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

Good morning, everyone. Thank you for joining the 20th Annual Needham Healthcare Conference. My name is Joey Stringer, and I'm one of the biotech analysts at Needham & Company. It's my pleasure to introduce our next company, Moderna. Joining us today from Moderna are CFO, David Meline; and SVP, Investor Relations, Lavina Talukdar. We'll begin with a brief overview, company overview, followed by a fireside chat section. But for those of you participating on the webcast, if you want to submit a question, you can do so at any time. And you can do that by using the chat box feature in the web browser. So with that, we'll get started. And I'll turn it over to David.

Okay. Well, thank you very much for joining today. I reflect sometimes about a year ago when I joined the company, most people I told didn't, they didn't recognize the name of the company. Whereas today, when you tell people about Moderna, people have immediate recognition. And usually within about 30 seconds or so they'll say, oh, and I have a couple of questions for you. And off we go. So with that, I think we all know who we are. We are working pretty hard at continuing to ramp up quite successfully our messenger RNA vaccine against the COVID coronavirus, which we'll talk about. And then we look forward to also talking more broadly today about the pipeline of very exciting opportunities that we see in front of us that we're working hard to develop. So maybe with that, Joe, you can go ahead.

Yes. Thank you, David. We'll go ahead and go into the fireside Q&A here. Of course, probably guess we're going to start with the COVID vaccine. So yes, the news flow around this is kind of fast and furious, and you recently had some additional announcements this week, in fact. So maybe you can review some of that data from the, review updated data from that Phase III COVE trial and the importance of the mRNA-1273, which is the COVID-19 vaccine, the durability that you see there in some of the most recent data.

Yes. Thank you. Yes. So we had a few updates this week, including, in particular, we held a session yesterday, a Vaccines Day update, where we shared a bunch of new information, some of which we can cover again today. In terms of durability, of course, of the COVID, the 1273 vaccine, we've now gotten a period of time post the trial. So in The New England Journal, they'd previously published from our Phase I participants the fact that all age groups saw antibodies persisting for at least 6 months. And more recently, we shared the fact that if you look at the results of the Phase III study, the participants there, we're seeing now after a 6-month median follow-up from the second dose, we're pleased to report that we're seeing greater than 90% efficacy against cases of COVID-19 and greater than 95% efficacy against severe cases. As we had expected, we're seeing good persistence in terms of the antibodies. And obviously, this is important in that the virus continues to circulate globally and with also these variants showing up as well. So we're pretty pleased with the initial indication of durability.

Yes. And in terms of a supply update, just a global supply update, you also announced some additional updates to that this week. And there's a lot to unpack here, but maybe you could give us the most recent update on APAs signed to date, dose capacity for this year and doses shipped in U.S. and also ex U.S. supply chain.

Yes. I know it's important for the market to keep track of how we're progressing and obviously important to patients who can receive the vaccine. So we're working very hard to continue to ramp the capacity for the company, both in the U.S. as well as from our supply chain, which originates in Switzerland with Lonza and depends on some other producers in Europe. So what we had indicated previously, which is still the latest information that we've offered, which is we had signed advance purchase agreements which contemplate deliveries in 2021 of the 1273 vaccine, which total some $18.4 billion of revenue for the company this year. And we continue to foresee achieving those commitments. If you look at the manufacturing capacity and supply chain capability, we had guided most recently a range of capabilities ranging from 700 million to 1 billion doses here in 2021. And we're pleased to confirm that we have good visibility still on the low end of that range, and we're working very hard to get to the high end of the range that we've indicated as obviously there's a very important need in the world. Further to that, we've also indicated that we are making investments right now to enable us to increase our capacity further to some 1.4 billion doses at the 100-microgram dose level in 2022. And as I'll talk about later, if we get into a discussion of the variants, of the work we're doing there. To the extent that future boosters come at a smaller dosing level such as 50 micrograms, obviously, that would increase the available capacity for us next year beyond the 1.4 billion. And then yesterday at the Vaccines Day, we also updated. So to date, as of a couple of days ago, we delivered globally now 132 million doses, the majority to the U.S. So in the first quarter, out of that 132 million, some 102 million doses were delivered in the first quarter, including 88 million in the U.S. And obviously, we've continued to deliver and we continue to ramp as we've moved into the second quarter.

And it's a great point about the variants, and we'll get to that in the next question. But first, you've also got some trials running in adolescent patients in a couple of different trials. Give us a sense, an overview of those trials, the importance of running those trials, designs and not only kind of the enrollment progress there to date and some of the key readouts and when we would see data from those TeenCOVE and KidCOVE trials.

Yes. So if you look at the product, the original trial was run for participants 18 years of age and older. But obviously, there's a very important cohort of children, which increasingly is becoming an area of focus for transmission and susceptibility. So we've got 2 trials that are underway, Phase II/III trials. The first of those being the TeenCOVE trial, which is for participants ages 12 to 17. That trial is fully enrolled. And we expect to see safety and immunogenicity data sometime in the next few weeks to months. And the authorization for this study is going to be based on either immuno-bridging to the Phase III study or if by the time the regulators are evaluating the data, they have a correlate of protection, they would then use that to analyze the data. So I think importantly, if we stay on track to the timetable, we're expecting to have authorization by the time the school year starts in the Northern Hemisphere here in the fall. So we remain hopeful that we'll stay on that timetable. For the second trial for younger people, we have what's called the KidCOVE trial, which is for participants 6 months of age to 11 years old. And that, there are 2 phases. The first phase is where we're going through to optimize and identify the optimal dose. And then the second part is, once you've established the dosing for the kids and because of the 2-phase nature of the trial, we're expecting that to complete and read out here later in the year, quite likely towards the end of the year. So again, important trials for us and for participants and we're working very hard and encouraged by the progress that we're seeing right now.

Yes. Great. Important trials for sure. There's a close eye, of course, on variants. And that is being closely watched as new variants sort of emerge here. So maybe give us an overview of Moderna's strategy and approach here to addressing those different COVID variants in terms of its clinical strategy. And really, there's even further nuances there in terms of the patients who have already been immunized or infected or naïve patients. So maybe you can just give us an overview on the clinical strategy here from you guys.

Yes. What we're doing there. Yes. So I think importantly, and again, I was just commenting to somebody earlier, I've never seen anything as closely tracked as news around developments in this area. So it's very visible to people. But we've previously indicated that those people who have been vaccinated with the existing original, our 1273 COVID vaccine, what we've observed is that those people who have been vaccinated have produced neutralizing titers against all the key variants that are out there right now. So in particular, that would include the B.1.1.7 variant first identified in the U.K. and the B.1.351 variant, which was first identified in South Africa. And what's been observed is that, in fact, the existing vaccine is effective against those variants, although it has been acknowledged that there's been a reduction, some sixfold reduction in neutralizing titers against the South African variant, but still proven to be effective. So as you would ask, what we're doing is we've got a clinical development strategy which is against these emerging variants. And it's got several components. So we've done an amendment to the Phase II study. We've got 60 participants who were originally previously vaccinated with the existing vaccine, the 1273, and they're receiving then a single booster dose in several different arms. So a portion, 20 people are receiving or have received a 20-microgram booster that's specifically targeted and designed against the 351 variant that was first identified in South Africa. There's a second arm which has got 20 participants at the 50-microgram dose level for this 351 variant. There's a third arm which has 20 participants which is getting 50 micrograms of a multivalent booster. So that booster has a combination of, on both the original. So a boost with the existing 1273, plus it's also loaded with the 351. So it's a combination of original plus 351 at 50 micrograms. And then separately, there's been a previous protocol amendment of the Phase II study where people are getting a boost, a third shot of a 50-microgram booster of the original 1273 vaccine. So as you said, quite some variation against these variants, but we're seeking to find what's the most effective booster strategy. And as indicated yesterday, we expect to have the results available here this year, which we think will be important to the extent that we see that it's necessary to provide this booster. I don't know, Lavina, if you wanted to add anything to that.

No. I think you covered it. The only point that I'd make is, the first data sets will be available relatively soon because as a booster, it is only one shot. And we'll be looking at neutralizing antibody titers post that shot within that 2- to 4-week period.

Got it. Yes. Everyone's looking forward to seeing that data. So that we touched on the original, if you will, vaccine 1273 and then the strategy to address new variants. But you've also got kind of a third approach here in this next-generation COVID vaccine 1283. What's different about 1283 relative to 1273? And how do you envision positioning that particular vaccine? Would it be something that would kind of replace 1273 or maybe you can provide an update on the clinical progress here.

Sure. Yes. So think about it as a second generation offering in this space from us, from Moderna. We've coded it 1283. And the design of the product is basically, we take portions of the spike protein which are critical for neutralization, specifically the receptor binding domain and the N-terminal domain, and we've encoded the 1283 antigen to be refrigerator-stable. So that's the key point here is that while our current product requires refrigeration to minus 20 C, which is not a terribly unusual level of refrigeration and in fact, supply networks around the globe are typically equipped to handle that level of refrigeration. Obviously, to the extent it could be in a nonfrozen state, that would be even a better offering to facilitate distribution and administration. So we have a Phase I study in healthy volunteers that's ongoing right now. We've dosed the first subjects in the trial. And we're testing right now some different dose levels in the active arms, and that's compared to the existing 1273. And we expect to see the results here soon. But what we then expect is that, indeed, assuming success with the 1283 that it would be replacing the original 1273 vaccine as we get approval for that. So another area and we'll have to stay tuned for progress on that effort.

Okay. Great. Well, we could spend hours on the COVID program and rightfully so, but I really want to kind of get into some additional vaccine programs because of the utility of the technology here and some additional pipeline programs. So let's maybe start off with CMV. Maybe review kind of the market opportunity there and the clinical development to date of your CMV vaccine program.

Sure. So I'm going to ask Lavina to handle these next review of some of the other programs. So Lavina could take the lead here?

Sure. So you're right, Joe, that we're really excited about the opportunity in some of the other vaccines that we're developing. CMV, which is the most advanced one after COVID-19, will be entering a Phase III study later this year. We just announced at our Vaccines Day yesterday an interim analysis from the Phase II study showing the 7-month immunogenicity and safety data for this product. And so on the safety, there were no surprises in the profile on safety and tolerability from previous interims. So in particular, we've just seen the localized pain due to the injection being given. On the systemic side, it's headache, fatigue and myalgia, which are all the most common adverse events we've seen now really through the platform. And we showed on immunogenicity a 20-fold increase in neutralizing antibody titers against the epithelial cell antigen, which is the pentamer, the key, what we believe to be one of the key antigens for CMV. We also did show an increase to seropositive levels the neutralizing antibody titers against the fibroblast cells, which speaks to the gB antigen also in this vaccine. So we're developing CMV for women of childbearing age as the target product profile. And the primary endpoint there that we're trying to prove out in the Phase III study is prevention of primary CMV infection. So while we'll be enrolling both seropositive women and seronegative women, the goal here is to show that the seronegative women actually do not get infected with CMV in the trial. And we're looking to enroll 8,000 participants in that trial. It will be a global trial. Yesterday, our Chief Development Officer spoke to the number of sites that we'll be recruiting individuals for that trial, and it's over 100. It's 150 sites worldwide. And we're looking forward to getting that study underway.

Great. Thank you for that CMV overview there. And also kind of moving down the line here to the other vaccine programs, you have an RSV vaccine program ongoing. Give us a description of the pediatric and the adult trial that are ongoing and any recent updates there.

Sure. So as is the cadence of what Moderna does, during our Vaccines Day, we also announced some updates to the RSV program and specifically for the pediatric trial in the young adult population. So because pediatric trials start off as age de-escalation trials, the first participants in this pediatric trial are younger adults. And there, with our mRNA-1345 RSV program, we again showed a safety and tolerability profile that looks pretty similar to the other vaccines. Again, pain at the injection site, headache, fatigue, myalgia were the most common systemic reported adverse events. And those typically last for 1 to 3 days in duration. On the immunogenicity side, where we're looking for the neutralizing antibody titer levels, we were able to show a 20-fold increase in neutralizing antibody titers against RSV-A and an 11-fold increase against RSV-B. And this compares really favorably to an earlier RSV candidate, mRNA-1777, where between the 2, there was a 10-fold increase with the newer candidate, mRNA-1345. And we believe that's due to the optimization of both the sequence for the antigen as well as codon optimization. And importantly, it's using a different LNP than the previous version. It's the same LNP that we've used for our COVID-19 vaccine. So that's the pediatric trial. I do want to mention that we will be taking this particular candidate into the older adult population where there also remains a very high unmet need in addressing RSV in the older adult populations because they are more vulnerable to and susceptible to RSV infection.

Got it. Got it. And continuing with the vaccine theme here, as you mentioned, you had your Vaccine Day yesterday, but you've recently announced some additional vaccine programs, including flu, HIV and Nipah. Maybe just at a high level for each of those 3, what the market potential is and the initial strategy kind of going forward here in the near term?

Sure. So I'll start with the public health vaccines, Nipah and HIV, where both of those will be moving into a Phase I study later this year. On Nipah, the way to think about this program is that Nipah is going to be more targeted toward an epidemic/pandemic preparedness approach. This is a virus that circulates in countries in Southeast Asia. And thankfully, it has not become a major epidemic and hopefully will never become a pandemic because it is a very horrible virus with high mortality levels in excess of like 40% if you contract this virus. The goal there is to be able to develop a vaccine and take it through Phase I that will then have Moderna and authorities around the world be ready if, in fact, there is a situation where we would have to deploy this vaccine in those regions where this can become an epidemic. On HIV, we're working with IAVI to develop HIV vaccines to induce broadly neutralizing antibodies through a very novel approach that is iterative where we will be making many versions of a vaccine to help shepherd the immune system into making these broadly neutralizing antibody titers. What was exciting from Vaccines Day yesterday was the reveal of the G001 study that IAVI led that basically speaks to this approach being an active approach, a promising approach. I believe they showed 90% effectiveness in the people that they treated, the participants that they treated in this first study. So with that foundation, moving into a second trial, another Phase I trial using Moderna's technology to have these broadly neutralizing antibody titers produced by the vaccinees once they're vaccinated is exciting. And so that work with IAVI is going to continue throughout this year. And as I just mentioned, we're moving into Phase I there. One of the things that the key opinion leader pointed out yesterday is that our technology lends itself to this iterative approach where we can very quickly and very economically develop vaccines that will train the immune system, if you will, to make these broadly neutralizing antibodies. And for the flu vaccine, we are also moving into the Phase I study there. We see a very large opportunity to disrupt the flu market. I think yesterday the key opinion leader talked about roughly 500 million doses that are produced for flu annually. We do think that Moderna's ability to quickly produce a vaccine will help with issues within the flu market currently where the lead time to make those vaccines often is unfavorable given how quickly this virus mutates. You often have a mismatch as a result in terms of what you're using in your flu vaccine versus the circulating flu virus, which often leads to lower vaccine efficacy. And so we hope to actually better that through the high fidelity antigen capture as well as the speed to market with mRNA technologies in the flu market.

Yes. And maybe a common question here in terms of these other vaccine programs, has there been any lessons learned from the COVID vaccine program that you could really apply towards these other vaccine programs? Understanding it's a different indication here, but any lessons learned that you can use to kind of successfully develop these other vaccine programs?

Sure. So there are many lessons and learnings and takeaways from the whole COVID-19 experience that I think are applicable to all of our vaccines in development and even beyond that into therapeutics. I'll start first by reminding everyone that within the vaccines' modality, we use the same mRNA technologies and the same lipid nanoparticle as our COVID-19 vaccine does. And so that in itself will help with manufacturing as well as scale up because the manufacturing processes are the same as well. But in moving to clinical development and the learnings on the successful Phase III study that we ran, where we enrolled in excess of 30,000 participants into our trial in, I believe, in roughly 3 months that the learnings from that as well as the relationships that were built with investigators and trial sites, I think, will all be leveragable for each and every vaccine that we take into the clinic. So developing those relationships was an important learning and understanding in how to conduct these trials going forward. The other thing on the brand recognition now with Moderna, I think, is important as well because as our Chief Commercial Officer spoke to yesterday, it helps with raising disease awareness as well as awareness around mRNA technology, which is a new technology in the vaccine field. So all of this, I think, is going to help with the development of all of the vaccines in our current pipeline.

Yes. And before we move from the vaccine discussion here to some other pipeline programs, I just have a general strategy question for going forward. Given the success of the COVID vaccine program to date, what's really the right balance of pushing forward these vaccine programs, which you've had these initial success and it looks promising for vaccine development and kind of applying the technology to other pipeline programs in cancer vaccines and autoimmune indications and some of the systemic intracellular therapy indications. What's kind of the right balance of pushing forward the vaccines versus making sure the earlier to mid-stage pipeline stays strong?

No. I think it's a great question. And where I would start is, of course, maybe it's a statement of the obvious. But the fact that we've now got a product on the market with this new messenger RNA technology, which is looking very good. I mean, every day that passes, we're introducing millions of more patients to the product and to the technology. And so far, so good in terms of what we're seeing in terms of the safety and efficacy of the product. So I think that's a huge indicator of the potential going forward for the technology and for patients in the world. So we're very encouraged by that. And that, of course, along with the fact that we're going to have very significant availability of resources with the success that we're expecting this year, to really accelerate the investment across the very broad set of programs that we're developing. If you break that down, there's really 2 core modalities. So you can consider vaccines and the several we've just talked about as well as the therapeutics. And we consider those both to be core modalities. We basically derisk with the clinical data those modalities. And given that we're very much a data-driven company, as we derisk the modalities, we then continue to invest. So we're going to be investing in both of those areas. And then as we explore new modalities and see, hopefully, success with them and as we derisk them, we'll invest additionally there. And that's about both the accumulated knowledge that we're getting as we get experience in the market with our product and the other trials that we're doing. And then, of course, we have the financial resources now, and it's about leveraging our capabilities from a research perspective to move as quickly as we can because, again, the big derisking event of getting to market successfully has now taken place. There's recognition and increasingly acceptance of this as a superior and preferable technology. And we think the opportunity is really very significant. So that's how we're thinking about it. I don't know, Lavina, if you wanted to add.

No. I think you covered it all, David.

Okay. Thank you.

All right. I actually kind of want to jump back into the pipeline here and touch on some of these other programs. So the immuno-oncology effort that you have ongoing, there are several programs within that space there. But maybe just kind of highlight the key programs there, maybe an update on the personalized cancer vaccine and other key programs. And when could we see some additional data from those lead programs?

Sure. So Joe, yes, you did mention the personalized cancer vaccine program. There, I'll remind everyone that we're both in a Phase I study as well as a Phase II study, and I'll walk you through how that came to be. So as is the case in oncology, oftentimes, with a Phase I study, you start an approach that's more of a basket study where you are enrolling many different types of tumor or cancer types. And there, you're looking for a signal, any signal from any of those different tumor types that you're treating. And so from the Phase I study there, if anyone's interested, from a molecular basis, we wanted to see if there was a T cell response, a CD8 T cell response, which is oftentimes what you're looking for in an immuno-oncology approach. And at ASCO of 2019, we did prove on a molecular basis that, indeed, we can stimulate T cell recognition of the different neoantigens in our personalized cancer vaccine that we use for each of the patients. And that is available on our website if anyone wants to look at that data. It was based off of that data that our partner, Merck, and ourselves decided to move the program into a Phase II study. And in that Phase II head-to-head study with PCV versus Keytruda -- sorry, PCV plus Keytruda versus Keytruda alone, we are enrolling patients there. However, that study is a time-based study. So the endpoint there is, we'll be looking for recurrence-free survival in this adjuvant melanoma setting at the 12-month mark. So the hope there is, is that in the active arm, you're going to see many more patients live cancer-free after resection of their tumor at the 12-month mark versus Keytruda by itself. And so that study is enrolling 150 patients. We haven't announced that it's fully enrolled, so you can't necessarily start the clock for that 12 months yet. But when that is fully enrolled, that's when the 12-month clock will start. So unlikely that we're going to see that data in 2021. However, in the Phase I study, where we have expanded into different tumor types in the head and neck cohort, we did communicate early but interesting data in that tumor setting where we showed a 50% response rate. And that compares favorably to the gold standard, Keytruda, which showed a 16% ORR off of the RECIST criteria. So what we're doing there is we've increased the size of the cohort. It was an early cohort that gave us that signal. If that signal persists in a larger cohort of patients then that will potentially serve as proof of concept for PCV.

Got it. And we're coming up on time, maybe 30 seconds or a minute left here, but just maybe one more quick question. You have some rare disease, some preclinical programs in rare disease and autoimmune. How do you see both of those modalities kind of fitting into the strategy of Moderna kind of going forward here?

Sure. So yes, in rare disease, we are -- not only have preclinical programs, we are actively trying to enroll a Phase I/II program for our PA, the rare disease PA, propionic acidemia. And as I just said, we're trying to enroll patients there. So stay tuned there in terms of enrollment updates. And in the rare disease setting, as you know, oftentimes, if you have consistent biomarker data in a handful of patients, that can serve as proof of concept. Autoimmune is a very exciting area for this technology. Those programs are still in the preclinical phase. And the 2 programs that we highlighted there is PD-L1 in the context of autoimmune disease as well as IL-2. And these are both taking, those programs are both taking advantage of understanding the immune synapse and using the biological information there to inform those programs as we move forward.

Great. Well, thank you so much to David and Lavina and the rest of the Moderna team for participating in the fireside today and answering questions. And again, thanks, everyone, for joining us on the webcast. And everyone, have a good day and a good rest of the conference.

Thank you, Joe.

Thanks, Joe.