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

Good morning, everyone, and thank you for joining us for our CEO conference. We're really to pleased have the CEO of Moderna, Stéphane Bancel, with us here this morning.

And with that, Stéphane, maybe a first question here about the journey that the company and yourself have gone through. But last year, we saw true validation of the mRNA technology platform as the COVID-19 vaccine 1273 was both created and became your first commercial asset. Could you discuss what the journey has been like for you, as CEO, and what the last year has meant for the company?

Well, good morning, everybody, and thank you, Salveen, for having me. Happy new year, everybody. So we started the company almost 10 years ago now with the idea of using messenger RNA to make protein inside the [ body ]. At the time, many of this was quite [ real ]. When I first heard the idea, I thought it was crazy and it will never work. But the piece that got us quite excited about giving it our best shot was what it could potentially do for patients over time, and we thought about decades, not 2 months or 2 days, but what it could do in 10, 20, 30 years for mankind and for medicine. And we thought that if it could work, it could be a new entire class of medicine. We knew the odds were, of course, against us. We thought that, probably, in terms of success, was very, very low at the time. But we say, if it works, it's going to be really worth it. And if it doesn't work, well, we have tried. And the piece that really excited us is this notion that because mRNA is an information molecule, we basically would use either the human genome or the genetic information of a virus as raw material, [ you code it to the person ], and then you brought it again. And the piece that was really sort of key about the idea is the product opportunity will be [ giant ] because you could not only make [ super good ] protein; you could make transmembrane protein; you could make intracellular protein; you could make antibodies, potentially; you could make, eventually, vaccines, and then you could combine things. The notion also was intriguing for us, and particularly, is because every one of us has thousands of mRNA molecule in our cells, in water. We know it's possible in nature, so we said if it's possible in nature, there should be a way to figure out how to produce that in the body. We did not know how many we could do, now we're at -- up to 6 mRNA in the clinic right now. And we feel we could do -- should be able to do much more than that. And so the product opportunity and the impact was very intriguing to us. And so then we set up the journey to say, okay, how would you build such a company on a brand new technology given the technology risk on top of the biology risk? That is of course true for every drug discovery project. And so we went after deciding with the team and the Board that picking 1 drug and taking 1 drug to the clinic was actually extremely risky and most probably not very wise because of the unknown-unknown: On the technology and on the biology. And so we built a portfolio, a bit like when people buy stocks. If people knew which stock will go 100x from now, no, it'll be very easy, just buy 1 stock and wait. But because nobody has that insight, of course, people build portfolios to manage risk, and that's exactly what we did. We build a portfolio of now 20 different medicines that we'll say to take in the clinic almost in parallel to manage the risk. And so of course, 2020 was an incredible year that my head is still spinning. I don't think I've fully appreciated what happened in the last 12 months because I know the year started with this new virus ahead of the first days of January before even it had a name or sequence online. And given I've been in infectious disease for 25 years of my life, I was really intrigued. I reached out to Dr. Tony Fauci at the time and his team, that we would work together on this. And then it became pretty clear to me towards the end of January that we were most probably heading for Spanish flu-like pandemic based on the data we're seeing and [ probably is ] respiratory virus which spread very quickly. And so we've brought the company into high gear, we said here, the game plan. We had to do a Phase I just to see how quickly we could do a Phase I with the NIH. It's most probably the wrong goal. The goal is how do we take this as fast as we can to placebo-controlled phase III? I mean, people know already how this plays. I won't go through what happened last year. But indeed, for us, it was quite a year where we ended up the year with -- on December 18, the EUA granted by the FDA, product was shipped over the weekend. We announced yesterday that we have already shipped 18 million doses in the U.S. We also got authorization in Canada just before Christmas, and we shipped right away to Canada that same day. Yesterday, we got -- last night, the authorization in Israel. And we have submitted, back in November 30, in around half a dozen to a dozen countries, the same filing. I would expect it in next days and weeks many more countries approving the vaccine and us following up. We are on track to deliver between 600 million and 1 billion dose in [ fiscal year '21 ].

Then following up on that, Stéphane. With regard to unlocking value here with 1273, what components of the mRNA story may investors be overlooking when you think about the general platform?

Yes, so I think there's 2 things. One is the read-across to the vaccine franchise. Because we use the same chemistry to make the mRNA molecule, the same manufacturing process, the exact same [ composition ] in chemistry [ step one ], the same formulation process, the read-across to the oral vaccine, in my opinion, is incredible. And if you look at the portfolio -- we'll give a bit of an update Monday at the JPMorgan conference. But if you look at the portfolio, we are focused on first-in-class vaccine. For CMV, just one example, we believe is a $2 billion to $5 billion annual peak sale vaccine, first in class, no vaccine on the market. Every woman in the age of bearing a child in this country, in Europe and all the developed world should get this vaccine. So when the birth defect that happens if a woman is infected with CMV when she naive to the virus. And there are many more like this. RSV, hMPV/PIV, a lot of names that a lot of people don't know that actually are harming humans right now. And so I think the value to the vaccine portfolio is extremely high. Unlike traditional pharma where you have no correlation between drug A and drug B, here within a vaccine portfolio, there is incredible correlation. And another piece, I think, that investors sometime underappreciate is that in infectious disease, animal model are very productive. As we all know, in cancer, there's almost a check the blocks exercise. It's not because you see tumor shrinking in mice that it means it not going to do anything in humans. But in infectious disease, if you work with the right team and keep the right animal model, there's a very, very high correlation. I invite people that are curious carriers to go back and read the Nature paper this year on the COVID vaccine in mice with the New England paper about COVID vaccine in nonhuman primate, then look at the Phase III New England journal paper, and you will see the correlation is incredible. And it is true. CMV, go back and look at the CMV paper in monkey and in mice and look at the Phase I and Phase II data, it's exactly the same thing. And so I think that's the first set of value that is, I think, not really appreciated, including programs that are not yet in development. Because the read-across is that the -- with the programs we are working on in research, as we've said for many years, we are not sleeping on our laurels. There are 80 new viruses, 8-0, that hurt humans that have been discovered in the last 40 year. They exist today. [ No ] approved vaccine against for it, of 80. So there's still a lot of work that we have to do to protect people. And then it's on the rest of the platform, we have 5 immuno-oncology drug in the clinic all combined with the commercial checkpoint, either KEYTRUDA or GeoVax from AZ. We have a very exciting Phase II program in cardiology with AZ in VEGF. I personally believe that VEGF should work in the clinic. It works beautiful in the pig model, which is a good predictor for cardiology for humans. The Phase I data published in nature looks also very encouraging. We see an increase in blood flow in humans, meaning we have pharmacodynamics of the molecule. The safety profile is pristine. There is no elevation of liver enzyme, no cytokine, nothing. And so I'm very excited about this one. And there's a rare disease. And then there is the role autoimmune chapter of a Moderna [ actually ] that's going to start very soon. With us, I think the autoimmune program's [ incredible ].

Great. And so when you think about the use of the large amount of cash that you're going to end up having on your balance sheet in 2021, how do you intend to allocate this capital? Should we expect significant expansion of the prophylactic vaccine modality in particular? And then how are you thinking about the other 5 modalities?

Yes. That's a great question, and we have spent a lot of time in the last few months thinking about it with the team with the Board. A bit of context for people. Yesterday, we published our 2020 shareholder letter, in which we disclosed that at the end of September, we have $5.25 billion of cash. That's for our standard interim numbers, but just to give people a sense. And because we have -- COVID vaccine is going to generate cash this year, we anticipate ending to 2021 with a very strong cash balance to way north of the $5.25 billion we have [ right now ]. So indeed, the question is, how do you allocate this capital to create a value? I had the chance to join Moderna, it was a $25 million company, as employee #2. The market cap has grown significantly. And since the day one, every day when I walk in my office, like I did this morning, the question I ask myself is, "Okay, how do we grow 10x from here?" So I asked myself a question yesterday, and I have a long meeting with Stephen Hoge, who run the science, and asked myself again the question this morning. So I think obviously, vaccine is an obvious one. As I said, there's an incredible unmet need with those 80 viruses where we want new vaccine approved, for which the mRNA platform, we believe, is very well adapted. The CMV vaccine has 6 mRNA per dose. The EBV vaccine has also several mRNA in the vial, it's a very complex virus. So I think you should expect us, as we've been saying all along, to scale up very quickly because we have a platform where we believe the technology has been derisked. So vaccine is obvious one. We have an EUA-approved product with Phase III north 94% efficacy. So we know these vaccines, the vaccine platform is very solid. The other one that we're going to invest quite a bit, it's our second core modality. It's systemic and secreted, basically the chikungunya antibody program that we first shared a year ago and then we shared the repeat dose in September of 2020. We believe that this technology also, in our eyes, is derisked from a clinical standpoint. We know how to safely repeat dose and with human and get the repeat pharmacology as we repeat dose into human. And we think this opens a very broad area for Moderna. Autoimmune disease is one product area we're going to go pretty big into given the still very large unmet medical need and a very big market opportunity. Antibodies is another one, but also cardiology. As you know, we have a relaxin program which is quite interesting. So I think over time, you would see us also being pretty aggressive in investment in that modality because it's key risk. Then we have 4 what we call exploratory modalities, meaning those are modalities or application of our technology that we are testing in the clinic. They look good in animal, but the only issue that we really care about is, of course, human. And so what we're trying there, because of the risk, is to not put too many bets on each of those applications until we have clinical signal. And so these, we're basically waiting for the 5 oncology program with VEGF and rare disease that I spoke about. So this, I think, we're going to stay very careful on investing capital at risk. But what we are doing in the meantime, Salveen, is because we have a platform and we can make around 1,000 mRNA of preclinical amount, we're investing a lot in new stuff because, really, the investment amounts are very small. But you can save a lot of time if you can get the development candidate ready, let's say, in rare disease or autoimmune, and you just hold that asset, wait for clinical signal. And if you have good signal, then you -- it could flip 3, 4, 5 more asset in the clinic right away. So this, we are doing. And the other piece we are doing is to expand the number of modalities. Today, we have 6. We believe that over time -- and again, I'm quoting in years, not in weeks. But over time, this company could have 10 to 20 modality, like the vaccine, of very big, multi-product, dozens of product modality. One that is discussed quite a lot with investors is the lung. We have been working now a few years with Vertex in how to deliver via an aerosol via the mouth, mRNA into the lung. We started, of course, with Vertex around delivering the CFTR protein. And the goal with Vertex is to go after those kids that do not respond to Vertex current approved product. There are around 10% of the kids that do not respond. So this program has made a lot of progress. Vertex has been very happy and has continued to expand the relationship, get it to a place where we can safely take this with them into the clinic. And of course, the only rights that Vertex has is CFTR, where everything else in the lung belongs to Moderna shareholder. It can be lung disease, it be cancer in the lung, it could be infectious disease. So you could think about doing antibodies going direct into the lung or a very high load of antibodies into a lung because we're doing a systemic antibody like we do for recombinant. There's a lot of ideas like this that the team is playing with, and we're also investing in more modalities. The other piece that also we are exploring is gene editing. And we announced a second partnership with Vertex in around cystic fibrosis September of last year or 2 months ago, where we are exploring with Vertex, which we find very intriguing, the notion to use mRNA to code for the gene-editing system. As we all know, Cas9 is a protein, an enzymes, so it's a protein, where mRNA can put container to the dose. And so there is no scientific reason why you could not code the gene-editing system we decide to use, being Cas9 or another one, into mRNA and then add a piece of DNA you want encapsulated in the same delivery system to bring into, in this case, the lung, the gene-editing system to do its job. And that's, I think, an important piece. If you think about it and you step back and look at the company, we're basically a company with many, many vertical and we're adding more as we speak. Once a vertical works, it becomes a very big franchise because all the technology used is 100% the same. The only thing that changes is the sequence of a new profile, the 0s and 1s, the collectors of life on the message. But because the raw material we use is known in nature, it exists, so you don't have the toxicology risk you have when, let's say, you invent a new small molecule that you don't know how it's going to behave in nature. This comes from nature, either in human protein or the protein of a virus. And so we have basically become a delivery company. As we know, in gene therapy and RNAi and mRNA and gene editing, the challenge of all those nucleic acid technology is delivered. Because, of course, once you're in the right cell, if you design your system correctly, if you have a pure product, it's going to be [ a scrub ]. That's molecular biology. So the key science is delivery. And so if you look at our investment in science over the last 5 to 7 years, I would say, 60-plus percent of our platform investment have gone into delivery systems. And so we have become pretty good at delivery. And one also picture of mRNA, which is not always understood by observers of the company, is the ability we have with mRNA to turn it off if it's in the wrong cell. If you design a delivery system, let's say, to target the lung, but if it goes into the wrong cell into the lung, because of course, the lung issue has made of a lot of different cell, what we can do in the mRNA, in the back end of it, we can basically code complement with gen 2 natural RNAi present -- microRNA present into the cytoplasm of those cells. And if the mRNA goes into the wrong cell, it will hybridize with the microRNA present in that cell. And basically, the risk complex will turn. And basically, we make that the mRNA does not make protein. So you can basically turn off our drug if it ends up in our own cell. And so that gives a lot of leeway to basically design therapeutic index where you design a delivery system that goes into a few cell bag because it's very hard from a biology standpoint that a delivery system goes only to 1 cell type. But if it goes to 3 or 4 or 5 cell types, and then you can enjoin into the product the mRNA, how to turn it off in the cells where you do not want to express the protein. So I think it's a very, very important feature that I think increased the therapeutic index and reduce the chance of tox of the mRNA [ within ].

And what would we expect then to be reported in terms of data from your pipeline this year?

Yes. So as you know, we don't guide precisely, but I can give you a bit of a sense of where things are. I mean, with 5 immuno-oncology drug in the clinic, I would not be surprised if we have some immuno-oncology data this year. One that I'm very intrigued about, and I know a lot of clinicians are, is the personalized cancer vaccine with some of the signal we saw in head and neck, HPV-negative that we presented at SITC at the end of 2020. it's a small cohort, it was in an exploratory Phase I. But given the signal we are seeing, which is ways stronger than another pair of a checkpoint monotherapy, we're chasing that signal very quickly. The PIs are very excited by what they saw in the clinic. And so we're expanding that cohort. If that signal were to be confirmed, we'll work very quickly with the regulator to figure out how do we run a very quick pivotal to get this potential approval quickly. Given the low efficacy, if you look at some of the data, around 16% of which responds. And so I think there's a lot of room there to improve patient care pretty materially. So that's an exciting program. In our VEGF program, we spoke about a minute ago in cardiology, that I said I'm very excited about, is in Phase II. While it was slower footing initially, AZ leading the clinical study, it has picked up steam. And so is it possible that we have Phase II data of that program this year? I think it's a possibility. We are getting the rare disease program into the clinic. Those, as we all know, read very quickly. Some of the biomarkers for the MMA or the PF program can be read out of a simple blood row with standard biochemistry marker in a matter of hours after injection. That's what we see in the animal model, is we see the response within the 2 hours. So we'll have to start lowering dose and try to find the dose. But when you find the dose, you know it pretty quickly. And then if you find the dose, we will expand that broad very quickly into potentially a pivotal as well. That's another thing that could potentially move very quickly. If you see what we saw in animal reproduced in human, that could be very exciting because there are a lot of rare genetic disease where the root cause of the disease is a protein deficiency in the liver, inside the hepatocyte. And so we have a few programs in the clinic, but we have many more in the labs that are ready to move to the clinic if we were to see signal. And then the autoimmune disease. If you think about the ability to combine agents to do a cell membrane. One other program I'm extremely excited to see in the clinic is the PD-L1 program. So it's not an antibody to PD-L1, it's the flip side of it. It's PD-L1 protein. That's what we are doing. We're injecting it IV, and it grows into immune cell, and it's made inside the cells and is designed as a transmembrane proteins which attach on the outside of the cell. And it grows to an N shape to PD-1. So that biology is very well understood, obviously, because of oncology. But that biology, you cannot do using a recombinant because if you are to make PD-L1 protein and inject it IV, it will just go into the blood and [ sublimate ] into the serum. But because the mRNA mix of protein from inside the cell and it's designed with a transmembrane, like the COVID vaccine, by the way, has a transmembrane, then it can grow into the N shape to the immune system. And we think this is very unique biology. We think the biology is very derisked. And so we are very eager to try this in the clinic, I hope this year, to see what it can do to change care. And again, if we see signal, we'll be moving that very quickly into pivotal study.

Great. So moving over to SARS-CoV-2. And there's been an emergence of new strains, including this U.K. strain B117, which demonstrates higher levels of transmissibility. Can you speak to your vaccine's ability to protect again it -- against it and others, such as the South Africa strain?

Yes. So of course, that's a very important question. And since the first case of SARS-CoV-2 back in January a year ago was starting, we have a team monitoring daily mutation, working very closely with Dr. Fauci's team at the NIH. And I have to say the scientific community has done a great job with the gathered data. When the sequence are done, they have shared around the globe on the Internet. And so we are aware, of course, before we read it in the newspapers. And so a bit of background. The Spike S protein, which is what we code in our vaccine, just the Moderna vaccine, is a whole-length spike protein. And it's important for people to appreciate, it is a very, very big protein. It's 4 kilobytes, it's 4,000 base pair. It's very large. If you look at most protein that we put in the clinic before, they are 1,000 to 2,000 base pair. That's a very, very long protein. And the positive of that is, when we have human make the spike protein in their body thanks to mRNA vaccine, they make the full-length protein. And because there are so many epitopes on that very large protein, people don't make 1 antibody. They make a swoop of polycloncal antibodies. That's what the immune system does. And so I think it's important for people to appreciate in the vaccine world, especially with mRNAs because with the full-length spike protein put there in the message, is people that are vaccinated with our vaccine make a lot of antibodies, binding to a lot of epitopes along that very long protein. And so if you have 1 or 2 or full mutation, what we have done, too, in silico analysis, and we are doing as we speak in vivo analysis, by basically putting human blood with neutralizing antibody made by the vaccine onto the virus, to confirm it neutralizes the virus and prevent the virus from propagating in the body. As soon as this is confirmed with the U.K. strain and the South Africa strain, we'll of course communicate that. And people with data out there, [ where we turn regularly ] on a very transparent basis. But we think there's a very high likelihood, I'll put it in the very high 90s, that the Moderna vaccine will work very well with the U.K. strain. We also believe it will work very well with the South Africa strain. What I think is important to think about is what might happen 1 year or 2 from now, which is if this keeps mutating from the U.K. strain and from the South Africa strain into a new strain, there might be a world where after 5, 6, 10 mutation, depending on how many happens on which epitopes, where you need to go with a new vaccine. One of the amazing thing about mRNA is the speed at which you can go from sequence to shipping product. As we've shown this year -- or last year, it took us 42 days to go from sequence to shipping products we could inject in human. And so you can see a world where the boost market of Moderna's COVID vaccine doesn't become one model of what used to be called 1273, mRNA-1273. It could be a product which is a combination in a single dose of the old 1273 because it's still circulating and still making super antibodies that are useful. But you could have in the same dose the new construct that includes the latest mutation that are prevalent, let's say, 6 month from now. And it could include also another mRNA for yet more mutation. And so this might end up being a product profile very similar to what happened, if you think about it, with HPV with GARDASIL or with Prevnar, which is you end up having a lot of strain in the same vaccine that you just keep adding those strain. And this, we can do extremely easily. The cost of good is very similar because most of the cost of goods is actually putting the sterile product in a vial, it's not the mRNA. So if there was 1 or 2 or 3 or 5 or 10 mRNA molecule in the vial, it's the same thing. So I think the technology is quite well suited for that. But again, I do not believe, based on the work we have done, that the U.K. strain or the South Africa strain is an issue. We'll confirm as soon as we know for sure.

Great. And so the data set from these, or the confirmation from these tests, is coming shortly.

Yes. The team is working on it as we speak, obviously.

Maybe you could speak to the logistical and distribution challenges that we've been seeing in terms of rolling out the COVID-19 vaccines. Why is this the case, per your understanding? And then maybe you could speak to your distribution efforts to date.

Yes. So in the case of Moderna, and I think it's important for people to understand, Moderna and Pfizer have very different arrangement with the U.S. government. In our case, the agreement we made with the U.S. government is that we ship to them the product when they leave the door. So when the product is quality-comfortable, there are obviously pallets of boxes of vaccines that are leaving Moderna's hands and going to the U.S. government that takes custody of the product. And this is where, basically, our job ends. When they get the product, it's at the federal level, it then distributed across the states. What the government is currently doing is we are currently keeping doses for the boost. And as you do the math, it's currently around 50% of the volume being kept at the federal level for boosting, which, I believe, my personal opinion, may be a bit too conservative of an approach. Because if you think about both Moderna and Pfizer, because mRNA is a new technology and we did not have, either company, 1 billion dose of manufacturing infrastructure sitting idle waiting for a pandemic -- or actually, output is increasing every week because we have more lines coming online, we have more and more people being trained and so on. So I cannot speak, of course, about Pfizer, but I can speak about Moderna. We are predicting to be, around the end of Q1, at kind of peak manufacturing capacity. We are still ramping up as we speak. And so I think keeping 50% of the dose at the federal level might be a bit too conservative if you believe the output is going to keep increasing every week, you're going to get more and more product every week. And then I think different states have taken different approaches. From what I've observed, you have some states that are very, very disciplined and strict about prioritization groups. And then have not necessarily worked out all the logistical detail of things like scheduling or consent. You also have some state that have -- I think have already in term of having enough medical workers to do the vaccination. Because if you vaccinate so many people and you're given the strain on your medical systems is, how do you do that? I think now there's a big work happening to enrolling of CVS and well within the pharmacy chains to be able to provide more people that are able and qualified to give the inoculation. And then you have some states like Florida that I have seen -- or again, reported in the media, where they have big parking lots, a bit like you've seen now for a year with testing, where basically, they say anybody above 65 years of age, so they are much less strict in prioritization group, it's just based on age. Anybody above 65 years of age, come with an ID, come with your car, wait in your car based on scheduling system. You come in your car and you get in line and you get vaccinated like this. And so I think as a country, we are learning what's working, what's not working. There has never been such an incredible scale inoculation done at the same time, mass vaccination like this, ever. I will not bet against America. I think that is really not a good winning strategy. So I think those are [ seeding ] problem. That is my opinion. I think if you look at the numbers, we are accelerating in the last 2 days. And I think as we get into the first weeks of January and February, that we'll keep accelerating. Plus, we have also the acceleration of the supply coming out of Pfizer and Moderna also accelerating. So again, I will not bet against America. I think the number of people vaccinated in the country is going to increase at an extremely high rate in the next weeks and...

Great. So just to follow up at some points you raised here. With regard to supply, you actually took up the lower bound of the amount that you can supply this year. So now you're 600 million to 1 billion doses. What does it take you to get towards that 1 billion dose supply or even exceed that? And then secondly, if I'm right, I think you have 510 million of these doses already fully spoken for, of which outside of that, some are locked up in options. When can you decide -- or when do those options expire and you could actually create a supply contract with another country, for instance?

Yes. So let me try to take this apart because they are quite different but very important. So what we are trying to do at Moderna is to be as conservative as we can in term of our guidance for volume. And it's mostly toward the governments. Because what we cannot have happened is we say we're going to make 1 billion dose and not make them. Because as you can appreciate, governments are waiting for those, and still in the private market. And so what we've decided as a company is to always guide as a base toward what we really believe we will make happen. And I would rather take that number up slowly, like we did yesterday, from 500 million to 600 million over fiscal year '21, than come up with -- and say sorry, we got this wrong, [ we don't ]. The 1 billion number we have, the investment might happen. The Board has approved the investment to 1 billion capacity with infrastructure. We have the headcounts approved and we're still hiring a few people, but we are mostly done. The big 2 swing factors between me being very comfortable we're going to hit the 600 million, what will take to get to 1 billion this year are 2 things. First is the yield. Given this is a new process, it is very hard for us, we have never operated at that scale. When you think about it, last year, we made less than -- I mean, in 2020 -- '19, sorry, I'm [ thinking in ] early January, we made less than 100,000 doses. So think about 1 billion dose, it's kind of a big jump. And so we know probably at that scale. And so what yield we're really going to get because you guys care about number of doses out of the system, not how big we build the capacity, if we build capacity and supply. And so what is not clear to us yet, but I believe even though I spent few years of my life in manufacturing at Mérieux, I believe that the team is learning so fast because we're making so much product and so many lots that we should end up in a good place. But it's just a bit too early to be confident that we're going to hit the high side of our yield projection. So that's one factor. The second factor, raw materials, which is because of the increase from 100,000 dose or less than 100,000 dose in 2019 to 1 billion dose target in 2021, what I don't know for sure because I don't have enough safety stocks keeping in warehouses, is, is there a point this year, pick May, June, July, pick whenever you want, where we are going to be missing ore ingredient? Or is it a shift of 8 hours? Is it a day? Is it 4 days? Or whatever long it is. And the same for every other company out there, we will not make product because we can't. It will be illegal and it will be unethical. We won't make product. But if we don't make product because we're running flat out 24/7, that capacity is lost forever. So that's the piece that is really hard for me at this stage, sitting on January 5, to be confident to tell you, "Yes, every day this year, every hour, you can have all the raw material to not lose 1 shift." I could not say that because it's impossible to know. And so that is why you see that still big window between 600 million and 1 billion. 600 million, we're very confident we will hit. The team is doing everything we possibly humanly can to hit 1 billion.

And Stéphane, on the supply side?

Yes. Sorry. On the supply side. So indeed, if you look at the options, the European option has been exercised. So now Europe is fully locked in at 160 million doses. So we have no more, as we speak, commitment to Europe. The U.S. has ordered 200 million dose. Initial 100 million, and they have exercised already after they saw the Phase III data, the next 100 million. So if you look at what is known out there, 200 million dose from Moderna -- sorry, 200 million dose from Pfizer. And then as you know, the U.S. government, I believe, has done a very nice job to diversify the portfolio of risk. They have 100 million from J&J, 100 million from AZ, 100 million Novavax and 100 million from Sanofi. So as we all know, some of these are super-late now, so won't impact 2021. Novavax has taken a bit of delay into their Phase III, and I will anticipate they're going to have issues with putting in Phase III because you have 2 have vaccine approval with EUA. And so going to a Phase III mean people at risk because if it's a 25-year-old Caucasian working behind the computers in the Phase III, you won't see cases or not see a lot of cases. You don't see cases, you don't reach your primary endpoint, so you're not turning that well. And so I think it was going to be hard for some companies now that are recruiting or not even starting with Phase III, so who will put those Phase III because you don't know if the vaccine is safe. If you are a participant, you don't know the efficacy of a vaccine. And by the way, you have a 50% chance or 1 in 4 chance, depending on the design, to get placebo. And then you get to AZ, who as we know is doing the study, and then Johnson & Johnson. As OWS has said publicly, they expect Johnson & Johnson's data to come in January. And I would say [ every change ] in data is good, which is what I hope it will be because we need a lot companies, as I've said all along last year, to really stop this pandemic. Between Pfizer, the first tranche of J&J and Moderna, that will be 500 million dose for the U.S. And if you think about it and you do the math, if you assume 70% vaccination, right, of 18 and above, which is what the labels are, from Pfizer it's 16, we are 18, it's around 150 million people in the U.S. So times 2, it's 300 million people. If you get 400 million dose of Pfizer and Moderna and J&J, it's supposed to be 1 dose vaccine. We have 100 million for 1 dose, it's 100 million people. So if you look and you do math, you are way over what you need to cover the U.S. adult population as being 70%. As you know, the latest poll showing around 60% people willing to be vaccinated. I would assume that number is going to go up over time because my prediction is people that are on the fence -- because the vaccine went so fast into development because it has been so politicized, my sense is people in the middle, on the fence, in a few months, when they see before vaccinated not dying in the street because of the vaccine side effects and they're going to see people not vaccinated still being hospitalized, and as you see those new strains that are more contagious, you might see a big increase in cases, I believe that a lot of people are going to come to reason in Q1 or Q2 or Q3, say, "Gee, I should really get the vaccine because the other option is not so good." And so I think there is a world where the U.S. government does not need any more options from Moderna. I cannot speak publicly because of the confidential nature of that contract or when those options expire. But the OWS team and the message that will come from the industry are very practical and reasonable people. If they have more vaccine than they need, they might not need the option. And so we can use that capacity that is currently reserved for the U.S. for the private market, so to export outside the U.S. And that's really for the U.S. supply chain. We have outside the U.S. supply chain with Lonza and ROVI based in Europe that has no constraint to the U.S. contract. And so that supply chain, we can contract everything we can in 2021 and 2022.

Thank you. And there was some debate yesterday between Dr. Moncef Slaoui at Operation Warp Speed and Dr. Tony Fauci about splitting Moderna's doses, or using half-doses, 2 doses apart. Is there any clinical rationale for this to move forward with such an approach?

So let me start by saying the current product, the EUA that we got on the FDA is for 2 times 100 microgram. And until we have something else approved, the only thing I will tell you is that what's approved is 2 times 100 microgram. As you know, the Phase I study was 25 microgram, 100 micrograms and 50 micrograms. There's a bit of data there, including duration, that was updated in the New England recently, which was very good duration, by the way for people that have not seen it. As you know, the Phase II was 50 microgram and 100 microgram. That data has not been published yet, it will be soon. But even that data, if you look at the size of the study and the fact that there is no [ prorate ] or protection right now that has been established and approved by the agency, I don't see a world where that data is enough to convince the medical community, the VRBPAC Advisory Board and of course the agency, to move to 50 microgram at this stage. Will there be a discussion? Is there something to be done study-wise to bridge to 50 microgram? Maybe. Just to early to comment on that publicly. But at this stage, we may say that at least from our company, is very clear, it is what the FDA has approved, is twice, 100 microgram, period.

And this may also be a difficult question to answer. But when you think of the protection offered by your vaccine, how often do you think you're going to need to step in with a booster here on the forward?

So I think there's 2 big unknown on the booster question at this stage. One is the one you raised earlier, Salveen, which is mutation. Because what, as I described earlier, you might end up needing is a booster that has many strains. Also, we should not forget the old strain is not going away, it's still around because those things move geographically. And so is there a booster market required because of mutation? I think that's one thing to think about. The other one is duration linked mostly, I would say, to age. We don't have enough data yet. The data we shared in the New England with the duration showing the antibodies are going down very slowly. It's also in the elderly group, which is good news. But do I see a world where maybe you might need every 2, 3, 4 years, for younger adults, a boost, forget about the mutation for a moment because I'm just talking about antibody, that is possible. You will need every 1 or 2 years for an elderly, 85-year-old person, a boost, it is possible. I think it's just too early to know, Salveen. I think we just have to be a bit patient and wait for the data to tell us that. As you know, the Phase III is still ongoing, and we are still tracking the efficacy and so on. And so if we start to see waning efficacy, that will be an important thing to, of course, consider. So there's still a lot to learn out there. But I do believe that between the mutation, that they're not going to stop. This is an mRNA virus. It's highly unstable. Unlike DNA viruses, like CMV or herpes, hepatitis that are stable, which is why once you are infected, you're infected for life because they're stable, they stay inside your body. mRNA viruses are highly unstable. We all know that too very well. This virus is mutating, will wanting to mutate forever. That's what viruses do.

Okay. And Stéphane, maybe one final question here. You're working on deescalating in ages into the pediatric population. Could you just comment as to when we might next hear from that effort?

Yes. So we have basically 2 effort. One is the adolescent, 12 to 17 years old. The study is ongoing, placebo-controlled. It's a Phase II/III. Our goal is, if everything goes well in term of enrollment, is to get the data toward the end of the spring, that we can share that with the FDA as soon we have it, get hopefully a label extension if the data is strong. My goal will be to have that label becoming 12 and above early in the summer, that we can use the summer to vaccinate adolescent, that the kids can go back to school with normal conditions in September '21. Because I would expect the teachers and the staff to have been vaccinated through the winter, spring, summer season. For the 12 and above to be vaccinated in the summer, prime and boost, July, August. So that in September, they can go back to school without mask and then with a normal student life that they deserve like we all had. For the younger kids, we have to go down in age very slowly. It's the right thing to do for safety, though mRNA technology of Moderna has already been tried in infants for other respiratory virus, hMPV and PIV, so we believe it should work well safely. But we need to prove it, as always. And so we're going down in age slowly. And also because of the weight of those infants, we have to go down at a lower dose per and dose escalate again. So because of that, it's going to take a bit longer. I could anticipate maybe toward the end of the year, having the data for the infants, maybe in early '22. At this stage, it's a group that seems pretty safe from what we are seeing. But again, with mutations, we never know. And we're still learning a lot about this virus. So we are very committed to get the clinical data that we could justify to get the label to go from infant into the elderly with our vaccine.

Great. Well, with that, thank you so much, Stéphane. We really appreciate your time.

Thank you, Salveen. It never ends, they say. Like everybody, please stay safe. Thank you. Have a good day. Bye-bye.

Take care. Bye.