Moderna, Inc. (MRNA) Earnings Call Transcript & Summary

Hi, everyone. My name is Gena Wang. I'm a mid-cap biotech analyst at the Barclays. I first hope everyone stay healthy, and I would like to thank all the participants, investors, companies and especially our event team and corporate access team, who made this virtual health care conference possible. With that, I would like to introduce our next speaker, Tal Zaks, Chief Medical Officer from Moderna. Tal, I'll hand over to you.

Thank you, and welcome, everybody, to our webcast. I hope you're sitting next to a fireside -- I was promised this would be a fireside chat. So we'll do it virtual. Slide 2 is our forward-looking statement, which is basically the Moderna's interpretation of an old Biblical saying that, in modern times prophecy has been given to fools. So to the degree I'm making forward-looking statements, please note that. On Slide 3 is our notion of what mRNA is and why we have been so excited to move this forward as a new class of medicines. Just thinking about the large product opportunity of enabling us to go after proteins for therapeutic intent that are intracellular and membrane bound; the understanding that since it's a digitally encoded platform, once you succeed once technically, your technical probability of success goes up very quickly, and I'll show you concrete examples where we've already proven the case; the ability to accelerate our R&D time lines, which I think has nicely been given a new proof point with coronavirus; and the sense that we will have -- we expect to have greater capital efficiency over time, given the same fundamental building blocks go in every product. On Slide 4 is sort of a mapping of this, the potential world of this new class of medicines. And the way we think about it is really this allows us to dissect the notion of technology risk from biology risk. So mitigating risk is what you always try to do in biotech. And for us, the notion here is encapsulated in trying to think on these on 2 different axes. I think of the technology risk as our ability to translate an amount of protein at the tissue of interest, and so prophylactic vaccine requires you to do a smidgen of protein at a muscle we injected maybe at a local lymphnode where it gets transported. And you only need to do it once, twice, maybe 3x with a booster. And then as you go progressively to the right, you see applications that are now taking either mRNA into new locations, taking higher levels of -- or expecting higher levels of protein and ultimately expecting systemic administration and systemic circulation or intracellular expression of proteins. So that's kind of the view of the technology risk. On the biology risk, put simply, this is the question of what's the probability that once we translate a protein we can make a drug or a vaccine out of it. And I think for vaccines, that is obviously the most straightforward. That's why it's the lowest on the y-axis. And then as you go up, obviously, whether a cancer vaccine translates into efficacy is a higher hurdle, whether encoding for VEGF in the heart will actually help ameliorate post MI fibrosis is a higher hurdle, et cetera. And so that's how we think about the spectrum of opportunities we have and why, really, we have diversified our portfolio and placed a strategy of really going after multiple modalities or various of these stacks, if you will, on the x-axis, by doing things in parallel until we can actually derisk and know that, from a technology perspective, we've achieved our goal. On Slide 5, really sort of brings you up to speed on where we are today or at the end of last year, which is for 2 of these modalities, we now believe that we have achieved the fundamental proof-of-concept for the technology risk side of the equation. In vaccine -- infectious disease vaccines, time and again, we've been able to show that with an acceptable safety profile, at least as shown in Phase I, but we've now run 9 of these trials and we've treated over 1,000 subjects, and we understand the emerging safety profile, we haven't seen anything unexpected, indeed, in that context, we're able to generate immunogenicity. And we can do so not just with simple antigens, which is what we started for, for things like flu, but actually more complicated antigens. Zika and Chikungunya are viral-like particles; hMPV+PIV3 is a combination of 2 different respiratory viruses, albeit relatively simple antigens; and finally, cytomegalovirus and, as we'll talk about, EBV in the future, these are complex antigens that require multimeric protein complexes to be formed together. CMV has a pentamer complex of 5 mRNAs coming together or 5 proteins coming together to form 1 antigen. And there's actually 6 mRNAs in that vial. And so we've shown time and again that we can induce immunogenicity. So for us, this is obviously one place where we want to pile on and now do more. And the systemic secreted modality supported by the results of the Chikungunya monoclonal antibody, where we, for the first time in scientific history, have been able to teach a human body to make a monoclonal antibody to therapeutic levels by just giving the instructions at the mRNA for how to make the protein and then be able to measure circulating systemic levels of that protein. In this case, it's a monoclonal antibody. So it's a complex protein. It's got a heavy chain and a light chain that still have to come together and get secreted. So on Slide 6, sort of this explains our strategy as of today, which is basically to say, okay, in these 2 modalities, where we've seen the proof-of-concept for the technology and we're starting to see the ability in terms of pharmacology to take drugs forward, whether it's immunogenicity for vaccines or systemic therapeutic -- potential therapeutic levels of protein for the systemic secreted modality, this is where we actually want to double down and do more. We continued to explore the other modalities to see what our ability there is to translate that opportunity set into concrete drugs, and I'll come back to that in a minute. So let me jump to Slide 8 and sort of give you an update on our vaccine franchise. And I promise you, yes, I will talk about SARS as well. But before I do that, let's step back a little bit. Last year, I think the big reveal for us was the potency we have against cytomegalovirus. We actually exceeded our expectations there. We had reached levels that are higher in people who've never been exposed and the level of antibodies that circulate than those that already have been exposed and are thus, to a good part, already protected from transmitting this to babies. And so that success was quickly followed up by a Phase II. We've completed enrollment of that Phase II, as we recently announced, and we look forward to the data expected in the third quarter. We're already on -- have spun up the activities to plan for a pivotal trial to start next year for Phase III, and that will be to show the prevention of infection to women of child-bearing age. The other vaccines we have in play, hMPV+PIV3 combo, is in a Phase Ib age deescalation. That's ongoing well. We've recently announced our pediatric RSV. Merck has an RSV that's in Phase I. We have the rights to do this in the pediatric setting with the explicit expectation that we will be able to combine a pediatric RSV with an hMPV and PIV3. And I'll come in a minute to the rationale behind that combination. And finally, we continue to work closely with BARDA to develop the Zika virus mRNA. This is a legacy of the 2016 sense of a pandemic and wanting to make sure that the public is able to be protected in the future should that come back. In terms of new development candidates, obviously, the coronavirus is top of mind to everybody, and I'll come back to our plans on that. We also are moving forward with an EBV vaccine. EBV, like CMV, is a herpes virus latent infection. Like CMV, the antigens there are thought to be components of a multimeric complex. And again, if we've done this for an antigen that has 5, we can probably do this for an antigen that has 3. And so the ability to protect people against infectious mononucleosis and, potentially down the road, the other significant sequel of EBV are what are propelling us to put this one on the board as well. Slide 9, let's talk a little bit about the SARS-CoV-2. So pretty much as soon as the sequence was known, our team got together with the NIH to align on the sequence for a SARS-CoV-2 vaccine that would be mRNA based. The advantage for us is: Number one, we already have a platform that we know is immunogenic, we think we understand the safety profile; number two, we've been closely working with the NIH now for the past several years on better antigen design as well as pandemic preparedness. We've obviously been working for several years now with BARDA on Zika. And so we were actually down there back in October, talking to the leadership of NIAID to figure out, should we do a demonstration project for the U.S. government to show the ability of this platform to react rapidly. And unfortunately, that was a bit prescient because we now have the real-world opportunity in which we actually need to do this. So that's one element. And the other one is, our fundamental platform is actually digitally encoded. So we don't actually need the virus to get started. We don't have chicken eggs. We don't have other technology that requires this. All we need is the sequence. And since we had good experience with our personalized cancer vaccine for a rapid turnaround time, which we've been doing now for several years to supply those patients who've got metastatic disease with a custom-made just-in-time vaccine just for them, our ability to do this in a relatively rapid turnaround time was already proven. And so that led to our ability to align with NIH quickly on what the sequence would be, have an optimized sequence to a preferred confirmation or stabilized confirmation for the Spike protein. As an aside, in the past, the NIH team has already shown that our technology, when encoded for a Spike protein of the MERS virus, works in preclinical model in terms of protecting mice. So there was a lot of background and say, "Yes, we should do this and we should move quickly." We had agreed with NIAID that the NIH would run the first Phase I, and so that's on track. The IND now has been opened. We've been able to manufacture this from start to having it in the vial in about 25 days. We've been able to ship it out under an open IND in 42 days. And we're waiting for the first patient -- or, I'm sorry, the first subject to be dosed by the NIH. So that's where we are there. On Slide 10 is the EBV opportunity. As I mentioned, this is the cause for infectious mononucleosis, a disease that's debilitating with significant morbidity. That's sort of the tip of the iceberg of what you see clinically. This then becomes a latent infection in many of us for the rest of our lives. It's associated with subsequent sequelae of lymphoproliferative disorder, cancers as well as multiple sclerosis. Now those are long-term sequelae. Our initial clinical path to approval will obviously not prove a benefit on that front, but we should be able to prove the ability to prevent infectious mono. Similar to CMV, there has been a vaccine in the past that did only one of these, the gp350, in a clinical trial and showed the ability to reduce infectious mono. That program was eventually abandoned by GSK, but it proved the concept that one could actually do this. We believe that with not just gp350, but the ability to put in the other complex antigen, gp42/gH/gL, we can prevent additional cells from being infected. And potentially not just prevent infectious mononucleosis, which is the clinical sequelae of having your B cells infected, but actually prevent the establishment of a latent infection with all the other sequelae down the road. So that's what we've started working against. On Slide 11 is our RSV program. I think this is a very well-understood unmet need. There's still no vaccine out there in the market. On the right panel, you sort of see why we're excited to do this in combination with hMPV and PIV3. As a clinician, when a kid shows up or when a toddler shows up with a severe lower respiratory tract infection that's viral, it's the -- if it's not flu, it's one of these 3. The clinical disease is indistinguishable. And so the ability to potentially move a vaccine forward against this disease, whether caused by RSV, hMPV or PIV3, is obviously of interest. I would note that we have demonstrated the immunogenicity that we had hoped to demonstrate in initial Phase I titers against all 3 of these, whether it was Merck's RSV program or our own hMPV and PIV3. And all of these are sort of membrane-bound relatively simple antigens. From an mRNA standpoint, of course, the ability to encode for a pre-fusion stabilized confirmation supports your ability to actually get the right kind of antibodies made that would be neutralizing to the virus' ability to infect cells. I'm going to jump to Slide 13 to tell you about the new development candidates we have in our secreted and cell surface modality, again, following on the success of our Chikungunya monoclonal antibody program, where we were able to transfer passive immunity by encoding the monoclonal antibody. We're actually now taking this to another therapeutic area. IL-2 is a very well understood molecule. It's the first recombinant ever approved after insulin, at least for cancer, and we now understand how different forms of IL-2 can preferentially upregulate regulatory T cells. So we're going to move this forward. We think you only need very low systemic amount. So we should have the potential to actually achieve the required pharmacology with subcu administration. Because this molecule is so well understood, and because of the vast experience on IL-2 in human in clinical trials and in actual practice, we should be able to actually do this even in a healthy volunteer population to define the pharmacology. And then we will explore in which diseases it makes more sense to move it forward. PD-L1 is a little bit of a more complicated target. Here, the goal is to express the ligand on the surface of cells, and we should be able to get both in the myeloid compartment and potentially into hepatocytes with an IV administration, and so we could turn or increase -- decrease autoreactivity. So if you think about a disease like autoimmune hepatitis, which is notable if you read the labels of any checkpoint inhibitors which inhibits PD-1 and PD-L1, you can see that they have a propensity to carve autoimmune hepatitis. If you look at people who have idiopathic autoimmune hepatitis, not drug-related, there is some emerging evidence that the PD-L1 access is relevant. And so for us, this is an opportunity to try and see whether we can actually change the balance between tolerance and autoreactivity in cases of autoimmune disease, starting with autoimmune hepatitis. So that's the game plan here. In terms of the ongoing work in our exploratory modality, on Slide 15, just to quickly run through everything else we have in play. Our personalized cancer vaccine is in a randomized Phase II. This is just for the treatment of adjuvant melanoma. It is going with KEYTRUDA against KEYTRUDA alone. KEYTRUDA is a well-known and validated drug in that setting. It has a label there. Merck is working on the KRAS vaccine, our KRAS vaccine that will be moved forward also in combination with KEYTRUDA, and that trial is ongoing. We have several opportunities to see if we can slip on the switch for an immune response by injecting mRNA encoding for various cytokines directly into a patient's metastatic tumor to elicit what's called an abscopal effect. These are all being done with AZ's PD-L1 inhibitor. The 2 programs that we have that we're in Phase I and continue to move them forward are either OX40 ligand alone or OX40 ligand as part of a triplet with 2 other cytokines, IL-23 and IL-36 gamma. And AstraZeneca is conducting a similar study. This is with mRNA encoding IL-12 in combination with durvalumab. So these studies are ongoing. And as soon as we have a cogent body of data, we'll share it. VEGF, there's a program going by AZ, trying to get mRNA encoding for VEGF into -- directly into the heart so that we can sort of kick start the body's own healing mechanism by promoting vascular endothelial growth factor and, thus, angiogenesis at a time when the heart has just withstood an ischemic insult. So this should prevent fibrosis and improve contractility and, thus, decrease the clinical sequela of congestive heart failure post myocardial infarct. We've got 2 diseases in the systemic modality that have the IND. We've got the first patient we're following closely and hope to be dosing soon on MMA. That's methylmalonic acidemia. It's part of a pathway where another defect leads to a very similar clinical phenotype. That's propionic acidemia. The IND for that is open as well, and we're in steady start-up activities. So that's where we are today. Our mission stays to deliver the promise of the mRNA sciences. I think the recent coronavirus has given us a clear opportunity to demonstrate the inherent speed in this platform. I believe it's got the potential to demonstrate immunogenicity. It is a relatively simple antigen. We've demonstrated immunogenicity against similar antigens in the past, both in preclinical models against close cousins or in the clinic against more distant respiratory virus cousins of this scrooge. So we remain committed to figuring out how to move this forward. Let me conclude my soliloquy here and happy to take any questions.

Thank you, Tal. That's very helpful. Maybe I will start with the coronavirus vaccine since this is being on everyone's mind right now. How similar are the Spike proteins among SARS-CoV-2, MERS and SARS? And could this -- could your product be potentially a broad anti-coronavirus vaccine?

Yes, it's a good question. So the similarity is roughly close to 80% with MERS and about -- I'm sorry, with SARS and about 33% with MERS. Whether that's enough for cross-protection, I don't know. I would note that there are actually 4 other coronaviruses that have names made up of our chain letters and numbers that I can never remember, but these, together, account for 10% to 30% of sort of common cold symptoms that people show up with that are relatively benign. So it's unclear to what degree cross-protection here will be afforded. But, frankly, I think the #1 goal everybody has is to protect against CoV-2. It seems to be much more infectious than either SARS or MERS.

So for the CoV-2, have we seen any mutations yet?

None that I am aware. It's a good question, I think, people are asking that, but I'm not aware that anybody has described mutations.

Okay. And for the Phase I trial, the -- given rapid evolving situation of COVID-19, what could be the fastest time frame to clear Phase I? And then could you walk us through the potential regulatory path for the next steps?

Yes. I think in terms of time line, look, you're going to want to immunize at time 0 and 4 weeks later, and then you're going to want to see what the antibody levels are 4 weeks after that. So from start to finish, there's a minimum of 2 months here. That's just -- you can't run the clock faster. As soon as we start and complete enrollment or the NIH does, then you'll get a sense of when you expect the readout after the last subject comes in for their month 2 visit. They'll need to collect bloods and analyze it. So that gives you a sense of time line for the first data. Your question on the regulatory path, I think that's still an evolving landscape. In our discussions with the regulators, nothing is off the table. It could be, there is a potential if we, NIH and the scientific world develop an accepted surrogate of protection that you could envision an approval based on that. That being said, typically in diseases where there is enough of a pandemic threat and actual cases happening, regulators, both in the U.S. and elsewhere, expect you to show efficacy, i.e., show you're preventing infection or disease. I think at the end of the day, look, the FDA has one relatively straightforward paradigm it always operates on, which is benefit risk. And I think if the presumption of benefit here will be greater than the concern about risk, then that will accelerate time lines for approval. I think it's too early to be more precise than that. Nobody yet has any data, and the epidemiology of this is still evolving.

So for Phase I, you would test the 3 doses, 2500 and 250 microgram? So what kind of data will you be looking for to clear Phase I to select dose move to next step?

So we'll be looking for safety and immunogenicity, just like we do for every Phase I. Our experience with our platform has been that we can be efficacious with doses -- or, I'm sorry, I shouldn't say efficacious, immunogenic for doses as low as 25 microgram. And that was seen in one of our flu attempts. If you look at the hMPV+PIV3, there's also a very quick plateauing from early doses, although that may be more of a boost than a prime case. And so we've -- and if you look at our CMV data, clearly, you can see very nice immunogenicity when you go 90, 180. And that's a complex antigen. So the actual amounts of protein that you're making there, obviously, are much smaller because when I cite the math of the mRNA, that means that it has to be divvied up by 6 different mRNA chains. So I think it's a fairly potent platform. And that's why I think within this dose bracket we expect to see immunogenicity clearly. It's always nice to reassure on the safety of any new product. So obviously, you need to follow safety and look at what the overall safety and tolerability profile is. And once we see those, we'll be able to move forward.

Great. And then for the Phase I, will NIH fund the clinical development? And also down the road, if the government's funding certain parts of clinical trial, like if approved, how would the pricing be determined?

Yes. This is where I refer you back to my forward-looking statement. I feel a little bit like a fool. The truth is, I don't know, right? So it's very clear that we would need a public-private partnership here in order to be able to move this forward. Congress has earmarked funds. The President has signed it into law. And so we expect that BARDA will be supportive through the U.S. government. There are other bodies that are also coming to play here. CEPI was the first that showed up actually, enabling our first manufacturing for this Phase I. And for that, we're super grateful. So this will require a private-public partnership to develop. I can't speak to NIH's intent, but we clearly intend to leverage the ability to continue these partnerships and expand on them to move this ball forward as fast as we can. And I think our track record here working with BARDA on Zika, they have a good familiarity with our platform, what our mRNA is capable of doing. So I think that positions us well to continue the development here.

Okay. Great. And just one quick question regarding the CMV vaccine, the Phase II interim analysis expected in 3Q, could you remind us the type of data we will see? And what would you define it as a success?

So I think the first interim is the one that will show us the immunogenicity post dose one, post dose 2. Success, for us, will be able to clearly delineate a dose that we -- that has both the immunogenicity on one hand and now a better validated safety and tolerability profile so that we and regulators all feel comfortable moving that dose into Phase III. And since I include regulators here and the stakeholders, obviously, success here is going to be our ability to move into Phase III in agreement with the regulators. So once we have the data, our plan is then to have meetings with the regulatory authorities to move it forward.

Okay. Great. Thank you very much, Tal.

Thank you. It's been a real pleasure. And stay safe, everyone.

Thank you. Thank you, everyone. This concludes our call.