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

Good morning, everyone. Thank you for joining us for Day 2 of the Goldman Sachs Healthcare Conference. I'm Salveen Richter, biotechnology analyst at Goldman Sachs, and we're pleased to be joined by Moderna. With us, we have Stephane Bancel, CEO of the company.

With that, Stephane, thank you so much for joining us. And to start here, a question on your modalities. You have established 2 modalities or 2 verticals out of the 6 right now, prophylactic vaccines, systemic secreted and cell surface therapeutics as core. And can you remind us what this means and speak to the biological and technology risks that remain in all your exploratory modalities, and the steps needed to derisk these verticals on the forward.

Great. Good morning, Salveen, and thank you for the invitation. So maybe let me explain the modalities by stepping back a little bit and reminding everybody that mRNA is an information molecule, which means that all the mRNA we use across all the products use the same chemistry, the same manufacturing process for all of the mRNAs. And we believe it's a very important derisking because as we know, what kill most drugs is toxicity. And so knowing that now with the COVID-19 vaccine, we have literally a couple of hundred million dosing arms, that's a pretty big N to make us comfortable about the safety of the mRNA. And over time, as we thought about developing the company, as we all know, the critical thing to do with nucleic acid technologies, we've learned it with gene therapy, rNAI, mRNA, gene editing, it's all about delivery. And so what we embarked on many years ago is very deep investment in science to figure out how do we deliver mRNA to different cell types. And so you want to think about the modalities as basically your family of drugs that use the same lipid, the same route of administration, the same manufacturing process. And so -- and we believe over time, and I'm talking another 5, 10, 15 years, not the next 2 weeks, we could get up to 10, 15 different modalities in the company. The piece we love about this modality approach, because mRNA is a piece of information, because we've industrialized, digitalized the company, once one drug works, the next drug in that modality is copy and paste. Because we use genetic information, either from human gene or from a virus sequence, that we drop in the sequence, everything, the rest the same, and here you go again, you have another drug flying to the clinic. And that's really, I believe, the power of Moderna. And so as we thought about all those modalities, what we tried to do, both internally and externally, is to characterize technical risk, what is known in terms of that modality. So the modality that's, of course, the most advanced, that I would say now is a commercial modality, is the vaccine, infectious disease modality, where as you know, we have 9 products in that modality. They use the same lipid, the same mRNA, the same of everything. So we believe those products have a very high probability of technical success. If you believe from preclinical model or early clinical data that we selected the right antigens, and that the vaccine then has a high probability of getting to the finish line. Then there are 5 modalities today that are in development, meaning they are in clinical studies, and they are different stage of clinical studies. And those are the development modality. Of those, in one of those that we've call core modality in development, is the IV systemic secreted protein. That modality, we have human proof of concept, because we were able to show a dose-dependent level of chikungunya antibody at different dose of mRNA. We showed a very nice half-life and area under the curve. And we're also sure we are able to repeat those. A lot of time I hear people saying, "Oh, we don't know if you can repeat those with technology." I'm like this is not true. You can go to the clinical data of the chikungunya or of the cancer product. Our cancer vaccine, we repeat those every 3 weeks on the same schedule as a checkpoint, [ et cetera ]. And even our intratumoral cancer modality, which also is yet a different modality, has also a lot of data now for many years. We will repeat those on a very quick schedule to those cancer patients. And so those are the development modalities. So one is core, where we have proof of concept. The other 4 are in the clinic, and we are awaiting clinical data, and I can guess your next question. And then in research, we have right now 2 modalities that we spoke about publicly. We have other that we have not talked about publicly yet. But one is in the lung. So it's in research, meaning we have not gotten to the step to file an IND to the FDA and to ask the regulator the green light to go to the testing in human. So of course, they are earlier. They're, of course, more risky because we don't have yet the green light from the regulator. But as we've communicated in the last quarters, we are making tremendous progress with Vertex to deliver mRNA into the lungs. We are, of course, working with Vertex on cystic fibrosis, delivering the entire CFTR gene. But because, again, mRNA is information, if we can get that to work, we can then, Moderna, on our own, develop a lot of lung disease drugs that will use the same technology, the same modality. And the last one that we presented last week at our -- or 2 weeks ago at our Science Day, is the ability to get into stem cells via an IV route, and again, a new formulation technology. And again, this is still early. We have not done an IND filing for that one yet. But again, from everything we have shown in nonhuman primate, it start to look really good. And so we have a bit more work to do and also to disclose which couple of first candidates we are going to test in that modality, to then file an IND and take this to the clinic. And so that's exactly what the company has done for a long time. That has always been our strategy is to say, we believe over time, we will have many, many modalities. But it takes time to develop those modalities because we have to invent all the science. One, I think, of a big competitive advantage of Moderna is that we have financial scale and the team to invest heavily in science. We are very committed to develop more modalities, but it hasn't happened in a few weeks. The good news when you have one working is you can scale it very, very quickly. And I think in the future, we'll be able to scale the company faster than in the past because we have such a strong balance sheet now.

Great. And maybe if we could just briefly touch on your processes. You use machine learning and AI across manufacturing and multiple other aspects of programs, including for assessing and predicting COVID-19 variants, escape variants. Could you just discuss the importance of investing in this technology and how it would help you advance the mRNA platform?

Sure, and I think there's 2 sides to it. First is the fact that, as we all know, if you have a highly digital enterprise with clean data, you can use AI in any industry to learn from your data, to make your business stronger. So that's not specific to Moderna. That's specific to any business. But what is required is, one, clean data. So if you have a company that is with paper and analog process and digital processes, it's really hard to do well or to do at scale. And that's really the strength of Moderna is that we invested since the very early days to digitalize the whole company. As you know, Salveen, it's more for people listening who are not aware, we had a Digital Day last year for investors in 2020. And for those of you who are interested, I advise you to go and look at the replay on our website of that presentation. But we invested in digital from the beginning to really be able to have a very digital organization. Because if you think about companies, it's just a lot of processes. But if your process is analog on paper, analog, analog, digital, analog, analog, you don't have the ability to look across the enterprise, to make quick decisions and so on. So we say, step number one, build a digital enterprise so you get clean data across all the functions and across all the business processes. And then what we started to do a couple of years ago is to play with AI in different pockets. And because at the time, the company was mostly an early-stage development company, we really played where we had more history, more data and more scale to start learning how to use AI. And we've used it in science, so in research. And we've used it also in manufacturing. And it's because in those 2 area, we have a lot of clean data, and I mean a lot of clean data. And also, we have more mature teams for example, in commercial, we just have a couple of thousand people now, more mature teams that really understand the technology. But some of the challenges we're trying to face is that we have so much data that even the smartest of our scientists or engineers cannot put all those data in the head and process all those data. Because the power of mRNA is that it's a platform. And so if you think about the company, we have literally a couple of thousand experiments, a couple of thousands since we started the company. Sometimes it's with generation 1 chemistry, generation 2, generation 5, this lipid, that lipid in mouse, in rat, in monkey, in cancer. So there's so much data, and it's really hard for any human brain to be able to absorb everything and look at pattern or look at insights about the science that you could get. And that's why we are using machine learning. So we're doing it a lot in the science to help us see scientific insight that we will not see by just looking at the data given there's so much. In manufacturing, we use it to improve quality control, for example, or to improve yield. And as you say, we are also using it to make -- to predict future state of proteins, like in the case of SARS-CoV-2. Trying to use AI because, as we all know, mutation are the stranded mutation happening in the virus, and you can model that, of course, with enough CPU access on the AWS. And then with ACE2 receptor, which is a binding receptor to a virus, you can see which mutation provide the greater affinity to the receptor. And then you can basically, what I call, fast forward evolution and see what could happen over time. We're using the same, in terms of engineering, some of our protein, some of our candidates. We're using the same technology also potentially in enzymes, we're using in manufacturing. So I think it's a very robust technology. And what we are doing now as a company, as we announced in the Q1 call, is we're basically building an AI academy, led by our digital and HR team. Because while we have great pockets of AI at the company, it is yet not used daily across the entire company. And that's really where I want to go. And of course, it's a journey because the challenge we have, like any company, is that most of the leadership has never used AI in their lives. And so step one was to digitalize the enterprise, which we are very well on the journey. And as you know, we've announced we're increasing by 4x our investment in digital in 2021 versus 2020. And there is a big component of that as well. Because I really believe in the power of compounding, and I believe that if we can learn faster and build a stronger enterprise to serve the customer, the patient and so on, we should be able to create more value over time.

You just touched on investment, and the company is generating a good amount of cash. How do you intend to allocate this capital outside of AI that you just mentioned?

Yes, so I would say we've started to think about it. As you know, this is a new situation for us. We have been cash flow negative for 10 years. And now over the last 3 quarters, cash flow positive and the first profitable quarter in Q1. And so like I would say, any science-based business, our priority #1 is to invest in the business. We have been waiting for this moment for almost 10 years, meaning investing in the science, investing in robotics. But despite we have been always well funded, we have always had many more ideas, given we have a platform and there are so many interesting virus to target than we could afford in the past. And so I think what we're going to see is a very strong investment in the business. As we communicated in the Q1 earning call already, the Q1 R&D spend versus Q1 last year saw a drastic increase of spending. And we have a lot of cool ideas to invest in the business. So that's the first piece. The second piece is indeed investing in the business as well in terms of building capabilities. I mean AI is one of them. I think manufacturing is another of them. Commercial is another one of them where we want to invest in the commercial function to maximize the value of the assets as we get to commercial stage. The other piece is technology. Like any company, we don't believe we are done. We are very interested in complementary technology. So it could be in the form of M&A. It could be in the form of licensing of technology. We're always going to want to be careful on value. I think what you will see is this team is very disciplined about value. We have been through all the deals we have done on the BD side when we were selling or partnering assets in the past. We got good financials for our deal, so we are very value driven. So we'll be careful because some interesting assets might be too expensive in our belief. So we might go the route of licensing if it's available there. Or sometimes, for things we think are really core, we might just decide to invest $10 million, $20 million, $50 million to build that capability. That's important. And of course, the last bucket, as we think about the other priority, is going to be potential return to shareholders. It is way too early to talk about it. But obviously, as part of our role as an executive committee and as a Board, we're going to have, in the coming months and quarters, a discussion about it. But there is no decision that has been made. If not, of course, we'll have communicated it.

Great. And then just on the pipeline data flow, could you just walk us through what we should expect for the rest of the year?

Yes. So I think in the next 6 to 12 months, we should expect quite a lot of data across the board. If you think quickly about vaccines, we're going to have more data on the COVID vaccine, including the younger cohort, 6 months to 11 years of age; the variant booster combo, the number 211 program that has the existing vaccine plus the South Africa strain, 2 mRNA in the same vial. But then also, it's not impossible that we get flu data in the clinic. So you could see across a lot of program, clinical data in vaccines. But most interesting to us I think in terms of inflection of a company, is really on the therapeutic side. We have now 5 drugs in oncology that are in the clinic. Some of them are in the clinic for a little bit. So as you know, with cancer, you cannot predict when you're going to get clinical readout. But if you just look at when the study started, even assuming a bit of delays last year -- because, as you know, in the spring/summer when the country was locked down, it was much harder. So everybody took a little bit of delay on enrollment of new people in those studies. The one that I'm super eager to see, and it should come in that timeframe is the VEGF human data, which is, as you know, is in Phase II, where our colleagues at AZ have been injecting in people's heart mRNA coding for VEGF after a heart attack. The data in pigs that have been published look extremely exciting where we've seen an improvement in ejection fraction, the ability of the heart to pump blood after an MI in pigs. And as we know, while in oncology, I will not bet in any preclinical data in cardiology for heart function, like the pumping function of the heart. I think, as we've seen in the industry across a lot of work, including by colleagues, not only in pharma, but also Medtronic and in the device space, the pig model is a very good predictor to human. Given the good pig model, and also given the very good Phase I data where AZ show that the drug safety was pristine -- I'll remind everybody that this mRNA has no lipid. So it's mRNA in water. And given we have such a big database now with a couple of 100 million people with the mRNA COVID vaccine in humans, I think that just confirm what we saw in the small N in that Phase I. And there was no liver enzyme elevation. There was no cytokine, nothing. And we saw in the Phase Ib an increase in blood flow, which was an important kind of derisking point on the development of that asset. And so I just can't wait to see the data because it will be a transformation in the care of people who survive a heart attack. Because as we know, most people who survive a heart attack have heart failure and have a very low-quality of life after surviving the heart attack. And so if we could restore ejection fraction, then people can have a semblance of a normal life versus going from their bed to bed so far. That will be transformational in terms of care. And then, of course, there's rare genetic disease. As we know, Salveen, those studies read out pretty quickly. What we've said before is we are even blinded as a company to individual patients. We want to have scientific data that makes sense to read and interpret. As you know, those kids are really sick, and so there's a lot of noise on safety because you don't know if it's the disease or if the drug. The good news for all of us, it's the same lipid that has been used for the chikungunya antibody in human. So we have a good sense for the safety profile of that lipid. But again, I think we want, from a scientific rigor standpoint, looking at data in terms of efficacy and safety, when we have enough of an N so that we can make scientific interpretation, then we can share that with the investors and the public. So that's also -- should come in that time frame because, again, rare disease read out pretty quickly in terms of biomarkers. And then the piece that should also be very exciting is if we're able to move one of the new modality into the clinic in that time frame, 6 to 12 months. That would be really exciting. Great.

Great. So maybe moving to the COVID-19 vaccine. How do you envision this market playing out, both near term and the next, this year and next year and longer term as we move to more of a global endemic period? How could pricing dynamics also evolve here?

Sure. So I think it's really important indeed to look at different time horizons. Because we think the market dynamic will be very different during the pandemic phase versus during the endemic phase. As we said many times, which I think has been confirmed by a lot of epidemiologists and scientists now, this virus is not going away. We're going to have to live with it, which we have done with many of our viruses quite well if we have the right tools. And of course, vaccination is going to be, I believe, the most important tool, like we have seen and what happened in the U.S. in the last 5, 6 months. So let's start by the current period. So the current period of the pandemic phase, I think, has a very different dynamic in 2021 than you will have in 2022. And that's because of several factors. First is the marketplace has changed a lot versus what we believed last year in 2020 that it will be in 2021. And this is when the 2021 sales deals happen. They happened last year. Is -- first, there were 6 really vaccine players in the West that were discussing with governments: 2 mRNA vaccine, including Moderna; 2 adenovirus vaccine companies; and 2 protein plus adjuvant vaccine companies. As we know, with time, like in any type of race as we're racing these virus, you can see the different players differentiating from each other and from the pack because everybody started on the same day when the virus was identified. It's basically, we know that the mRNA vaccines have high efficacy, have good tolerability profile in very, very large Ns. The 2 mRNA companies have done a very good job by delivering on manufacturing commitments. And because we've shown the speed of mRNA, because the first vaccines were mRNA vaccines, the ability to go after variants very quickly has been demonstrated. And so if you look at those 4 dimensions, those are really the 4 things when I talk to government officials that they really care about is: efficacy, tolerability, manufacturing reliability and ability to chase variants very quickly. As we know, the adenovirus technologies have not done as well on those dimensions. And the protein plus recombinant vaccines are not even authorized yet in the West. And so when you talk to government versus the discussion we had a year ago, and looking again the discussion in the north, the dynamic is very different. People are basically saying, we need mRNA vaccines for next year and the year after. That's what we want. We don't want other things. As you might know, it's public information. Europe has said that they do not want to reorder adenovirus vaccines for 2022. That has been said publicly by the President of Europe. And so we believe that's really the dynamic in the north. In the south, of course, as you know, through Gavi and through COVAX, we and others are providing product on a tiered price manner. Because, of course, in the south, products need to be cheaper for availability and access. And so that's why it's going to be really hard at a global level to now tell you exactly what's going to happen in the next year also in terms of pricing. But in the north, the dynamic versus what we had last year is quite different. If you remember last year, some of the adeno vaccines were being sold at $3 per dose, which had, of course, an impact on the pricing dynamics that we had. The other piece also that's going to be important to take into play is whenever our vaccine is approved -- because, as we know today, the vaccine is authorized by the FDA. We have announced that we started rolling, filing of a BLA with the FDA, which is another big historic milestone for the company, our first BLA filing. Is that when, hopefully, we get BLA approval, we should be able to go into the private market. Today, we are selling to the U.S. government. As you know, the price is pretty low because at the time the deal was done, there was no clinical data. And also, we had given a big discount to the U.S. government to take into account the grants we had from the U.S. government for helping us on the clinical development. That was important from a value standpoint to us as a company to give a discounted price because of that. So I think the dynamic is going to be quite different as we go into 2022. The competitive landscape is changing. But again, at the global level, it's going to be hard to predict right now where do the ASP lands. Because again, there's also components in the south. But in the developed world, I think the dynamic is positive.

And then in terms of the supply orders that you're announcing now as you look to 2022, can you -- do you have a sense yet on how this might play out between demand for primary series versus kind of the booster regimens?

Yes. In a way, depends market to market, and we don't give a split because then it will become very complicated. But if you think about it, it depends where the countries are. So if you take the U.S. as an example, given adolescent vaccines and then younger children vaccines coming later on in the fall, if you think about it, most people that in the U.S. want a prime series vaccine, will get one this year, regardless of age group. If you think about Europe, which is around 3 months behind the U.S. in terms of vaccination, it is possible that you go into '22 in Europe where you still need prime series for, let's say, younger children. And then you have countries that are way behind the U.S. and Europe, including, of course, unfortunately, the south, where you're still going to have to have a lot of priming to do next year in the, let's say, COVAX countries. And then you have, of course, the boosting, that you're going to need a lot of boosting in the north because of when vaccination started. But even in the south, you're going to want to boost people because people are getting vaccinated now. Even with small numbers, they're getting vaccinated. So it's small percent, but it's big numbers getting vaccinated now. They're going to need to get boosting. I have read in the media, but I have no clinical insight, that it seems that some people vaccinated on some non-mRNA vaccines, let's say, in India, a few months ago are getting sick now with the Delta variant, the 617.2. And so I think the timing to boost is going to really be dependent on how early people have been primed because of the waning immunity, of course. So which variants are evolving at the time and how far away are they from a genetic standpoint to the original strain that the vaccine have been originally designed against. I mean what vaccine people got? Because if you got a 95% efficacy vaccine or 60%, I don't know, even you start from a lower base, you're going to drop faster. And if you get a probably bad variant, you might get sick at a much higher percent other people who got vaccinated. So I think it's going to be tricky. And then of course, there's a question of age. People like, even in this country, that we have the highest risk who are vaccinated, as we know, last December and last January. So those people are already coming in on September at their 10-month clock. And given we don't know really how long the immunity is going to last and given we don't know what variants are going to emerge, as I've told a couple of public health leader through the discussions I have with them on a daily basis, I think for next fall, we, as a community, should rather be 2 months too early boosting than 2 months too late. And there is no way to precisely know when people should be boosted. And I think if we wait for people to get hospitalized and hospitalization to pick up again to start scrambling to boost people, we're going to have a lot of people hospitalized, a lot of deaths that we could have prevented and an impact on the economy. And so given we are all evolving with very uncertain data with a brand-new virus, I think being cautious and boosting early is going to be wise for that pandemic phase in the boosting phase of '22 or late '21. And then to your question. We believe that because of the supply of vaccines in '22, we believe that anybody on the planet who wants a vaccination by the end of '22 will have access to vaccines sometime in second half. It's hard to say precisely. And then the world is going to make, I believe, moving to an endemic phase where people are going to need boosting. Our strategy as a company is to keep evolving the boost to the variants circulating at that time. And if we need to put 2, 3, 4 mRNA in a dose to provide a good portfolio so they have a very large library of antibody boosting, we will do that. As you know, we have already done 6 mRNA in a dose with CMV, and the FDA has been very comfortable with our QC analytical strategy. Because that's one of the complexity of doing it, is manufacturing process and proving that you have the molecules you say you have in the vials in the right ratios. And so I think this is where the world is evolving. And we see the world evolving where, as you know, we are getting close to getting into the clinic through our flu program. And our vision is to basically combine what we believe will be a high efficacy, seasonal flu shot with variants of COVID boosters all combined into a single dose. Over time, we want to develop a very important respiratory annual booster. Could you include RSV? We think so. RSV, as you know, have showed very strong data in the clinic, even 11x increase in antibody titer with our vaccine. And we own that asset 100%. Then Stephen Hoge described at our Science Day, the OC43 and all coronavirus, most probably at the root cause of the Russian flu pandemic, which might have been actually a corona pandemic as well in the 1890s. Again, it is not a development candidate today, but I'm just kind of showing the type of things that could be imagined. And so what we would like to bring to the market is an annual shot that you get at your local CVS or that at your local doctor, where you get a very broad portfolio of protection, high efficacy so that you can have a nice winter. And that we avoid all the hospitalization and all the deaths that have happened even pre-COVID for all those respiratory viruses.

You touched on supply and provided guidance to supply up to 3 billion doses globally in 2022 and between 800 million to 1 billion in 2021. Where does your manufacturing scale-up stand at the moment? What are the gating factors to getting to these -- the upper end of guidance here?

Yes. So I think we need to tear apart '21 versus '22 because I think the challenges are different. So what we've done for '21 is we invested in clean suites, CapEx, to be able to hit the billion mark. We are getting the people to hit the billion mark. The big question, which is a big unknown, is yield that every lot is hitting. It's still a new manufacturing process. Six months ago, we were barely starting to launch product, a few days from now, actually. And then it's raw material availability because, as you know, there's a lot of strain on the supply chain of raw material. And if you think about mRNA vaccines, given there were no mRNA vaccines available commercially last year at this time, the volumes increase are incredible. To give you another magnitude, in 2019 Moderna, as a company across all of our products, we made less than 100,000 dose for that year. Imagine, the shock of our suppliers last February or March when we called all of them to say for 2021, guys, we need around 1 billion dose of your material, equivalent of your material. They look like, what? I mean, the increase is just 10,000x. And so the piece that is important -- because when we make a pharmaceutical product, it's not like when you make recipe at home. If you miss an ingredient that you think is not as critical, you might still go ahead and make your recipe because you have a friend coming tonight or anything. In our case, it's impossible. It would be unethical. It would be, of course, illegal, and we could not even technically start the process. So if we miss one ingredient of many, many ingredients, we cannot start the process. And so the piece that's very hard for us to predict precisely at this stage is where we're going to really land the year in terms of dose out the door by the time we call the year on December 31. As we've increased the lower end of our forecast, given the ramp we are seeing, given the learning curve we are seeing, given the yield improvements we are seeing, we feel comfortable that we should hit at least 800 million doses. The team is working as hard as they can to get to 1 billion dose. Again, as we learn more and as the year goes by, we will refine that range, which is still a bit wide, but this is because there's so much uncertainty. It will be a very different ball game if it was a steady-state business where our suppliers were always reliable. In a way, it was a manufacturing process we've run for a couple of years. That's why we think it was more transparent and more representing or understanding to give a range than to give a precise number. In terms of 2022, it's a very different ball game because we are increasing manufacturing capacity quite a lot by adding clean rooms. So what we try to do is to stick with current sites or current partners, I should say. So we are, for example, we're adding capacity in Norwood, Massachusetts in our plant. So we are moving everything out of the sites that we can move out, like the QC lab and so on, to get all the GMP space that we can to really maximize output to the limit. Lonza in Switzerland is dropping in new CapEx for making more drug substance. We're also adding a site we announced last week, I think, in Holland at Lonza to also do product introduction in Europe. At our partner in Spain in ROVI, we're also going to make formulation. We also adding a lot of sites for filling. Because as far as you think about the market next year, our current product form is 10 dose per vial. As you go more and more into an endemic market, you're going to want to move to single dose per vial. Like the flu market, I think, is a good surrogate for what that market is going to evolve into. And so you're going to start to see less and less dose per vial, meaning for the same number of dose out the door, you need more and more filling capacity, which is why we have been -- Moderna being very active, announcing the Samsung Biologics deal in Korea, the Thermo Fisher partnership, the Sanofi partnership, more line at ROVI. And we are not shy if we want to add filling capacity aggressively. Because I believe that as we look into 2022, drug substance will not be the issue anymore because we are making so much and scaling -- still scaling up a process to bigger scale reactor as we speak. I think the market for the industry, because of this trend of where the market is going from a consumer standpoint, is going to move to really be more constrained on the filling side of things. Because most people have vaccine with 5 or 10 dose per vial, and the end market in a few years is single dose per vial. You can do the math.

And then as you work on COVID on the forward here, is there a way to optimize the products so that you could minimize any side effects that are playing out there? And secondly, maybe help us understand the competitive mRNA space. That you and BioNTech have this modified uridine backbone and have done a ton of work on delivery. But how do you think of the others that are developing vaccines and other drugs?

Sure. So let me unpack the different questions. So on the different mRNA players, we indeed have, since the beginning, used modified urodine. We taken an important license from U Penn. Because we've always seen that modifying urodine was giving us better product performance. We have played around with unmodified urodine like others company do. Modified was always better. We have also played around with self-replicating mRNA. And modified urodine has always been better. If you look at it, there's an interesting data point for people who want to think about the science and connect the dots. If you remember, because BioNTech has never done an infectious disease vaccine in the clinic before COVID, they tried 4 different strategies in their Phase I last year. If you recall, Salveen, they tried the modified urodine and a full spike protein antigen. They tried a modified urodine with a fragment of spike protein antigen. They tried unmodified urodine vaccine, and they tried self-replicating mRNA vaccine. And the one they picked that is authorized now is the modified urodine, full spike protein, which is exactly what we designed from the beginning. And the reason we could do that is we had the, first, 9 vaccine in the clinic with our technology. We've done a lot of work on infectious disease around all the technology bricks you talk about. And in our hands, it always look better the way we are doing it now, which is why we stuck to it. We are very data-driven in this company and look at the science, and fact's our friends. And we filed a lot of patents, the piece that sometime, I think, is not appreciated enough at this stage. And as you know, we've taken a pledge last year to not sue anybody during the pandemic because we really thought as a corporate citizen what the world needed is as many vaccines as we could. And so we didn't want to distract anybody, including ourselves with complicated IP discussions and potential litigations. But we've invested a lot in IP over the years. We have and those are easily findable, a lot of patent issued. Nobody has done mRNA with lipid in modified urodine earlier than us. We started in 2013. That's a long time ago. And so I think it's very different to run a few experiments in animals, like small -- some companies are doing to run their early-stage development data in the clinic. I look forward to see what those other technologies that are not the one we're using look like in Phase III efficacy data. But from what I have seen so far, companies using mRNA with other technologies have not had a great chance to execute quickly and to move quickly to a finish line. Because if you look at it, we're now in June. It's already 50% longer than what BioNTech and Pfizer and us have done. And to my knowledge as of this morning, there is no kind of pivotal data available for those other technologies yet.

Great. And then on the side effects, do you think it's the LNP or the dose that's going to...

Thank you, Salveen. It's -- we believe it's the dose. And as you can look at the portfolio of vaccines that we have using the same lipid -- so again, I will direct people. The first 5 vaccine we did in the clinic were with an all-lipid technology that we do not use anymore. So people who want to do the work, I will look at a vaccine like the -- or AZ vaccine, who just announced their data recently. It's in the same lipid of a CMV vaccine over, obviously, [ COVAX ] vaccine that is on its way to Phase II. And so it's the same lipid. And we really believe it's the dose. And so as you get into a booster market, as you know, Salveen, we've tried 50 microgram and below. And so we really believe that at the 50 microgram dose, the side effect profile will decrease. As you remember, the tolerability profile was always worse at the boost versus the prime. And those 2 are probably close in time as well. So if you think about it, when you prime the immune system, you hit it once with the first dose, and then 3 to 4 weeks after, you hit it again with the same product. The Moderna vaccination has a very high dose, which we believe, especially in the elderly, will provide very strong protection. But the booster -- and we'll have to see all the final data. But what we've shown already, which was 73 boosting at 50 microgram of 351, provide very good protection and very good antibody level. And so I believe that as we reduce the dose, we should be able to have a better tolerability profile. And the time between second and third boosting dose will also, I think, will help on tolerability.

One last question here, Stephane. You talked about the ex infectious disease pipeline. But as you look to the infectious disease pipeline that's coming, what are you most excited about? Is it the flu vaccine or something else?

So I think the respiratory vaccine combos, so COVID, flu, RSV and so on, is going to become a very important part of the company's future. Because first, I believe the flu market has a huge opportunity to expand for at least 2 reasons: One is that a lot of people never took a flu shot before the pandemic, because all technologies in a good year are 60% efficacy; in a bad year, at 20% to 30% efficacy. So I know a lot of people are like, why should I take a vaccine? It's like flipping a coin. But if we could provide to the world a vaccine that has 90%, 95% efficacy, which we believe is possible, like COVID, I think that will increase the size of the market. And the second piece is the pandemic. We are -- all have been through a trauma. And I think that it's a bit like the 1929 financial crisis, led a lot of people for generation to be traumatized by that. My father in law, until he passed, never took a debt except his mortgage on his house, threw a party when he paid the mortgage. Never used a credit card and so on because one of his uncle went bankrupt during the 1929 financial crisis. So all of us have been through trauma in the last 18 months, our kids, ourselves, our parents. And so I believe that if we can bring a product that has COVID variants booster -- because nobody is going to want COVID, and the flu high efficacy and RSV and so on, even the payers will be very happy because it will increase compliance. What is the chance that, let's say, an elderly will get an RSV shot, a flu shot and a COVID booster shot versus the chance they get 1 shot that has all those 3 things at high efficacy? And so I think this is going to be a very prime product for Moderna, and we're going to be able to keep upgrading it and making it better. A bit like a software update every year you get on your phone or whatever, we'll get better and better respiratory vaccine evolving with the viruses so that we don't have to worry about it and all will be healthy and enjoy our lives. The other one I'm very excited about is CMV, cytomegalovirus. There's nothing on the market. I believe it's a 2 billion to 5 billion product opportunity per year. Every woman who wants a child and is having a child should be protected before pregnancy. The clinical data we've shown in Phase I and Phase II are very, very strong. There is no vaccine on the market. We're going to be getting very soon into Phase III. And so that's one that I'm really excited about. And I want to get to market because I have teenagers, girls, and I want to make sure that by the time they want a baby, that the vaccine is available.

Great. Well, with that, Stephane, thank you so much. Really appreciate the time today.

Salveen, thank you very much. Have a great day.

You too.