomized blinded part to avoid any bias in 1 arm or the other. So that's the ideal. And for that, as we've been discussing, we really need access, physical access to the comparator vaccine, which may be difficult. Having said that, we are in discussions with a number of different regulators and bodies, one of which actually is the Danish government in a way of potentially supporting such a study. Some of the other backup solutions that we're looking at and are in discussions with the regulators is how would we do such a study? Is there a compromise if we don't have physical access to the comparator? And one way that we're investigating as a backup is actually to be in tandem with a government program -- a government booster program where we would get access to individuals going into a government program who would be receiving their booster. That's not as tight from a regulatory point of view in terms of randomization, but those are some of the discussions that we're having. We haven't been as creative just to see whether we can see a significant boost on baseline. I think from the initial discussions we've had with regulators, that wouldn't be acceptable. So they want one way or another to see a comparator. But again, regulators can't ask a company to do something that is impossible. So the onus on finding a solution is also with the regulators as well as obviously lies with the industry as well.

Got it. Okay. No, that's very helpful. And then maybe on RSV, and I'm just wondering if there's more or less an open maiden or the planned capital raise in order for you to meet the time line of starting the Phase II next year. I guess seems like this may cause a bit of an overhang on the shares. So I'm wondering by when this should be clarified. And you mentioned RSV is not really that seasonal anymore. Perhaps you can elaborate on that and provide some color on how COVID changed the incidence of RSV.

Yes. Perhaps I can first comment on the capital raise. I think it is our intention to get that done as soon as possible. So that means in the very near future here, but of course, still subject to how the market is developing. But there's no doubt that we want to conduct this also as soon as possible. So we can get any potential overhang out of this year.

Yes. And on the seasonality of RSV, so as I'm sure you're aware, RSV follows the same store season as flu and other cold like diseases. What we've seen this year is RSV outbreak. So overall, the rates of RSV are increasing compared to what we saw the year before when obviously, everyone was socially distancing and in lockdown. However, what's unusual this year is that we've seen pockets of quite high levels of RSV during the summer months, during the late spring and summer months where you normally don't see high levels of RSV. How that will continue into next year? No one knows. Or will it return back to a more seasonal disease? Again, no one really knows. But how we'd modeled RSV for the Phase III is basically just on the total number of -- on the infection rates. And as I said, we're going during the first half of the year. So we will be in time for the normal season, but if it's not seasonal anymore, then the rates of -- we're taking that into account in terms of the overall rates of RSV.

Congrats on the data.

Thank you.

Thank you. There are no further questions at this time. I will hand it back for closing remarks.

Thank you, everyone, for taking the time to joining the call and for all the questions and interest that you've shown today. So thank you, and have a great day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.