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

Hello, and apologies for the slight delay. It's now my pleasure to introduce our fireside chat guest, Dr. Stephen Hoge, President of Moderna. So Stephen, thank you for joining us today. [Operator Instructions] So to start off, Stephen, would you provide a brief couple of minutes of introductory comments on Moderna to frame for us where Moderna is today relative to where it was last year when you guys presented at our conference?

Of course. Well, first of all, thank you for the opportunity to present and join you today. It feels like -- it may have only been a year on a calendar, but it feels like it's been a couple of decades in all of our experiences since I last had a chance to speak to the conference. I -- where to start? It's hard not to say the word COVID when talking about what's happened to Moderna over the last few years, but I'm going to try and make that my last sort of comment in the news of the past year for us. We had an opportunity just this past month to present at our R&D Day some of the major milestones that we've gone through. And I'd highlight 4, 1 of which will be COVID. The first was our progress with our cytomegalovirus vaccine, and we spoke about that last year. That is our -- up until this year had been our most advanced vaccine program. I'll remind you that is against a huge unmet need, the #1 cause of birth defects -- infectious birth defects in this country. And it was in Phase II -- just about to start Phase II at the time that we last spoke. We've now completed the first interim analysis of that CMV data and showed that it looks just like our Phase I. We've actually locked in on the dose that we're going to be carrying forward into Phase II as a 100-microgram dose -- sorry, Phase III. That's a 100-microgram dose. And all things looked as good or better as we would have hoped for coming out of the Phase I. So it's a really successful outcome from our perspective in the Phase II data set for CMV. And now we're planning for Phase III in 2021, which will be a major milestone for us as a company. It would have been even bigger had it not been for, I will do it now, number two, which is in our infectious disease portfolio, our COVID vaccine where we, as of now, have enrolled over 28,000 subjects. We're trending very quickly here towards 29,000 subjects. Almost 20,000 of them have received their both vaccinations and a very large number of them represent a diverse set of communities. So 33% of the enrollees in that study are from traditionally underrepresented communities, minority communities in the United States. That study there, as a reminder, is a 30,000-person study, so we're almost 95% of the way recruited. And I'm sure we'll have more questions about that as we go forward and talk about that. So I won't go into more detail, but it's going very well, and we're pleased to provide that update. Talking about enrollment in the Phase III means we must have gone through Phase I and Phase II, and I can -- we can -- we've had a number of recent publications come out about the Phase I data. A New England Journal of Medicine article came out just last week covering the elderly data there, which we're also very excited about. So everything looking good as that program rolls forward. And operationally in the Phase III study, we're feeling very good about where we are. The 2 other pieces of news that I'd highlight is that Moderna is not only an infectious disease vaccine company, and those 2 programs are representative of many others, but there are other things happening. And in particular, just this past month, we had a chance to present one of our therapeutics programs, which is the chikungunya antibody program, mRNA-1944 for those who follow it, where we showed safety and repeat dosing, second dose of that antibody program, where, again, in this case, we're putting 2 mRNAs into a lipid nanoparticle, injecting as an IV infusion and causing subject to make their own antibody. It's predictive, we think, of the types of pharmacology we're going to be seeing in our rare disease and other therapeutic programs. And it was wonderful to see that a second dose actually had beautiful dose-dependent pharmacology, repeat pharmacology and the tolerability of that second dose was exactly like what we saw with the first dose, which I'll remind you at 0.3 mpk. That sort of target dose was generally safe and well tolerated. So we're pleased with that. And then the last thing I'll highlight, fourth thing is we've continued to make progress in oncology portfolio. And so we highlighted just this past month presentations at AACR and ASCO that had happened in the preceding year showing some translational data. We have 2 major modalities there. One is an intratumoral immunotherapy modality, where we're trying to turn the immune system on against cancer. And the other is a cancer vaccine modality, which is in Phase II. It's partnered with Merck. Both against KRAS, and we're running a randomized Phase II study in melanoma as well. And both of those continue to make good progress. We got a chance to highlight some of that data, as I said, in AACR and ASCO presentations, and we'll look forward to continuing to provide updates, but we're quite pleased with the progress in cancer as well. So that's an overview. I'm sure we're going to talk about COVID a little bit. So...

Yes. So thanks for the high-level overview. So I'll -- I'm going to jump in with COVID, and then hopefully, we'll have time for the other things as well.

Of course.

I already see the questions pile up on COVID. So -- yes. So in terms of the vaccine, from your perspective, in terms of the data that you've presented thus far, what do you see as the key differentiating points versus some of the other RNA vaccines as well as the other modalities that have been developed?

Yes. So I'll start by saying, clearly, we are hopeful that all the vaccines are going to work. And I think we don't know enough about the thresholds of what's needed. So anybody who's going to be giving you the sense of what they're excited about, relatively, it's challenging. But what am I pleased about the data we have that's been published clinically so far? I think the fact that we have a safe and well-tolerated dose that is producing a multiple above convalescent sera in neutralizing antibody titers, which we demonstrated first in healthy adults in the Phase I and then subsequently have seen that translate into the elderly populations, including the 71 plus, which as you would have seen in the New England Journal article last week, we're at a multiple above convalescent sera across a range of live virus assays. And again, tolerability and safety look to be appropriate. And so we're quite pleased by that. Those neutralizing titers are not the only thing that you matter -- matters in an immune system. But the other most important thing, we think, and certainly are the kinds of correlated protection that most commonly get looked at. The other things you look at are T cells, both CD4 and CD8. And if you look in the deep appendices of those -- of that paper last week, you'll see that we generate productive CD4 and CD8 responses, including in the elderly populations, across -- in the vaccine, which means that you're getting a really balanced immune response. And the degrees of those things are always hard to measure absolutely because they're very assay-dependent as opposed to the antibody-neutralizing assay. But they feel really productively good. And I think the thing that I take the most optimism from is looking at the consistency of that immune response, looking at the consistency across individuals, but across ages, and comparing that to the types of neutralizing activity the vaccine has shown in animal challenge models to be sufficient to protect against diseases, both primate and rodent data that we've published as well in the last 6 months, showing what levels are protective and showing minimum levels at which we do believe that we will be able to provide a benefit, certainly have in animals. You start to get very optimistic that everybody that's received our vaccine has cleared those levels, including the older adults. And that would mean that had they bounced into the coronavirus going through their normal day is that they might have been able to prevent COVID-19 as a disease. And so those are the sort of things that focus us. Relative advantage or disadvantages, look, we're proudest of the elderly data. We think it's really quite strong. We're also really proud of the fact that we can dose at a very high level and see good tolerability of that. But a lot will depend upon the Phase III clinical data. At this point, it's enough conjecture, and it's down to what kind of efficacy we can demonstrate in the Phase III study.

Great. And so in terms of that Phase III trial, can you remind us of the kind of event-driven analysis structure and what that could mean in terms of time lines to data and potential scenarios, if you could, on efficacy on that initial interim readout, et cetera. I know you've gotten this question before.

Yes. So 30,000 people -- 29,000 people are in the study now. And as I said, most are now -- have received their second vaccine are starting to count against the primary endpoint. Our primary endpoint starts the counting 2 weeks after your vaccine. There's a secondary endpoint that looks at any time you had it, but 2 weeks after boost, so day 43. And our primary -- our first interim analysis on the primary endpoint -- or I should say, the primary endpoint is defined as symptomatic COVID-19 disease. And it's not just mild. And so there's a set of specific criteria that you have to meet. They include having an abnormal chest x-ray or an abnormal CT scan in 1 example, or having 2 symptoms, like fever and shortness of breath. So we deliberately designed that case definition, so that somebody with incredibly mild disease maybe -- barely symptomatic may not meet that as easy if you pick that up by PCR. And then you confirm that disease with PCR swabbing, and that's a case that's happened on the study. And obviously, what you're all looking to do is see whether there's an imbalance of cases towards the placebo and, hopefully, a much lower number of cases, maybe 0, we'd hope, but at least a lower number of symptomatic cases in the vaccine arm. So our first interim analysis is set at 53 cases, second interim analysis is at 106 and the final analysis is at 151. And those numbers were set based on when you'd have 90% power for being able to see different types of vaccine efficacy. At the first interim analysis, we'd see -- we have a coin flip, a 50-50 shot of seeing a vaccine that was 75% effective, right? So one way to think of it is, if the vaccine is much better than 75% effective, 85% or 90% effective, you have a good shot of seeing in that first interim analysis. Conversely, if the vaccine is just 75% effective, just by chance, which is still a very good vaccine, your odds of seeing it in that first interim analysis are not perfect. In fact, they're literally a coin flip. It could be tails. And still, you would have a very good vaccine. That's why you do the second interim and ultimately, the final. By the final analysis, we have a 90% chance of being able to see a 60% effective vaccine. And so they just think of that as a curve and it falls down. Now the thing we cannot control, all of that thought, all of that design, DSMBs and all the statistical planning, we can't control case rate. We can't control the rate at which people are getting infected in the study, let alone in the country. And so that's the big unknown for every one of the vaccine manufacturers. If you look at the epi, that's happening in the sites -- so we picked geographies where we believe the R0 was above one and has to generally stay that way, but you had to pick those places in July and we're in October, November. And so you have some uncertainty there. And then we try to pick -- we try to make sure that anybody enrolled in the study was at high risk of infection. So there's -- the investigators need to make sure that people have a high risk of infection. But not everybody does. Some people might get the vaccine and just go home, and literally quarantine and try and play it safe. Just [ fine with their progress ]. If you follow the epi at the geographies where we enroll people and you sort of project forward and say, let's just say that we're getting cases at the average rate of those places where you've enrolled patients, then we look forward and say, sometime in November. It could be earlier. It could be very late October, end of this month, but sometime in November feels like a sweet spot where you might expect to see 53 cases have accrued in the study. And counterintuitive thing is that the better the vaccine is, the longer it will take because if all 53 cases have to come from the placebo arm because the vaccine is 100% effective, then it will actually have half as many people accruing cases. So it doesn't necessarily mean that if it takes longer, it's a bad news. It might actually be good news or it might just be nothing at all. But that's something that we're going to be looking for as we kind of go forward. Everything we've seen to date convinces us that's still a reasonable assumption. That is also when our average or median case in the study -- median participant study will have past 2 months post their boost, which is a nice sort of body of safety database that's been talked about that everybody wants to see. So the 15,000 subjects will pass that median date sometime in the very end of November. And so it feels like November is the month where a lot happens, but it could be December. It could be the very end of October. It's really beyond our control. It's subject to the virus and people.

Great. And so then you mentioned the 2-month follow-up, et cetera. So in terms of the potential scenarios, if we do see efficacy at that 53-patient -- 53-case time, so what are the -- what's the bar for an EUA? And how are they -- what's the latest and how regulators might be thinking about that?

Well, that is one that is really only in their minds. I mean they've been very transparent publicly, but the bar will have to be whatever the FDA decides it should be. And based on the totality of the data, I do not envy the awesome responsibility they bear as scientists, as clinicians, but also as people responsible for public health because the effect of what sounds like a simple decision like, well, it's an effective vaccine or not, will be millions of people getting vaccinated, maybe hundreds of millions of people. And the difference will be a mix of how confident they are in that decision as well as how it's scoped. And so I think we should all give as much time and space as possible to the FDA to make that deliberation as best they can and not lock them into any answer before they see that data. What we'll be looking for, I can answer that for ourselves, is -- look, we're going to -- we've statistically accepted and endorsed in our protocol the idea of 30% lower bound. And therefore, we're hoping to see -- at 53 cases of vaccine, it's at least 75% effective. If it doesn't happen, then we haven't met our own prespecified criteria, right? Now if the data is otherwise somehow overwhelmingly clear, like, let's say, that it -- the only cases were mild or not even really mild, just incidental, then maybe you can have a following conversation, but it's going to be data based at that point. So for now, we're aiming, per the criteria, at 75% or better efficacy as a minimum bar. And then obviously, you need to see a tolerability and safety profile that we think is going to be consistent with all of our prior experience, which would justify an emergency use authorization. But to be fair, we need to keep following those people over time because you will only really have a median follow-up of a couple of months, 2 months, which is not a huge amount. Now given the risk-benefit of corona, I think we all understand why most of us would accept that, but we'll have to continue to follow safety over time. So that's our own bar and sort of thinking around it, and that's what's in the protocol.

Now in terms of data from the COVID program overall, I'm seeing some questions about timing for when we might see data from the Phase II program.

Yes. It is one of the very strange things about corona. You might have an interim analysis on Phase III prior to the Phase II data coming out. The Phase II data -- sorry, the first interim analysis data that we're anticipating might actually be about the same time. It really depends upon completing enrollment dosing, and then there's 2 months of follow-up that we'll do in those cases -- in those folks. We are obviously there looking at immunogenicity, tolerability and safety and looking at a larger cohort of numbers. We don't have any reason -- we don't have the data yet, but we don't have any reason to believe it's going to be anything different than our Phase I study. The tolerability and safety was looked at by a safety monitoring committee and the FDA as we had it as we started the Phase III study, so that was comforting. But obviously, we'll get unblinded data when it all happens. But I would expect it to -- this being an absolutely crazy year for all of us, it will probably happen almost nearly at the same time just by chance as we go through that. But the Phase II, at least we can say with more confidence, it will happen in that window. The Phase III interim analysis is dependent upon the virus and infections.

Got it. And then just another quick one on the COVID program. Looking kind of beyond just acute pandemic phase, how do you think about the market and competitive dynamics for COVID vaccines in 2023, 2024 and onward, where that's going to be kind of a different need?

Yes. Endemic is a great question. Is this -- what does this market look like after we've, hopefully, stopped the pandemic? And look, I think nobody knows for sure, but I do think that there's a couple of -- there's sort of bookend scenarios. One is that you sit there and say, there's just -- it's gone. We're done. The virus is beaten, right? And I think the other is this idea of an influenza-like continually mutating pathogen that we're constantly fighting and protecting folks with. I don't actually subscribe to either one of those. I end up personally in -- somewhere in the middle, which is that I do think that there are viruses. Respiratory viruses are very good at infecting people. I mean, like, literally, we secrete them and that's why they circulate. And you don't have to go to influenza to see that. You can see that in the coronaviruses or in things like RSV and -- respiratory syncytial virus, which circulates quite a bit in human populations. We tend not to develop perfect immunity to these viruses, right? We tend to actually just pass them around. It's just that for large parts of our life, we are able to control that infection without ever really getting sick. You can have RSV, and it just -- if you're a healthy adult, it kind of moves through you, no problem. And I think -- but what happens though is as people age, and I think RSV does become a model here, you end up with a high risk of actually severe disease because as your immune system starts to weaken through immunosenescence, you get to your sixth and seventh decade of life, RSV can actually become a life-threatening infection. People do die. Older Americans and other people across the world do die as they get infected despite the fact that they were completely immune. For 50 years, they were immune. They were protected for 50 years in their life from severe infection and disease there. So I kind of think that coronavirus, personally, ends up in that category. It's a potentially lethal virus, if your immune system loses its ability to get ahead of an infection. It's going to circulate. There's going to be reinfections. Most of them are going to be asymptomatic, but it's going to be something where, as people age, we're going to watch closely that correlate of protection, and we're also going to want to be providing an endemic booster to protect those folks. And so the places where I think an endemic market feels like it's going to exist is in the young -- the very young who are going to be seronegative because they're born and in the very old who -- or otherwise immunocompromised that we're going to want to protect with boost.

Great. So I'm glad you gave the overview before because we're definitely not going to have a chance to talk about everything. But to make sure that I have a chance to ask, I'll pose the question I'm posing to all of our participants, which is, from your perspective, what do you think the market is missing about Moderna as a company today?

Well, I think it's a matter of attention, and there's only so much attention you can put on a company. And to be fair, I think there's been a lot, and we've had more than our share of maybe -- around corona. I think it's the relative attention, therefore, that I'd highlight. I think people do understand Moderna around the coronavirus vaccine, have become introduced to it. I think we've lost sight of the other vaccines, cytomegalovirus, starting Phase III next year. It's a terrible pathogen. I think it's an incredible moment for our company. And I think it's a huge blockbuster opportunity if we can be successful, hopefully, in preventing those birth defects. And the -- and so I think it's probably, first and foremost, that -- the rest of that infectious disease pipeline. And then the second thing is, I don't think people recognize our ongoing efforts in oncology because they're later -- they're going to come out more slowly. I mean, to be fair, oncology is much more of a long road to hope, particularly in the earlier stages. And so while I think folks are aware of them, what's happened in this past year is they've come closer into readout. We'll see how it goes, but I think that's something that I hope -- fingers crossed, we have to see, but I hope over time, becomes a positive surprise to folks is that oncology portfolio has continued to develop. And then the last thing I'd point to is the rare disease portfolio where we work really hard and actually, in the near term, hope to be moving multiple programs into the clinic and that therapeutics pipeline will readout on the back of the success of CHIK MAB and we think we do understand that pharmacology, 1944 is that program I mentioned before. And so I hope Moderna positively surprises people in 2021 as a company with CMV starting Phase III, and hopefully, around the corner, oncology data coming and then rare diseases and therapeutic starting to really show some signs of benefit, and people recognize that mRNA is not a COVID vaccine technology.

Got it. So from your perspective, right, those are the ones that you think, outside of COVID, might be likely to drive value for Moderna in the next few years.

I do think those are the ones that are likely to drive value in the next few years, yes. I think that's a place where -- well, you and others would have been writing notes a year ago based on a story that sounded like that. And it hasn't gone away. It's continued to progress.

Fantastic. So I see we are actually overtime for a minute, so I will end the session here and thank Stephen for participating and for the great discussion.

It's my pleasure. Thank you for having me back this year.

Absolutely.