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

Thank you to CCP and the Forum for inviting me to be part of this discussion. I'm Andrew Edgecliffe-Johnson. I'm the U.S. Business Editor of the Financial Times. And I will not discuss which COVID vaccine I got, but I'm also at the FT, which is without fear or favor, so I'll try not to let it affect my questioning. I will say though that I'm delighted to have this opportunity to introduce an executive who's had an outsized influence on the lives of many of us in recent months. Stephane Bancel is CEO of Moderna, and he's living proof that good things can come out of Davos because it was at the World Economic Forum early last year in January that he realized the world could be on the brink of its worse pandemic for 100 years. He talked to my colleagues recently about sitting in Davos with 2 scientists sketching out disaster scenarios on napkins and the penny really dropping when he picked up his iPad and found out how many planes were flying in and out of Wuhan to cities in Asia, Europe and the U.S. But the fact that Moderna, a young company by biotech standards, was able to respond and start developing a COVID vaccine in record time is testament to how far it's come in Stephane's 10 years in charge. When he was first approached about this job in 2011, he was running a French diagnostic testing company. And he said that he was initially quite skeptical about moving to a company which is focused on mRNA. But he told the FT recently, he realized then that if it works, it would change medicine forever. That long-term gamble has paid off pretty spectacularly this year and sets the stage for me to ask Stephane to tell us more about how Moderna is thinking now about the long-term planning for sustainable value creation. [Operator Instructions] But with that, let me hand over to Stephane Bancel.

Andrew, thank you very much, and thank you very much to the committee for inviting us today. Let me share my slides. Can you see the slide, Andrew?

I can, Stephane. Yes.

Thank you very much. So let me start very briefly, telling you we will be making forward-looking statements, that investing in Moderna is risky, and I please invite you to visit our website or the SEC website to read any of the disclaimer and forward-looking statements. Before I start, given we're going to be talking quite a bit about Modena COVID-19 vaccine, I need to remind you that this vaccine has been authorized. It has not been approved yet, and there's a lot of important safety information that are on this slide. Again, this is available on our website if you wish to access it. So as you said, Andrew, when I was first approached by a group of academics and venture capitalists in Cambridge, Massachusetts with the idea of using mRNA to make medicine by injecting mRNA in people, so people will make their own protein to make their own drug, I foster them that they must be crazy, that this will never work. It was going against anything we've learned in biology. We thought mRNA was very unstable. We thought mRNA was highly immunogenic, meaning giving you flu-like symptoms. And so those are not good characteristics for medicine. But after spending quite some time with the founding team, I realized that there was a small possibility that we could potentially make mRNA work. And what we believed from the beginning is that if we could make mRNA work safely in human, this would be a new class of medicine. And if you take a long-term horizon, 10, 20, 30, 40 years, this could literally be many thousands of new innovative medicine impacting the lives of millions. And so from the beginning, we set this probably bold mission for the company when we have 1 employee before me, which tries to deliver on the promise of mRNA science to create a new generation of transformative medicines for patients. And the word that defines us the most is the first word, it's to deliver that commitment that we had, that we had to make this work because if it worked, it was going to mean so many new medicines to help so many that we could not fail society. We had to find a path to make this science work. And if you look about what happened, as Andrew said, over the last 17 months now is we basically prepared Moderna for this moment. Of course, in none of our 2-year, 3-year, 5-year plan was ever a pandemic planned for, obviously. But because of all the investments we made in science, always focusing on the long term as well as in manufacturing, we were ready when the virus emerged between Christmas and New Year of 2019 to start chasing it, initially believing it was going to be an outbreak, like SARS or MERS. But then eventually, indeed, my week in Davos, realizing that most probably, we're going to be at the beginning of a pandemic like the 1918 flu pandemic, and we had to change the intensity at which our company was going to chase this virus. If you look at where the company is today, and I won't bore you with the entire slide, so obviously, we are in commercial phase now with the COVID-19 vaccine, but Moderna has a very substantial pipeline. Because mRNA is an information molecule, we always build Moderna for scale to maximize our impact on people. And you can see on the left, we have 9 vaccines for major unmet medical needs. And we have now 13 therapeutics across 4 therapeutic areas: immuno-oncology, rare genetic disease, cardiovascular and autoimmune disease. So if you look at infectious disease and the 4 therapeutic areas I described, it's basically the 5 biggest killer in the world. And we focus on those because we care mostly about impacts. The company is now north of 1,500 people. We are very proud -- that I'll come back to it -- that for 6 years in a row, we have been named 1 of the top 20 best company to work for by the prestigious magazine, Science. We are on track to deliver $800 million to $1 billion this year. That is quite remarkable for a company who made less than $100,000 in 2019. And we announced recently that we made investment to go up to 3 billion doses in 2022 to really stop this awful virus. We continue to expand internationally and we have a stronger cash position. So as we think about sustainability, we ask ourselves a few key questions. First is how do we contribute to society because that's very important for us in terms of impact on global health. We also ask ourself how can we help fight epidemics and pandemics. And also how do we contribute to the health and welfare of our environment because we do believe that we're having a very big impact on the world as a society, as a human society, impact on our employees and impact of the communities where we live. I'd like to tell our new employees every time I do onboarding like I did this morning, that we should not expect any of us to live in a great community if we as a company and if we as individuals do not engage and make our community better. So a few years ago, when we started this commitment to corporate social responsibility as a company, we said we're going to focus on 5 dimension as a start. The first one that you can see at the bottom is how to use medicine for a big impact on patients. And not only commercial medicine, but medicine that are important for patients that might not have a good economic return. And we want to find public-private partnership to get those to market. And what do I mean by that? Things like tropical disease vaccine. Most large companies do not invest in tropical disease vaccine because you won't make any money. But because we have a platform, we believe that by doing a public-private partnership, we can bring important vaccine to the world that are needed to help people even though, indeed, we're not going to make any money, but we think that's a responsible thing to do. And a piece that we are very passionate about is ultrarare genetic disease. Think about disease when you have 100, 200, 300 kids around the planet that have those disease. You could not justify of any price that will not be obscene to go after those disease. But what about the other model where you create, again, public-private partnership. And because you only have 100 kids to take care of around the planet, you could actually provide the drug for free. That's the type of thing we mean in terms of medicines for patients, using the power of the company as a platform to do the right thing. The second one for us is employees. At the end of the day, it's our own employees who do all those wonderful things. When we started 10 years ago, there was nothing. There was a crazy bold ideas, but there was nothing. And everything that has been built has been built by our team. If you look at what the team has achieved in the last 17 months, it is just truly remarkable. And what we want to do around our employees is to make sure we create an exceptional place to work that is rewarding and challenging so that people can come every day to do their best work at the service of others. The third chapter for us is the environment. We believe that we need to be a responsible company, that we need to make sure that we minimize the impact of the company on the environment of our planet, and we'd be able to set an example across the industry, but also across companies to set a very high bar to minimize our impact on the environment. The fourth chapter for us is community, is we want to make sure that we provide time for employees, that the company also support local communities, and we'll share some examples with you. And last but not least is we want to make sure we have very strong governance, very strong ethics because we believe that is an absolute minimum to operate in today's world, but especially in tomorrow's world. We need to make sure all our stakeholders believe that we are a trusted partner. Given we won't to have time to cover all those topics in details, you can find more details on our website. Let me cover a few chapters. First, let's start with medicines for patients. Of course, the COVID-19 vaccine is, I think, an amazing example of the impact the company always dreamt of having and has had in the last 17 months. We need to know we are very committed to keeping the fight against the virus, even though in some places like in the U.S., we feel in a much better position now than 6 or 9 months ago. We are not done. Unfortunately, many people on the planet are not vaccinated and won't be until sometime in 2022. And we need to keep chasing the variance of this virus. We believe they are a cause for concern. And we believe boosters are going to be important. And you have the full commitment of Moderna. That until this pandemic is fully under control around the planet, we'll keep iterating with very quick boosters adapted to a variant of concern circulating. We want to accelerate our investment in vaccines. There are many disease that hurt people around the world, that sometimes you are not aware of, for which we need a vaccine that do not exist today. CMV, cytomegalovirus, is a great example. This is the #1 cause of birth defect in the developed world. In the U.S. alone, for example, 1 in 200 children is going to be infected by CMV during pregnancy and will drive a massive long-term effect on the child development, including sometimes deafness, blindness, sometimes microcephaly, massive brain damage and impact and sometimes even death. We should live in a world that's CMV-free. We believe we have a solution for this. It's a very complex vaccine, 6 mRNA molecule profile, but it shows you the power of what we can do by using this technology for the better good. The third chapter for us is public health, and we are very happy that we are working in public-private partnership, for example, the U.S. government on getting a Zika vaccine to market. Zika has not left the planet. Zika is going to come back. We need to be ready when it comes back to minimize the potential human toll of this awful virus carried by mosquitoes. Nipah is another virus of concern present in Southeast Asia, very high mortality rate, in the 70%, 80%. This could be our next pandemic. We need to work on a vaccine now and we are doing that with Dr. Fauci's team at the NIH. And then, of course, HIV. 40 years after the discovery of HIV, there's still no vaccine against HIV. We are partnering with the Gates Foundation, the NIH and Dr. Fauci team and many others to try to bring together a vaccine against HIV. And then, of course, we want to keep developing treatments across the therapeutic areas I talked to. Our impact on the vaccine has already been tremendous. You see a few photos on this slide, but what's more important for us is the millions of people, literally dozens and dozens of millions of people that have been fully protected, some of them getting a dose already of our vaccine around the world, more than 100 million doses delivered in only Q1 and the number is increasing very quickly in the U.S. and outside the U.S. As you can see, I won't go through all the list, you can have a look, we already have partnership and agreements all around the world, and we're very proud to have set up an agreement with COVAX, with a commitment of already 500 million doses to the low-income countries. And we're even discussing with COVAX, can we do more to protect more people? You can see in the vaccine front a lot of different projects. You can see the name of a program on the far left, this is some of the programs I talked to. But the big commitment by Moderna is to have the best development pipeline and vaccines in the industry, and we are not done. We're just getting started. So this is what is in development right now, but our teams in the labs are very busy developing the next generation of innovative vaccine that will be moving in clinical development very soon. As I talked about a minute ago, the massive effort on public health, where we do not anticipate to make a profit, but it is the right thing to do for the world, to bring those products at costs like Zika, Nipah and of course HIV. If you think about the impact we can have, we're very excited about our 5 oncology drugs that are in the clinic. Our cardiovascular program, which is in partner with AstraZeneca, where we inject mRNA in people's heart after a heart attack. Because if you have a heart attack and you survive it, you will most probably, unfortunately, die of heart failure because your heart's ability to pump blood correctly has been damaged through the heart attack. So what if we could inject in your heart in 1 intervention, 7 to 10 to 12 injection of mRNA, they rapid down in your heart in around 10 minutes to instruct your heart muscle to build brand-new baby-like blood vessels, to revascularize your heart so your heart and regain its functions, you can live a high-quality life. We're starting to get into autoimmune disease and getting into rare genetic disease. That's getting us very excited because there are many diseases, dozens, for which those children have no hope. But what if you can send an instruction, 1 molecule of mRNA into their body, to give them the instructions that they are missing from the DNA of their mother and their father? That will be very profound. The second chapter that we are very passionate about at Moderna is to ensure maximum access and maximum impact of our medicine, and this go through clinical trial best practice. Today, in the industry, if you look at the data, minorities are not very well represented in clinical studies. Well, we believe this has to stop and we believe there is a better way. We were very proud of our Phase III COVID-19 study, which was called the COVE study, started in July, was done by October 22. A very large study. When we started the study, we set the goal to have a representation of minorities in our studies that matched the representation of the U.S. population. And you can see on this slide, I won't go further details, the U.S. population representation by its census and the COVE study representation. To tell you how much we care about this, I had to make last year one of the hardest decisions over the year. I had to ask the team to slow down enrollment of the study because we were not on track, especially with Black or African American minority in our study. We are not on track because some clinical trial sites were recruiting heavily into the white population. And we said we will fail society if we get an amazing vaccine authorized, but if some communities, because they don't see themselves into the vaccine data, do not feel the vaccine is safe or do not feel the vaccine is efficacious in their communities. And so we slowed down the recruitment. We actually stopped some sites that we are too heavily recruiting in the white population, because we are doing great there, and to put an emphasis to help further the sites that we are focusing on getting African-American or Hispanic into the study. We are very pleased where we landed, and Dr. Fauci, in one of our review, congratulated the Moderna team because he said the COVE studies, in terms of minority representation was, to his knowledge, the best vaccine studies ever done in the United States. That gave us a lot of hope and a lot of pride. And so what we want to do now is to use this practice as the way we run the business. Every time we were going to start a Phase III study, we're going to indicate to the world in a very public way, like we've done a couple of months away, the target that we have for demographic composition before we start the Phase III. And we will regularly report our progress, although safe, accountable, publicly, and if we have to, slow down the enrollment of the study like we did for COVE, to ensure that every person of minority will feel that this vaccine, these studies represent them and they can feel confident our products are safe and efficacious for their population. Let me now turn before closing on human capital management. As I said earlier, we have a very strong belief that people in business is everything. As they teach you in business school, real estate is location, location, location, where I believe that business is people, people, people. So as we set the company with this ambitious mission to deliver on the promise of mRNA to make transformational medicine for patients, we spend a lot of time thinking about what's the right culture for Moderna. And as you can see at the bottom, we said that the unnegotiable, what we call base camp, is integrity, quality and respect. We did not believe, we still do not believe, one can build a long-term sustainable business that is positive for society if in the company, we don't have very high level of integrity, quality and respect. But we decided the things that made us different, that set us apart, that we adapted to our science and the mission we had to deliver for society was that we had to be bold and courageous. We have to be collaborative because nobody has ever developed a drug alone. It's a team sport to develop a medicine, and having a strong collaboration is really fundamental to our success for patients. That's where to be curious because nobody had ever made mRNA drugs before us, and so we needed to be able to ask why and why again and why. And we now have this part of our culture about everything, including the environment, sustainability, those are very important questions and we want our teams to always ask why and to be relentless because doing things that have not been done before us is hard. It is not a straight line. It is not always easy for our teams, and we want to make sure that the culture of the team was to be totally relentless because of the importance of the mission that we're carrying. We believe that doing the type of work we do requires a culture of quality. I always tell the team we should never forget the medicine we work on are going to be injected in people, in our loved ones, in parents, children, brothers and sisters, neighbors, and we need to make sure that quality is really at the center of what we do across the organization, and that speed or cost can never be compromised for quality because of a potential impact of not having the right quality. We have started to track our numbers as an early-stage company. If you think about it, in 2018, we are less than 700 people at the company. And to really track -- to track the workforce in terms of women in our workforce, in terms of women in leadership position and in terms of a diverse workforce, and our numbers are improving, which I'm very proud of, but they are not good enough. We're keeping at it. This is really important for us. We want that everybody at the company feels very comfortable, feels respected, feels heard, and we like to be what I call the united nations of Moderna, to have people representing society, representing the world and being very comfortable speaking up their mind because at the company, the best ideas win. We feel very, very privileged and humbled that for the last 6 years in a row, our employees, through a competitive survey done every year by Science, ranked the company as 1 of the top 20 employer in the world, and we feel very, very proud about this. We invest a lot in our employees through things like Moderna University, where we do a lot of training, we do a lot of partnership to -- for personal growth of our employees. And one of our latest innovation is an AI Academy where we are training all our employees, from frontline employees to the CEO, in the skill of AI so that we can use technology to further our mission. That's very important for us. And of course, we want to have very strong benefits in terms of parental leave for men and women, paid sabbatical and things like that because, again, we want people to give us the best work, but also to make sure that people come with their family and their lives. That's very important for the long term. The other piece, too, where we're starting to make a big stride and that's a big objective of mine in the next few years is the impact on the environment and the community. I'm very proud that in 2021, we have declared that we want to use renewable energy and offset carbon emissions in our facility in Cambridge and in our manufacturing site in Norwood, and we want to really build a company that has the minimum impact that we can have on the environment in terms of carbon, in terms of water, in terms of plastic usage. And we want to expand that, of course, to our supply chains, and to really move to a carbon-neutral company. In terms of our community, we give paid time to our employees to go into the community and do work together. I have had the chance to go with our teams, prepare food for the homeless in Boston, clean the Charles River, and those experiences are always rewarding and fun because you get to know colleagues in a very different setup and to see what they are passionate about. If you think about it, our priorities, and I'll let you kind of go through the slide, I don't want to read everything, where it goes around the role or so of the Board in terms of this sustainable future for the company. As you can see on the left, last year, the company and the Board went into high gear to make sure that the Board was helping us, enabling us but also providing control in strategic direction on how to navigate this crisis. Trust me, going from scratch to authorization of a product in 11 months when you've never done a Phase III, never got a product authorized and never been commercial from a manufacturing standpoint, well, it was not easy. We had to mitigate financing risk because we had to invest early billions of dollars in clinical trials, in building up and scaling up manufacturing without knowing the product was going to work. And as you can see on the right, we have very strong engagement of our Board across the development of a sustainable future for the company. So with this, I would like to turn back over to Andrew for Q&A. And I would like to thank you. I believe this is just the beginning. We have an amazing platform, and I'm very excited about what I think Modena will do for the world in the next 10 to 20 to 30 years. Back to you, Andrew.

Thanks. Send any questions you have for Stephane across and we will try to get to as many of them as possible. But just to start off, I was very struck by what you were saying there about your public-private partnerships, specifically the partnership you have with COVAX at the moment for delivering, I think, you said 500 million doses to developing countries -- like you, a pharma or biotech company could be interpreted the same which is just give everything away for free. You clearly can't do that and keep investing in drug development. But what balance of profitability in public health -- your public health mission do you strike? And how is that guiding your current decision on how much support Moderna should tend to the developing world as it battles COVID?

Yes. It's a quick question. And of course, there's no perfect answer on how to balance those things. As you say, Andrew, it's all a balancing act. So let's maybe pick up all the COVAX COVID decision versus the portfolio of novel products for public health purposes. On the COVAX front, it's pretty simple, we really believe that we need to maximize the impact of a vaccine in term of access. And so what we provided to COVAX is a tiered price, which is very typical for vaccines, where low-income country pay a much, much cheaper price than high-income country. And that we kind of think is fair in a sense if you can get a return for your shareholder in terms of investing in R&D, in terms of investing in manufacturing through the developed country, then you can do the right thing for the world by making a much smaller profit, that we think is the right thing to do. In terms of the kind of tropical disease strategy, the piece that I think is quite unique about Moderna where we want to have a very big impact on the world is we have a platform, meaning the way we do with Nipah vaccine is exactly the same technology that we do with COVID vaccine. We don't have to invest more money to advance the science further or to do research specifically to, let's say, a Zika vaccine or to invest in manufacturing just for Zika because mRNA is really an extraordinary disruptive platform to pharma. In traditional pharma, you need to invest in every drug independently. You need to invest in a manufacturing plant for every drug. So as you can imagine, if you're sitting in one of the big vaccine company, the idea of doing a Zika vaccine is daunting because the cost you're going to have to invest is gigantic. And if you don't know how you're going to get a return, it's very hard to justify it to your shareholders. Well, in our case, we can work on the Zika vaccine by only looking at the incremental variable costs. And for that small cost, we look at public-private partnership. In the case of Zika, the U.S. government through BARDA is paying for the specific cost to do the preclinical work a few years ago and to pay for clinical study right now. But when we talk about ICER, we don't need any upfront fees, we don't need any margin on the platform because the platform is being paid for by all the commercial products. And so it's a great win-win partnership, same thing with the Gates on HIV, which all have the same thing. We don't need you guys to give us a penny to fund the platform, we'll fund the platform on commercial product. But because the platform is developed, we want to make it available for the world. It doesn't cost you a penny to make it available. We just need you guys to help us so we don't use shareholder money to develop a product that we're going to make no profit on. But we use your public foundation money, but just as an incremental cost for that product. So it's really a very nice win-win. They're super happy they get great returns for their public or foundation dollars. And we are very super happy because the platform is here and it can help do the right thing for the world. As you can imagine, employees are massively motivated because no employees in my company, like in all companies in the world, they want to come to work, they want to be proud, they want to have a big impact on their fellow citizens around the world. And they get very energized by it, which is great for the company's long-term success to have highly engaged employees. And so we find this to be a nice win-win. The one that's going to be, I think, a bit more tricky, but I'm very optimistic is ultrarare genetic disease. As I said, 100, just a couple hundred people, I think we will find public-private partnership to pay for clinical costs because you might talk about $40 million, $50 million, which is in grand scheme of thing is not an impossible amount of money. But what I think could be very cool is to make the products available for free because we could, as a private company, if we make 1 billion of doses for all our portfolio, you can make a couple hundred more doses a year for every kid or maybe even a few thousand doses because they're going need to repeat dosing of a medicine and just make it available for free because sometimes what is really hurtful to me is when I see a biotech company charging $1 million for rare genetic disease. I just think this is not a price I can justify to anybody. And so I would rather go on the other side of the trade and say, look, if we're talking a few thousand doses per year, we can, at the size of the enterprise, absorb it and make it available for free. So that's how we're thinking about it.

[indiscernible]

Andrew, I'm sorry to cut you. You were cut. I couldn't hear you. I'm sorry.

Let me check. Let me just switch mic, just try to switch my microphone. Let me try this other microphone to see if that's any better. Have you seen any tension with your shareholders about that balancing act? Or do you think they see it in the same way as you do at the moment?

So we have not seen tensions. And actually, I would even argue the opposite. Our shareholders are very happy we are going at this public-private partnership the way we are. As we built Moderna, as we said at the beginning, this was a totally crazy endeavor. And what we spent a lot of time over the last 10 years is finding the right investor for Moderna, meaning people that believe in investing in science, and that science that don't take 5 minutes, like sometimes the capital market wants to make you believe science takes in the quarters and years. People are very long-term driven and wanted that their investment not only create a return for themselves and their own shareholders, if they are like pension funds and so on, we also had a good positive impact on the world. I think there are a lot of very high-quality investors. We have a very long-term view on things. And when you explain to them the platform and what the platform can do and that those incremental investments are very tiny. And if you can do it in a smart way with public funding or foundation funding, it's really a win-win-win. Everybody wins. The patients win. The partners, public funders win and are very happy because their mission gets advanced. And we win because we make the world a better place, we have a highly energized employees, as we discussed, and those shareholders are very, very happy. I know we have a few long-term shareholders, for example, in Switzerland, and every time I talk to them, they're asking us about this portfolio because they care that their investments not only creates a return, but also makes the world a better place. So I think there are a lot of investors like this in today's world. And I think more and more, I think the millennium generation is even more interested than that. And I think the key for a company like ours is to find the right investors. In the early years of Moderna, we must have been 4, 5 years old, in one of the private funding, we turned down a $200 million check in 1 check. That was a very, very bizarre discussion in our boardroom. And I walked into the boardroom and we reviewed all the investors wanting to invest, and I told the director say, "Look, this investor I don't think is a good fit for our vision." And I worry deeply that while it will feel good right now to take the money because we have so much investment to do in science, and we are, remember, losing money every day, we're cash flow negative very massively. And I said, "I really worry about the long-term future of the company and our ability to deliver on our mission if we have that investor because they don't really understand the company. They are not really a good fit with the company." So I told my Board, I will recommend to the directors that we refuse this investment, even though I might regret it dearly in a year or 2 from now if I missed $200 million to get the company to the right place. But I think it's important in business that we know who we are and who we are not and to stick to those principles because this is how you build impactful company, I believe.

I'd say that investor is now kicking themselves for not making themselves a better fit at the time. But I want to get a question in from the audience, which flows on from this question about relationship with shareholders. The question is, is Modena looking to acquire a company in the future with this excess capital or to return dividend to the shareholders? How are you thinking about asset allocation when you look at acquisitions, dividends and other use of your capital?

Sure. Look, every company in the world that starts to be cash flow positive, and it's a new experience for us, is -- priority #1 is to grow the business. As I said, we have this incredible platform that has been built for scale. Today, Modena has 24 drugs in development. But I hope in 12 to 18, 24 months, we have 50 drugs in development because there are so many drugs we can do to help patients, but also to protect people with more vaccines. If you look at the last 40 years, Andrew, there has been more than 80 viruses discovered by scientists around the world who hurt human, 80, 8-0. There are today approved vaccine against 3. Just give you the size of the opportunity to do good for the world by accelerating those investments in science. So really, priority #1 is invest to maximize the impact of the company on patients and consumers. Priority #2 is investing in technology, either via M&A or licensing agreements, to expand the scope of Moderna. One of the area that we are very interested in is gene editing. If you look at last September, we've announced the first agreement with Vertex, where initially we worked with Vertex and we're still working with them, making good progress, to figure the way to deliver mRNA via a narrow sore in your mouth into your lungs because, of course, Vertex is a world leader in cystic fibrosis. But as you might know, Andrew, they are a small percent, around 10% of patients, that do not respond to today's beautiful drug for Vertex on the market because of genetic mutation that they have in their CF genes. And we believe with Vertex, that if we can give mRNA into the lung, coding for the full-length CFTR -- that's the name of a gene -- in their lung cells, we can restore normal function even to those 10% of the kids that don't respond to today's drug on the market. So that's very exciting. But once you get into the lung, the next question Vertex teams asked, because they were very pleased with the progress on the science, was here, "Could you code in your mRNA a gene-editing enzyme like Cas9? Because if you think about it, mRNA can code protein, we've shown it all along, we've shown we can code the human protein into human. We can code the protein of a virus into human, that's what we did with spike protein. In the mRNA, we call this spike protein. We've also shown a few years ago that we can code a whole antibody into the mRNA. So once the mRNA gets into your body, your body will make directly an antibody. So we shown all those things. And so with told the rest of Vertex team, sure. We can call Cas9 or any other gene-editing enzyme in the message itself because an enzyme is a protein. And so we made that partnership last year. And so I think gene editing for us, we believe, is a very important field to expand the potential of what mRNA can do for patients because what we are getting very good at as a company is delivering of nucleic acid. If you look at the entire field, gene therapy, RNAi, mRNA, gene editing, the challenge always is how do you package and get into the right cells that genetic material, whether it's a very small RNAi, like 20 letters, or it's a 4-kilobyte, very big message like in the spike protein of the cystic fibrosis gene, which is around 4,000 base pair. And we have become, over the years, a very good delivery of nucleic acid company. And so what we're trying to do for those potential partnership or M&A activities is to complement the technology toolbox we have to be able to make more medicines for patients. And so the capital allocation of returning capital to shareholders will come as the third priority. It's still early days. We have been only profitable for a few quarters, and we are so focused on how to make more medicine that this is already priority #1 right now. But at the right time, I'm sure with the Board as part of our governance and responsibility, we will look at easy time or does it make sense to return capital to shareholders or not. But priority #1 is more medicines for patients. Priority #2 is technology or M&A acquisition to increase the long-term impact that we can have on patients.

So governments are clearly hugely important stakeholders for a company like yours. And when the U.S. government recently decided to support the suspension of COVID-19 patents, it stunned a lot of your peers, a lot of the industry. But you said you didn't lose a minute of sleep over it because -- and patents wasn't going to affect you very much. But setting aside the practicalities, do you have any concern about the message the Biden administration or other governments are sending to your industry with that IP waiver discussion? Is there any sense that governments are not going to be aligned with your mission and your long-term ambitions?

Yes, Andrew. And indeed, I said because, no, like always, Murphy's law. The announcement by the Biden administration was made the evening before we had our Q1 earning call. And so you can imagine the scrambling -- I think it was around 3:30 p.m., the scrambling overnight. And to a question that was asked by an analyst the next morning, I indeed say that I did not lose sleep in terms of the short-term impact to Moderna on the impact on the sales of COVID-19 vaccine because given there's no mRNA industry out there, even if there's patent waiver, we will not get 1 more dose of mRNA vaccines in 2021 or 2022 in the world because of the patent waiver. The only way to get more mRNA vaccine is to help Pfizer and Moderna scale up faster, make sure we can get raw materials on time, make sure we can get people hired and trained. For example, in Switzerland, the Swiss government is helping Lonza, our partner, to hire people because so far, we were a bit behind schedule in Switzerland on making vaccines because of lack of people, lack of trained, highly qualified people. And so the Swiss government helped us to accelerate the hiring to make sure we maximize the output of vaccine. So those are the type of activities that governments can help us do now. But the patent waiver is not going to help. The piece I worry deeply about the patent waiver, and I hope there are countries -- I have seen Japan, European countries against it, is think about a world where 15 years ago, let's say, there would have been a patent waiver. I would argue that Moderna's growth and biotech's growth will have looked very different in the last 10 years because investors need to know they're going to get a return. That's how capitalism works. We might agree on the rule of capital but that's how it works. And so if 15 years ago there had been such a thing as a patent waiver for any good reason or perceived good reasons, Moderna and BioNTech, which have been much smaller version of what they were in 2020, and we might still be waiting for an mRNA vaccine to be authorized. So I think to your point, as an industry, we should be very worried that patent waiver send the wrong signal to investors and they might impact 10, 15 years out, a cancer drug, a rare disease drug or another vaccine or something else that will not happen because investors would have been worried about investing in biotech where we need to have investors wanting to invest a lot of capital in biotech because this is the century of biology. The 20th century was a century of silicon. This is the century of biology. And we are just at the beginning of this amazing revolution and winning shareholder capital so we can accelerate the impact of biology on human health, but also on the environment. There's a lot of new tools to deal with carbon capture, to deal with new material, to create new biological system to clean the ocean of all and other things, that will happen through biology that we need to make sure all those investments happen.

And I love that concept of century of biology. Let me just get a question from the audience here. It goes, I think, to your -- what you're saying about your employees and about the communities. The question is, have you seen any increase in volunteerism or charitable giving as a result of Moderna's focus on CSR in the last couple of years? And have you found a way of measuring those outcomes?

So we're starting to measure it pretty precisely. The piece that I want to be careful is, because of the pandemic, as you can imagine, just for obvious reason of protecting our employees that were so critical in the vaccine development, in the last 17 months, we have not really advised or pushed people too hard to spend time in the community because we are worried about, first, following local laws of working from home or not doing things that were not absolutely necessary. So I think the data is a bit skewed now. What I'm hoping now as we get back to more of a normal world, we are very lucky to live in Massachusetts where the vaccination rate is very high and the infection rate is very, very low. So that I really hope that in the remaining part of this year, but especially next year, we go back a big time into volunteering because indeed the last 17 months, the number have not been great because we didn't want people to volunteer.

So we've got about a minute left. I want to just throw a very, very quick question. You talked about preparing for the next pandemic. From your work with Western governments on setting up production facilities, to be ready, to be better prepared next time, are you confident that we're doing enough to be ready for the next pandemic?

So I don't think we're yet ready to do our best job in the next pandemic as a society. There are a lot of activities happening. We are working with Dr. Fauci, for example, like we discussed on Nipah, which is a big concern that the infectious disease doctors have, to get this program moving into the clinic because if you think about it, while 11 months was a scientific miracle, I believe we could have done, if we had been better prepared, 6 months from sequence of a virus to authorized vaccine. And for the next time was a new virus emerging, we as a society need to be able to deliver a vaccine authorized without cutting any corner on safety, because that's out of the question, in 6 months. The other piece is manufacturing. And manufacturing I think is going to be a very different game. Why? Because last year, Moderna and BioNTech had never been commercial. So we have been building and we are still building, manufacturing and every month, every week, we make more and more vaccine. Well, look at what the good news is, in 2022, we're going to have 3 billion dose of capacity per year. That's 250 million vaccine a month. And Pfizer-BioNTech from the last public disclosure will be 3 billion to 4 billion. So if you think about it, those 2 companies could in a 6-month time frame each make 1.5 billion to 2 billion dose while you develop a vaccine to authorization. And think about how different the world will have been if in last year, we could have an authorized vaccine in the summer time frame instead of December, which was already a miracle. And we could have had in the fridge, 1 billion to 2 billion to 3 billion doses ready to ship around the world. The shape of the pandemic, given the growth of virus, is exponential. It would have been very different. And that's why I think it's achievable in the next time, but it will require some investment in biology for around 20 viruses. There are around 20 viruses that the epidemiologist worry about. And if you think about the cost, it's peanuts. You need $0.5 billion to $1 billion to study all of this in animals and to run Phase I and Phase II, to know the dose for Phase I and to have enough of the safety database through Phase II. So that if one of those mutants happen as a new emerging virus, you can go straight into Phase III because you know the dose, and you can assure the regulator that this vaccine for that virus is already with a good safety database, that it warrants going into Phase III directly. So think about if we had started a Phase III in March 16 of 2020, we could have had the vaccine authorized in July, that's what I believe.

So I think you've just set out not just a roadmap for Moderna's very long-term plans, but for all of us to think about long term and the century of biology that you referenced and about how to be better prepared next time. So Stephane, I want to thank you. I want to thank our audience for the questions. And just to remind you, a recording of this session will be available later on the Whova platform and on the CCP YouTube channel. They should see a poll question on your screens now very shortly. So please let us know your thoughts and just stay with us a few moments for some closing remarks. Meanwhile, thank you again, Stephane.

Thank you, Andrew. Thank you, everybody.