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

Hello, and welcome to the UBS Healthcare Conference. This is day 1. Our next presentation and fireside chat is with Moderna. My name is Navin Jacob. I'm senior analyst covering large-cap pharma and small-cap biotech here at UBS. I'm very happy to have with me today the Chief Medical Officer of Moderna ,Tal Zaks; as well as the Head of Investor Relations, Lavina Talukdar. Tal and Lavina, thank you so much for joining us today.

A pleasure to be here.

Thank you.

Fantastic. Well, a very eventful day for Moderna today and obviously, for the entire market as well. Very exciting news that you had to share with us today. Perhaps for folks who haven't seen all the data, who didn't have a chance to see or listen to your conference call this morning, Tal, if you don't mind, 1 or 2 sentences just summarizing the data we've seen so far before I dig into some questions here around the data set for the SARS-CoV-2 vaccine.

Sure, Navin, I'm happy to. So what we've announced today is the first positive interim results from the Phase I study that is still ongoing. In today's announcement, we described data from the first 3 cohorts of subject aged 18 to 55 that were treated with 25 microgram, 100 microgram or 250 microgram in a prime-boost regimen of our vaccine. The primary endpoint here is safety and tolerability as well as immunogenicity. And at a very high level, what we described is as follows. On the safety and tolerability side, we see pretty much what we expect to see. And this is a mixture of local and systemic solicited adverse reactions. The -- there was no -- nothing surprising here. It's all the things that we've seen before and what one would expect from vaccines. There were no great before adverse events. There were no serious adverse events. What was notable is that we had 3 cases of severe adverse events, but only in the 250 microgram at the top dose and only on the second dose. So on a CMO side, always start with safety. Now the -- I think the news that got everybody excited here is the immunogenicity. And what we've described is that at 25 micrograms already, we are seeing, after a boost, subjects have antibody levels in their blood that are at or above what we typically see in convalescent serum. In fact, they exceed the median point, so the halfway point for people in terms of the antibody levels and people who are recovering from COVID-19 disease. At the 100 microgram, we see, after the boost, clearly a level that is far above that with nonoverlapping confidence intervals, and so we see a very nice dose-response curve across the cohorts. We don't yet have data for the post-dose 2 for 250, just so we didn't go into any depth in there. But it's pretty clear that the prime-boost and across the doses, we're seeing very nice immunogenicity. Now the salient point that I think everybody has been waiting for is not just describing the level of antibodies, but assuring ourselves and the world that these antibodies are what you'd expect in terms of their activity. That's been done with assessing their ability to neutralize the virus. These are now, what I call, print assays, so plaque reduction neutralization titers. This is where you actually have to study live and dangerous SARS-CoV-2 in a BL3 facility. And what we've demonstrated there, or more accurately, NIAID and our collaborators at the NIH with their academic partners, what they've shown is in the first 8 subjects, 4 at 25 microgram and 4 at 100 microgram, the sentinel subjects, which are the only subjects for which we have data so far, all of them have neutralizing antibodies as measured in these assays, they all fall at the top range of what they've ever seen with convalescent serum. And so -- and since we know from their studies and others, that there's a very strong linear relationship between binding antibodies and the ability of those antibodies to neutralize, once you've crossed a certain threshold, the relevance of that data is actually not just that we've demonstrated neutral, I think, in the first 8 that we have, that actually, they allow us to extrapolate and understand the totality of our data. And so to sum it up, I think we're already there at the level of convalescent serum at the 25, we clearly exceeded at the 100. So taken together, these data allow us to now narrow the dose for the anticipated Phase III. Two more points to make. First, we also disclosed data on the first challenge study that has been done. This is in a mouse model of SARS-CoV-2. It's a virus that has been adapted to bind to the mouse receptor. And what we showed there is that at a dose in the mouse that generates neutralizing titers, the same as we see, starting at the 25 microgram in the clinic, that dose is already fully protective of the lungs of those mouse, such that you completely block all viral replication in the lungs. And the second point I'd say is that the totality of these data now caused us to go back and revise the Phase II that's about to get started. And instead of testing 100 -- I'm sorry, instead of testing 50 and 250, we will now test 50 and 100 microgram there, just to continue to build the databases at a dose that we think is relevant for the Phase III. The Phase III is expected now to start in July, and we're working very closely with our collaborators at the NIH as well as at the FDA to make sure that the protocol that we're planning is one that will be effectively executed and will be acceptable for licensure.

That's great. Thank you so much. And so -- that's great. And with regards to the actual level of antibody titer that you're seeing, so is the -- so you're very clear that you're seeing, at least, if not above the level seen with convalescent sera. But what's the actual absolute level that you're seeing, either on a mean basis or max basis? That would be very helpful. And then adjacent to that, your CMV vaccine, I think, demonstrated, if I remember correctly, you demonstrated a tenfold increase in neutralizing antibodies compared to your convalescent patients. How do we think about that level of increase relative to what you're seeing with SARS-CoV-2?

Right. So we're not disclosing the actual concrete numbers here. I think it's -- we're deferring to our colleagues in NIAID and their academic partners, who will publish these results in a peer-reviewed publication. Our goal is that these data are available in the public domain by the time we start the Phase III. As it relates to the CMV comparator, I think, as I said, at the 100 microgram, we clearly exceeded what you see in convalescent serum and with nonoverlapping confidence interval, so we're far above that. I think CMV is a little bit of a different comparator because the comparison for CMV is the level that people live with day in and day out with a latent infection. I think COVID-19, SARS-CoV-2 is sort of a transient acute infection. And so I'm not sure that the biology actually is the right one to compare across. I think the salient point here is that as it relates to convalescent sera that was obtained within a month or 2 of those patients being ill, we're coming in either at the top range of that for the 250 or well above that at the 100. And I think the other point is these assays are still being validated and qualified. They're certainly not standardized yet. So I think it's impossible to take any absolute number and make anything of it, until we get to the point where all of these assays are standardized, which the NIH is working hard to do. I think the other element here is also convalescent serum is not standardized and has a very wide variance in terms of what is seen from very, very low titers to very, very high titers. So I think characterizing these as coming at the top range is accurate, but I think it will require more work for us to -- for us in the scientific community at large to validate these assays and standardize them so that you can actually take any number that anybody would give you, that it would actually have a meaning beyond just what's been run in that particular assay on that particular day.

And so -- sorry, just touching upon the sort of the acute nature of the infection. I guess how do we think about the memory and durability of the neutralizing antibodies that you're generating? We fully -- appreciating it's very early stages. You need a lot more data to understand it. But how are you going about the process of understanding that? What is sort of the goalpost and signpost that you're looking for in terms of data sets moving forward?

It's a good question. And as you say, look, the totality of our experience here is 4 or 5 months old. So nobody knows anything about durability yet because it's a -- it just showed up in the human population a few months ago. I think my sense, and I believe the consensus in the field is that once you have disease and you have antibodies, you no longer are susceptible to disease. I've not seen one credible case report of somebody getting sick after they've already been sick with COVID-19. And so in that regard, at least in the acute period following infection, we anticipate people are protected from being ill and we anticipate that the level of antibodies they have are the primary mediator of protection, just like with other respiratory viruses. And so my anticipation is if we get to that level of immunogenicity, if we get to that level of neutralizing antibodies, then those subjects should be protected. The natural course of immunity is that it wins over time. That's true of a vaccine, that's true of natural infection. That's where the biology of the disease sort of takes primacy over whether you've been immunized or vaccinated. And I just think it's too early. That being said, I also believe that what we're trying to establish for the benefit of the world around us these days is something that will prevent being infected in the next 6 to 12 months. And I think if we got that, we'd all be elated. I think the question on, okay, how long is it going to last, and how long is the virus still going to circulate, and what happens next, I think that's a question for after we get through the acute phases of the development and dealing with the infection here. And I think it's just too early to predict. Now I know...

Makes sense. You moved to...

I will make one final point here, which is as you're developing a vaccine, you can imagine that the higher the antibody titers you have, the longer they last because the half-life of an antibody, I mean, it's just math. And so of course, as we look at choosing the dose for Phase III, for us, it becomes quite a complicated math in the sense that I want to always overshoot and have a nice margin of immunogenicity in anybody I vaccinate. But here, if I choose a dose that's too high, I'll be doing it at the expense of others I maybe could have vaccinated, had I had more of the dose sparing, because I can make more vaccine, and we expect demand is going to outstrip supply here by a margin. So that's the math that's ahead of us in the coming weeks.

All of that makes sense. Do you look to the experience set with SARS 1? I don't know if they're calling it SARS 1, but just the original SARS. The neutral items from some of the literature we've read at least, the neutralizing antibodies, last about 1 to 3 years in the experience with SARS. Is that your expectation as well? Or do you think that this is different enough, where you could have a very different result?

No, I think that's a very fair starting point to have assumptions from. I think as this virus circulates in the population, if it gains a foothold and will be with us for years, then over time, we will learn whether people whose immune response wanes over time become susceptible again. My sort of expectation is that if you have a good memory, whether you've had significant titers as a function of getting infected or you've had a prime and a boost regimen that really kind of cements the ability of your immune system to react fast and furious, then even if the levels of antibodies in the blood sort of decline over time, you should still have enough of an edge, should your body see that virus again in 2 to 3 years, so that the immune system can kick in to high gear quickly enough that you don't get ill. And if you do get ill, it will be the sniffles as opposed the ICU.

The preclinical data that you mentioned was conducted in mouse models, does the SARS-CoV-2 bind well to mouse ACE2 receptor? Just trying to understand the translated -- but how well that translates to what you're seeing in human?

So it does not, and therefore, to have a mouse model, you need to do 1 of 2 things. You need to either minimally modify the virus so that there was -- the spike receptor can bind to the mouse as ACE2 or you need to create a transgenic mouse that has the human ACE 2that can then bind to wild-type SARS. Now both of these models are being used. The transgenic mouse one, I think, has taken a little bit more time, just because of biology started only in January. This one was relatively quick to do because it's genetic engineering in the lab. So this one is the SARS-CoV-2, call it, prime, that's been adapted with a couple of point mutations so that it binds to the neuron ACE2. So it's the first model that was tested. I'm not claiming that this is the model that is relevant for human disease. We will see more data from additional preclinical models in other species that I think are more susceptible to infection with the wild-type SARS-CoV-2 and when infected have a more -- as I said, spectrum of illness that more closely models that of human disease. And so if we are able to prevent that, we will all be more confident in the ability of the virus to prevent disease. That being said, the salient point here is that this was a vaccine against SARS-CoV-2. It was the same one that was tested in the clinic. And in the mouse model, it completely prevented the ability of the virus to replicate in the lungs, which is the organ where the virus causes the most pathology.

And do you -- you guys are doing some very innovative clinical work, preclinical work, just your overall development plan, highly innovative, clearly, running things in parallel. Do you have to -- from the agency standpoint, do you have to run primate studies as well or nonprimate studies? Multiple species? Tests as well prior to filing? Any kind of clarity would be helpful.

Yes. So from the agency standpoint, no, we don't have to run any nonhuman primates per se. I think that the agency's expectations is that we run an efficacy study in the species that matters to all of us, which is a human Phase III trial. That being said, I think that as our data sort of solidifies over the coming weeks and months in terms of being able to demonstrate that we have antibodies consistently at a given dose, that those antibodies at that dose are indeed neutralizing, that those antibodies that are neutralizing at that dose are actually the same type of immune response that you see or even better than what you see with natural infection. And finally, that the same antibodies actually correlate with the ability of the vaccine to protect animals from challenge trials, where those models are believed to be more relevant models of human illness. And if we can make those claims using models and assays that have been appropriately validated and standardized, then I think at a some point, we're going to start to deal with the question of, okay, well, as the Phase III trial is running, are we now garnering enough confidence? Are we demonstrating enough potential benefits that one could start to think of deployment in high unmet need scenarios. And I think that's going to be the challenge in the coming months. So we are absolutely committed to running a large Phase III pivotal trial. I hope that, that pivotal trial will rapidly be able to demonstrate the efficacy and safety -- it will demonstrate the safety irrespective of whether we are able to collect cases or not. But I think in the coming weeks and months, we will also be continuing to learn about the clinical assays and their ability to correlate with the potential for benefit in a way that could be informative to wider-scale deployment.

And should we expect -- with regards to some additional data that you may have seen from this first phase, are you -- is your expectation to see T cell response data from these patients as well as I'm wondering if you have any clarity into Th1 and Th2 immune responses. And associated with that, how are you thinking about antibody-drug enhancement?

So let me make a few comments. T cell data, wherever we have looked in the history of our platform, we have strong T cell responses. They are the kind of help in cytotoxic T cell activity that you would expect from presenting the antigen from within the cell. We've seen that whether it's a cancer vaccine application, whether it's CMV, et cetra. And so that's been consistently seen. I don't know -- I don't have an expectation that T cell data are going to be as informative in the development of a SARS-CoV-2 vaccine. I think antibodies are what count. I think the fact that we boost an [ animatic ] response so powerfully, tells me that we've got T cell help. And I think the ability to measure and quantify antibodies and their relevance to protecting from viral infection in the case of a respiratory virus, I think antibodies are what count. I think we can always -- people can measure and show different aspects of T cell activity. But as opposed to cancer, which is the field I've come from, I'm actually not convinced that they're as informative to any decision we make for the development of vaccines. Now it's been asked, okay, Th1, Th2, what does it mean in the context of enhanced disease, et cetera. So let's -- let me make 3 points. I think when we talk about enhanced disease, I think we confuse 2 concepts. The first is what was seen back in the late '60s with formalin-inactivated viruses like measles and RSV that lead -- led to immediate immune activation of the wrong kind in infants. And I think when you have an immature immune system tipping it over with the wrong antigen, is probably a different story than with adults. That being said, people have come up with models, where you formalin inactivate and that formalin inactivation actually changes the 3D conformation, chemically modifies the epitopes. And by doing that, you can actually generate a model of that enhanced disease in rodents. And we have, as part of our development for HMPV and PIV3, we've actually run our platform and our antigens head to head against those formalin inactivated. And we never saw any of that enhanced disease phenotype that's been described when we have that positive control, at least in the case of HMPV. We're doing all the preclinical work that the agency expects us to do to demonstrate that, continuously generate the right type of immune response. They wouldn't have let us go to Phase II if they didn't think that the data so far substantiate that. And I'm sure that we will be able to demonstrate that as well as we go into Phase III. I think the other element of enhanced disease that people talk to has to do with heterologous prime-boost. So you're boosting -- you're priming with one antigen and then you're coming in, and you're boosting with something that's close, but not quite the same thing. And so the type of antibodies you get is more binding than neutralizing. I don't have any basis to expect that here. I've described to you data that are consistent with all of the antibody responses that we generate. Whenever we see it, we see very strong neutralizing activity. And I don't expect that to be an issue here. It's a theoretical risk that we will monitor as part of routine clinical development. And so remember, there is no real case definition for enhanced disease because it's disease. So you collect your cases of disease when you do a randomized Phase III, and you assure yourself that the vaccine is actually beneficial and that puts that to bed. So in a nutshell, we're doing the preclinical work that puts everybody at ease. So far, everything has been going the right way, and we haven't seen any signal that makes us worried. We'll do all the right things as part of the pharmacovigilance as it relates to late-phase development. But I haven't seen anything up to date that's keeping me up at night.

And there have been some cases of slight variations in the site protein. I think, a group out of California has put out a preprint on this. Wondering how you're thinking about that relative to neutralizing ability?

Yes, it's a great question. We're following that closely. I'd make 2 points. Number one, to date, none of those mutations is predicted or has been shown to alter the immune response or the effectiveness of an immune response. That's generated with whatever strain you take, that was around in January and is the basis for our vaccine. So it's neither really predicted to change it in any material way nor has been demonstrated to do so. That being said, should we find ourselves in a world where there's another strain circulating or another strain that's taking over because we now have immunity against the first one, be it by vaccine or by disease, I think we'll be very well suited with our platform to react very quickly to any change in strain because we'll basically just take the new sequence and put it in. And having built the manufacturing and scale-up capacity, then turning out a SARS-CoV-2 prime that is better adapted or matches completely, whatever new strain is out there should be straightforward. And if anything, I think the experience with the first one, anticipating to demonstrate benefit and/or safety and efficacy, then I think we, as a company and a platform, are going to be very well positioned to kind of enter in a flu-like era, where you don't need to repeat your entire clinical development because it's close enough, you've already proven the principle. You just take the new sequence and you plug it in. Now in flu today, it takes us about 6 months. And so we look at the Southern Hemisphere, then we get ready for winter here. I think with our platform, it will take you much less than 6 months, and we've already demonstrated that within 2 months, we can go from a sequence to dosing the first subjects, once we have scaled up manufacturing, I would expect our ability to react to any change in variant to be on the same time scale.

Certainly, that is one of the very attractive features of your technology. Very exciting times, for sure. Just on the data we saw today on the patients themselves, do you have any color on some of the characteristics of the patients that are in these cohorts that you read out on? Any -- particularly as it relates to some of the risk metrics that folks are particularly interested in, whether it's CV disease or risk thereof, of -- for CV disease, any kind of color would be helpful.

I'm sorry, what kind of disease? I'm not sure I followed the question.

It was just some of the comorbidities. I'm just trying to understand the patient characteristics of the cohorts that you read out on today.

So this was a Phase I -- so this is a Phase I and for Phase I, you always want to pick people who are not at risk of infection nor are they at risk for having severe disease, should they get infected, because you want to be able to understand the immunogenicity as your primary readout. So these are fairly healthy people. I think the next 2 cohorts in the trial are going to be elderly. So they're going to be at risk for more significant disease should they get infected, but otherwise, they should be fairly healthy adults in elderly or older adults and elderly. The same, by and large, is holding true for the Phase II population, where we expect them to open it up and sort of mimic the real-world usage, is going to be in the Phase III, where we'll make sure to include enough people who are over 55 or 60. We're going to make sure to have a diverse population that's representative of the population that would ultimately need it, whether it's by comorbidities, age, ethnicities, et cetera.

And are you -- with regards to how you -- how we think about potential efficacy in older elderly cohorts, is your expectation to have different doses or formulations for the older elderly cohort?

At this point, no. We have limited experience in the older adults. So what we do have stems from our experience for RSV a few years ago, where we didn't really see any difference between adults and older adults. I think the biology of this vaccine and the way it teaches sort of the body's own cells to make the protein that holds true, whether you're 8 or 100 years old. It's true that certainly the immune system -- our immune system ages and changes over time. And so we're going to have to demonstrate that and show those data. But I anticipate that we should be able to immunize older adults and the elderly just as well. We're in the process of proving that, obviously, with the extended cohorts in the Phase I.

Right. And overall, how -- I realize, fully realize, a very difficult question to answer and very broad. So appreciate you attempting this. But how are you thinking and how is the agency thinking about the balancing the need for speed with ensuring safety and efficacy? Especially as you think about not just an emergency approval or emergency use authority approval and whether it's end of this year or beginning of next year versus a broad approval for the general public.

So I would make 2 points. I think, first, launching a true pivotal Phase III trial is going to be key. And following that trial for cases so that we make sure that at the first possible interim, we can take a look and get an early signal even if it's not fully fleshed, it's going to be important. I think the next piece, sort of the flip side of that is no matter how many data and how big the trial is, the unmet need here is going to be huge and the wish to deploy the millions of doses that we're manufacturing is going to be very palpable. And so we need to come up with a way that ensures us that as we are deploying this to the public in such an era of unmet need, that we're actually doing our diligence in terms of pharmacovigilance and watching carefully for the safety of that deployment, so that we're able to accurately describe ultimately the benefit-risk proposition for this vaccine. So I don't think it's a black and white, in other words. I think there will be more and more data. There will be a need to continuously monitor the safety first in early trials, placebo controls and later at whatever mechanism we find for deployment until it's deployed to sufficiently large numbers that we can sort of get a sense that we fully understand and have characterized the safety and efficacy of this vaccine. That being said, I think these early signals today, where we demonstrate that we indeed have neutralizing antibodies at a dose that is completely achievable and we believe should be innocuous in terms of widespread utilization, is really the critical first step down that path.

And so wondering if you could help us sort of map that, and fully understanding that it's complete data dependent on what you see from the Phase II. And as the regulatory environment changes, totally understand that this is a very fluid situation. But, so I think we -- you originally had talked about a potential emergency approval in the fall. But I think in the Q1 call, you said you may have interim Phase III data by year-end '20. Are you still expecting emergency authorization based on the Phase II data? And then just help us map out sort of the -- sort of all things going right, how this plays out? Because this is the key sort of question that we get. I'm sure you're getting of how -- what's -- what are the time lines and goalposts that happen over the next 12 to 18 months?

So this is really a question better directed at FDA than it is to me. Because ultimately, it's going to be their call. It's going to be the call of CC and BARDA. I will tell you my understanding of their position. And so I caveat it. I believe I'm reflecting it accurately. And what I've heard is that they believe the basis for any emergency use or other wider spread utilization should be at a minimum, interim results from an efficacy trial. I think Tony Fauci is on record as having said that, as is Peter Marks. That being said, I don't think they have excluded the possibility that there would be a path for an accelerated approval here that is based on clinical assays. I think their hope and my hope is as well, is that by the time we really have qualified and standardized the clinical assays and have proven the utility in the right preclinical models and have standardized convalescence sera to understand where our dose is landing, we would have that first interim read of a pivotal trial. If the read for a pivotal trial is delayed, but the other factors do start to come into play, I think that's a dialogue we're going to have to have with the agency at the appropriate time.

And with the last minute here, what is the -- how are you thinking about the likelihood of this regimen being potentially an annual vaccine versus a one and boost? Any thoughts around that?

So I'm pretty confident that at least for pandemic utilization, prime-boost is where you want to go. You don't want to leave any immunogenicity, so to speak, on the table. That is sort of basic immunology. It's true of almost every immunogen that's being studied. There are some vectors out there that cannot boost because they generate such strong immunity to the priming that by the time you come in with a boost, the antibody is going to vector block all protein expression. And so they try to get as high a dose as possible during their priming with the hope that, that will get you to those levels required. I think for our platform, time and again, we've demonstrated that a prime-boost gets you a response far above that which you get with natural infection. And so I think in the context of a pandemic, that is the right answer. You're trying to get the most immunogenicity that you can. You're trying to prevent disease, even mild disease, even infection, perhaps if you're able to achieve that. And all of that will have a massive implications, not just for the people you're vaccinating, but for their contacts and for society at large as you start to improve herd immunity. As it relates to an annual vaccine, sure, I can envision a world where you come in for just the booster in a once every, I don't know. I think it will depend on longer follow-up, understanding what waning immunity means, what is -- what are the kinetics and how much at risk do you then -- how much of the risk do you reassume a year 2, 3, 4, 5 out from having had -- having been immunized or infected, such that you would require and benefit from such a booster shot. I think it's way too early to make any predictions on that.

And with that, we've come to the end of our session. My name is Navin Jacob. I really want to thank Chief Medical Officer, Tal Zaks of Moderna; as well as the Head of Investor Relations, Lavina. [ Who looked out] for their time today. I want to thank all the employees at Moderna, who I'm sure are working extremely hard in this unprecedented time. Thank you so much, Tal and Lavina.

Thank you for having us.

Thank you.

Take care. Bye-bye.