CureVac N.V. (CVAC) Earnings Call Transcript & Summary

Good morning, everybody. I think it's about time we get started. Thank you so much for joining us. As we kick off our Las Vegas Healthcare Conference, it is my pleasure to introduce CureVac. So Franz-Werner Haas is the CEO; and Pierre Kemula is CFO.

Do you just want to get us started about like, let's see a 30,000-foot view of the company. And just a little bit about the RNA technology that you utilize.

Yes. So thank you very much, first of all, for the invitation, and thank you very much for your attendance here. So we are CureVac. We've started the company out of a university spinout of the University of Tubingen. So this was the first mRNA company. And at that time, it was all about, first of all, can you utilize RNA as a molecule to transform into medical application forever, what this could be. And as always, with innovations, a few years later, when we wanted to start in oncology because there were well-defined tumor cancer antigens to be coated on the RNA. It was quite clear that you need to develop also another technology, which is the manufacturing technology because there was no GMP facility available on GMP grade. And so this was in 2006. And all what we produced from 2006 into mid-2020 was homeopathic in terms of dosages. As we all know that RNA really made it into the market as a vaccine for infectious disease because the idea of RNA is really the property is that you can be really fast that you code the protein what you want to, into -- on to the RNA and then get it expressed in the body. And we see it as CureVac -- if you want to play a role in the RNA field, you need to have 3 circles, let's call it circles. The one is the technology, which is not only the mRNA technology, which we can optimize on the UTR noncoding regions on the capping on the poly (A) tail to get a high expression, a longer expression and then also the immunogenicity. And don't forget about that there is a oxide of that one as well, which is the reactogenicity. And then also the delivery, which is crucial there as well. And on the RNA level, you can chemical modify or nonchemical modify, which makes a difference in that you can induce or reduce the reactogenicity. But most probably the T cells are not that much presented. So in oncology and prophylactic vaccines, it doesn't make a difference. The second circle is next to the technology is the manufacturing. And manufacturing today is not a state of the art that you can manufacture like a CMO or CDMO in certain parts, you can, but the manufacturing itself is closely related to your very product based on the TPP, Target Product Profile you're doing. And then the third circle is, of course, the products and where these 3 circles are overlapping, that's exactly where you have got a technology, manufacturing and a product platform. And where 2 of those circles are overlapping this is where the next field of RNA just started, as we all know, will play a role, which is definitely in oncology, the next one to go with, most probably in combination, but then also to start the manufacturing, you need to adopt here as well, which is why we are not only upscaling manufacturing capacity, where we have 4 manufacturing suites, one under construction, which will be ready end of 2023, 2024, able to produce on a commercial scale, but also downscaling. If you want to go into individualized therapies, you really need another manufacturing process where you have within a week, a very, very limited dosage of the vaccine or the cancer vaccine or whatever you want to, which is what we are doing with Tesla. So that's a snapshot of CureVac, which is around about 1,100 people working in Tubingen in Germany as well as in Frankfurt, but also in Boston, and now we opened up a Belgium office. We are NASDAQ-listed, we are very encouraged. Of course, we have no cancer vaccine at the moment out of the first COVID wave. We have been doing this by ourselves, but now we're working on a second generation, which we are doing together with GSK, a very well-positioned partner, a very good partnership. We are doing a flu trial where we have got multivalent vaccines. And there, you can see, again, the technology multivalency, which we need to have not only for flu, but also later on, if you combine it with other kind of infectious diseases and then certainly cocktails of cancer vaccines. So the technology plays your role for the product as well. And then you need to have the analytics and all of that to produce it. And this is what CureVac is all about.

Awesome. Thank you for that introduction. So you've touched on it a little bit, but how do you guys differentiate yourselves? Can you just talk about that a little bit further? And maybe just about also the modified versus unmodified RNA. And what therapeutic areas those must be most utilized for?

Yes. To start with the general point is, again, coming back to my 3 circles. If you really want to play a role in the RNA field, you need to have the 3 circles, the technology, including the formulation, but also manufacturing and then the product to run your own product development because all of that is closely interrelated. And there are not many companies who are doing this. If you compare it then, for example, 2 in this field, also our competitors, of course, companions in the field, which is Moderna and BioNTech, they are working in this field there as well, whereas BioNTech is very focused on oncology, where RNA is one of the tools to treat cancer. Of course, I've got a vaccine developed with Pfizer there as well, which is good. And certainly based also on what we have been doing since 2000. And the same with Moderna. So it is a broad field what one can capture, and this is what we are trying to capture there as well. And therefore, it's a huge potential, and there's certainly it's not all what we can do by ourselves. Of course, if the top line is not bold as with Moderna and BioNTech, certainly, we are looking for partnerships in order to develop this technology any further into products. And there, for example, like with GSK, we have got strong partners, but also niches where we can build on our technology as well. Our focus is always coming from the technology, what the technology really can do and bring it into products combined with the manufacturing.

So what do you look for in partnerships moving forward?

Yes. So what we have with GSK is in prophylactic vaccines, as I said, flu and COVID, certainly. And COVID here, just imagine nobody knows what the virus will be, how the variance will spread. And the idea is really to see on a second-generation backbone, what we have together, and you mentioned it, chemical modification versus nonchemical modification that even now with the second-generation backbone, what we have got in the clinics here in the U.S., running a clinical trial on COVID without chemical modification and we are increasing the dose, which was a bit the limiting factor in our first vaccine where we couldn't go higher in the dosage and because of the reactogenicity, the side effects. And by that, the antibodies, which we have been generating on the Wuhan strain, it was exactly like the convalescent people. So people were infected by Wuhan. And then later on, when the variance kicked in, the antibodies were reduced. And then we couldn't reach the antibodies to be protective for the other variants as well. Was protective in the age of 18 to 50 years but not above, which is, of course, not good. And the second-generation backbone, we see this is changing. And then also in flu, multivalent, I was talking about it. And then with the partnership in GSK, we have got 4 other pathogens we are working on, which we cannot name. But then in oncology is exactly the same. You're looking for antibodies. You're looking for responses, T cell responses and all of that, and we're exploring this very, very thoroughly. And are talking to certain partners there as well to combine even with other technologies to say, okay, is a cancer vaccine only on these -- well, tumor-specific antigens, for example, good enough? Or do you combine it with others. The other one is that you have an off-the-shelf kind of idea that a physician is coming and say, okay, this very patient is needing this and that kind of tumor antigens as a treatment. And this is what you can do because you can produce RNA rather quickly. And the next step is certainly the personalized medicine. And also here, the strength of RNA plays a role because you can manufacture it rather quickly. So quicker, and you're running against the time here as well, like with a vaccine, you're running against the next tumor change and modification. And this is what is possible. But again, together with the manufacturer because you have to adopt this.

Can you talk a little bit about the COVID space, how you think about boosters moving forward and potentially variance specific boosters as well?

Yes. Thank you very much for the question because nobody knows. One thing is what you know is when we started all of this endeavor, everyone thought, okay, this is something which is standing outside your port like Zika, Ebola and all of that. No it came right into our living room, right into the kindergartens. And so therefore -- and we have been dealing here with the German government, for example, on the European level, the same kind of approaches. What is the pandemic preparedness. What -- you know that something will be coming. You don't know when it is and you don't know what it is also with the variants. So with our second-generation backbone, it's -- what we are doing here in the U.S. is to run the first clinical trial on the second-generation backbone, which is nonchemical modified later in the year, it will be chemical modified to see, okay, what is the backbone? Can you do a block and play with the properties on all other variants which are coming, and then also have a technology, including -- I am coming back to it in circles again, including to have a manufacturing capacity there, which rather quickly also including supply chain analytics and all the quality. Are you ready to really be faster in generating the next vaccine, which is needed, and this is pandemic preparedness. The point is it does not go without biology because if you're dealing with the different variants, you will see different immunogenicity of the different variants, not to talk if you're going into another pathogen. For example, we have got a rabies vaccine in development and the rabies RABV-G antigen is much more immunogenic than is the COVID in SARS-CoV-2. And so -- but the pandemic preparedness, and this is why we have now a contract with the German government there as well, to really have a manufacturing suite up and running, including supply chain, which is our industrial scale facility. And then able to produce 80 million dosages in a rather full period of time in order to catch whatever is coming. And therefore, it's also including that you need to invest more in the circle of technology, which is LNPs and the RNA technology in order to be able to cope what is coming. And I think we can do it. If you look back, CureVac has been founded in 2000, all the technology has been developed not only by our self. But at the beginning, it was clearly the fact. And then to be ready at the pandemic in 2020 to have within 1 year a vaccine available, which is making a difference. Otherwise, most probably we would not sit in this room. And this has just started with RNA. And therefore, this is pandemic preparedness, but also preparedness to get RNA into other kind of therapies, and it will change the world.

So how have you been scaling up your manufacturing? You have a couple of new facilities that are about to be on, right?

That's absolutely right. So on the one, we have been -- which we call GP1, 2 small-scale facilities which were for the first clinical trial, and then we have got a GMP 3, which has been supplying our clinical trials, which is also -- we are talking about microgram. So 1 million is part of a gram for dosages. Our dose, for example, also in our COVID vaccine now is 12 micrograms. So that's a goal. And here, we have got the same and that's a goal. We have got the same manufacturing process for small-scale upscale up to the commercial scale that you're not -- again, it's all about time. Truck development is all about the time that you're not losing time by bridging studies and all of that. So it's the same manufacturing process up to commercial, which is important that you only need small quantities. And then the difference to this one is really what we are doing, the RNA printer. It's what we are doing with Tesla. This is really downscale. It's a different kind of manufacturing process, but this process certainly is for individualized kind of therapies where you don't need this upscale. So this is a way behind thinking of this manufacturing circle again to cope with individual products, what you're doing. And therefore, it's so important to have stable backbones and only very limited kind of change is what we're doing on the RNA level because all these changes certainly require the new analytics and all of that. This takes time. But if you have got really the stable backbone for vaccines, most probably in oncology it looks different that you have to adopt here and there. But then you really get fast and this pace, the speed in the development process is also to be covered by the manufacturing.

And then turning to flu because I know we've all had a little bit of COVID fatigue. So how do you think you're differentiated there? And can you provide any thoughts on some of your competitors' data that some might have thought was a little bit disappointing in terms of the overall efficacy?

Yes. Very hard for me to comment on the competitive data. What we have been seeing is and I'll take it really in a very positive color. What we have been seeing with COVID it was exactly not the existing vaccines technologies. Which made a difference. It was the RNA. Rather quickly develop, no one has been seen before. And then just to transform this into flu did not work out in the way that we are getting used to 90%, 95% protection, which in flu never was the case, right? It was between 30% and 55%, 60%, if you are good. But in flu, you have to work again and the work on the technology because here, you're talking about multivalency. You have got more RNAs. And now -- I cannot say how many RNAs are in there. It's quite a valent vaccine, which we have got now in South America in the clinics. But some of these constructs are including the HR, HA, and HN on separate RNA. So you need to build up the analytics here as well. What we have been seeing on the competitive data is certainly that out of a few years, I think 3 years ago, we don't add the first clinical trial, and now what they achieved in the second clinical trial, which they just released a few months ago. It's a major step up. It's a major step up. So on the RNA level, on the technology level, and on the manufacturing level, you can really take more out of it. Are we already there where we have got 95% protection with comparable with COVID? It's not. Is it where a normal -- well, ag-based, protein-based vaccines are? No. But we're just starting. So -- and by that, it is encouraging. What you really can do to be better. Same is true for our COVID vaccine. The first one we have been seeing didn't work out, above the age of 50, but there is improvements to be done. And therefore, it needs much more research, much more technology development going into this technology that we are getting used to it. And then imagine in a world where you can stay, and this is a property of RNA that you can come much closer to the peak of the season than saving 9 months before you're finding the chicken laid the eggs and for -- and in order to do this. And then you're coming much closer in the same facility because we are not working with the actual virus. And this is the same idea with Moderna, with Pfizer BioNTech and what we are doing. That's exactly what you do. So it's a lot of technology going into. And in flu, we are not there. And then imagine the next year because you said we are all a bit fatigue of COVID. And then imagine then you combine it with the flu vaccine with the current, whatever variant of a COVID vaccine. So that's a goal. And the truck development is not bad if you have got a clear goal.

And then how do you think about increasing valency and potentially, let's say, adding in [indiscernible] as well for broader coverage?

You mean from the technology point of view?

Yes.

Multivalency. Yes. Well, the one is that you have in the same while, you have got a different kind of RNAs we've got encoding for the different kind of strain. But then later on, one could think about, and this is also working today that you have got on the same RNA with a linker in between. You have got the different pathogens, which are going to be decoded by the cells. The difficulty is, though manageable because otherwise we wouldn't have had approval for our clinical trial now on flu is the analytics because you have to prove that in every single shot, again, we are talking about single-digit microgram where we started with a dose escalation process. You have to prove that in every single vaccine shot, you have got a different kind of multivalent RNAs. And it is doable. So this is also an all answer technology is improving, but it needs to be a multivalency, not only for vaccines, but also for prophylactic vaccines, but also in oncology, where you have, for example, a different kind of epitopes encoded into this. And this is changing exactly the world of medicine where RNA can play a difference.

And we have shown in preclinical studies that we encoded 9 different antigens, and they were all expressed without any immune dominance. So it goes to show that you could have broad vaccines with a large set of antigens, right, for a better coverage.

Do you think there's an upper limit for the amount of antigens you can add into a vaccine?

Well, most probably today, there is, on the other side, again, there are different kind of modulators. What do you have today? Where are the 3 circles today overlapping? It is you take the RNA, which is available, then you take the chemical modification in order to go higher with the dose to reduce the reactogenicity or not. So in the second generation, we are trying to avoid this. But again, we are doing chemical modifications there as well. And then you need to manufacture. I'm just saying the more you put into efforts into this, you will find other kind of modulators. And this is where we are broadening the technology level where we say, okay, what is it what we can do apart from chemical modification. To decrease the reactogenicity because of the interferon alpha or whatnot. So it's a lot of biology. So if you have got also here the right question, what is it as a countermeasure, what you can do in order to increase the amount? If you're going, for example, in oncology or later on in rare disease, so macular therapy, where you're dealing with higher dosages, where you're dealing with a repetitive dosaging because you're a therapy chronic diseases. So these questions you need to answer them. And the if you have got the right question, there will be the answers. And that's exactly we are working on this technology part very heavily on -- in order to say how can we go higher with the dose, lowering the reactogenicity getting a longer protection. And not to forget about also another area in vaccines, where you have to look into how can you get a better cellular response with memory cells that you get a longer protection that you're not going to be boosted every 6 months, every 3 months or whatever it is. So that's exactly where there are cohorts of people and now RNA made the difference and is in the market. And you can see the community work in RNA to address exactly these questions. They will be a trust, no doubt.