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

Good afternoon. Thank you for joining us for the Goldman Sachs CEO Unscripted Conference. We're really pleased to have Stephane Bancel, CEO of Moderna. To start off, Stephane, thank you for joining us, and happy new year. To start off here, Moderna has announced in vitro data suggesting that the current COVID-19 vaccine formulation has good potential for cross protection against Omicron. Could you provide an overview of what we know thus far about Omicron and Spikevax's ability to address this variant?

Sure. So good afternoon. Happy new year, Salveen, and thank you so much for having us today. So as we've shared publicly, very similar to other vaccines, given the big genetic drift between the Wuhan strain and the Omicron strain, as anticipated, when we just saw the sequence on Thanksgiving weekend. We're seeing a very material drop of neutralizing antibody post the second dose. The great news is that with the third dose, the booster dose, you see a very nice recovery. What is not clear yet is what's the impact on duration. We're going to learn more in the coming weeks. And of course, as always, as soon as we have the data, we share it, and I'm sure a lot of labs will be able to get real-world data and be able to also put it together. And so I think the best thing people can do right now, if you've not had your booster, I expect in this audience everybody took -- already have got their booster is to get to a CVS somewhere and to get a booster because it's the most important thing for Omicron. As we see the number of cases around the world, it's literally super infectious. Thankfully, it seems to be milder in terms of severity even previous strains. It's still going to impact a lot the economy and the hospitals because as we're seeing with school and traveling and everything, it's just so complicated to get anything done because so many people are testing positive.

And when we think longer term here, what does an endemic phase look like? And when could we enter it? And just curious here on what your thoughts would be about vaccine usage at that time?

Sure. So as you know, since our 2021 Vaccine Day that we had back in April, we have been saying that we believe, first, this virus is not going away. It's not magically leaving the planet. And we're going to have to live with it, like we've done with many of our respiratory viruses. The flu is, of course, the most known one and also other coronavirus [ HCoV ] OC43 that circulate in the community that cause disease, hospitalization and deaths, especially in people at risk. And so we think that we're going to transition from pandemic into endemic. It is highly possible that Omicron has accelerated the move to endemic. I just want to be cautious because with biology, you're always one day away from being very surprised. Like the number of mutation on Omicron, I think, surprised the entire scientific community. There are so many in one mutation -- in one shot. And so could we go -- post-Omicron, given it's going to be so infectious, I believe most people, if not everybody, is going to get Omicron. You might not feel it because you might be asymptomatic, if you got boosted recently and you were well vaccinated, where you might have mild symptoms, hopefully. But given it's infectivity, it also means that people are also going to mount an immune response to Omicron if you got naturally infected. So if you got 3 dose of an mRNA vaccine and then you get Omicron infection, you're going to start to have an interesting repertoire. What is totally impossible to predict is, is there a new mutation coming in a day, in a week, 3 months that is worse in terms of severity of disease. As we look at viruses, and if you look at the evolution of viruses, they evolve to infect more and more, and we have seen that through this one because it's a natural evolution and permutation of nucleic acid on the message. But there are mutation that randomly could be making the virus severity -- disease more severe. And that's a piece that we'll have to just be cautious about. To your question about the endemic, assuming Omicron is an acceleration to the endemic phase, I still believe we're going to need boosters in the fall of '22 and forward. The piece that we don't know yet on Omicron is the duration of protection of a third dose. But again, given the genetic shift that we saw, I would be surprised when we get that data in the coming weeks that it's holding nicely over time. I would expect that it's not going to hold great. Thankfully, it might get for people that were boosted in October, November, December, January time frame should be able to hold them into the spring, where we're spending more time outdoor. And as we've seen already a few times, we have cases going down. But I worry about next fall, fall '22. As you can see from just a few announcements we have made recently, we have the U.K. where they ordered for fall of '22 recently from Moderna. We have South Korea where they ordered more. We have Switzerland exercising the option. And we have quite a number of discussions going on right now with current governments that have provided the Moderna vaccine but want more for fall of '22. The piece that has also helped us is that if you look at '21, it's interesting. At the beginning of 2021, the entire planet believed that the 2 mRNA vaccines were very similar in performance. As we exited '21, the real-world evidence has shown that the difference of mass of mRNA in each of the 2 mRNA vaccines provide actually a different shape of a curve of duration of protection. And if you look at data from around the world, and there's literally dozens of application with massive amount of data in the tens of millions of people that the Moderna vaccine holds longer efficacy than the Pfizer vaccine in terms of efficacy against infection, efficacy against hospitalization and so efficacy against death. And so it's a very different world where governments are set to see the difference. Even governments, look at the U.K., this is the country of the Oxford-AstraZeneca vaccine. They are not using it as a booster, it's either Moderna or Pfizer mRNA vaccine as a booster. And so I think as the world is looking into the fall of 2022, and I know because people are so focused on Omicron now, they might not realize that a lot of senior members of governments are focusing on the fall of 2022 and getting better ready for it. They really believe boosters are going to be important. So as we look in '22 and '24, will everybody need a booster every year? I don't know. I think it's way too early to tell. It depends on the pace of mutation of the virus, how much drift we're going to see. But I think it is safe using the OC43 coronavirus historic data. I think it is safe to assume that people, let's say, 50 and above, people that are at risk because of their jobs or because of their preconditions, are going to want to be boosted every year. In the case of OC43, we see disease in people at risk every year. And then I think there's a lot of people -- I mean, look, I'm getting close to 50, I'm 49, but Salveen, you're much younger than me. There are other people that are educated that follow what's going on. The media is helping a lot to carry that information. I believe there's a lot of people beyond 50 that are just not going to want to get sick. And if it takes a shot and you take your shot, you go to your CVS, you get your booster, I think actually, a lot of people given the high awareness where it is today around this virus and the consequences of it not only for you but for your family. In a household, when somebody is sick, everybody gets sick. It's really hard to isolate inside the house. But if you have parents or older people in your family or family circles that you don't want to get sick, you might just get vaccinated to not get sick, but especially to not get hospitalized people of an older age.

So maybe a 2-part question to follow this year. So clearly, the mRNA platform is flexible and you're developing or evaluating an Omicron-specific vaccine. So my question is, is it going to be too late given the infectious nature of this? And is it more important then in terms of an evolutionary standpoint of where we're going to go with next variants? And then my second question is you had data recently where you showed that the booster at the original 100 dose was more efficacious. And so would it seem that the likelihood is we should be taking double the boost or a fourth dose?

Yes. Those are great questions. So let me start with the first one. So yes, we are working, of course, on a Omicron-specific candidate. It's going to be in the clinic very soon. I mean, as you know, both for the Wuhan strain in last year when we did the Beta-specific strain, we get into the clinic into 60 to 90 days. So there's no reason why we're not going to do the same again. And we're also going to be playing with combinations because always at Moderna, we want to be ready to have flexibility. Because, as you know, there are some mutation in Delta that are not in Omicron. There are some mutation of Delta that are in Omicron, but not all of them. There are some mutation of Delta that we believe made Delta more severe in terms of disease. That it might not be a good thing for all if Omicron were to evolve within a, let's say, a Pi, if we should choose that letter of the Greek alphabet, of a Pi variant that has the Omicron variant plus some of the nasty mutation of the Delta that were not in Omicron. So we just want to be playing with a lot of things to help the data to be able to respond quickly to what do we make in manufacturing to the regulators and so on. And so I'm not solving for helping people next week because this is not happening. I think if anybody believes that any company will have an Omicron-specific booster in 10 days, 60 days, this is not happening. And so what our eyes are really on to is getting people boosted right now with the current product, so they can go through the next 2 months because as we've seen the South Africa data, London data, they're already on the way down from their peak. And so I think this is going to burn very quickly, this one, much quicker than any of the variants that we have seen so far. And so our eyes into what was in the clinic right now in the combination is really on to the fall of 2022. We might be able to help the Southern hemisphere. We should not forget the people in the South, of course. We were able to help the Southern hemisphere as they get into their winter, and that will be great, and we'll try to do as much as we can there. But for the Northern hemisphere, which is most of where people are listening from is I would really think what we're doing today is for the fall of '22, having the right product. And that's really important.

And the company, I guess, just coming back to fundamentals of the company, you've seen unprecedented growth over the past 2 years. How will you keep the momentum going here? And where do you see the company in the next 5 years?

Wow, a lot of things are going to happen in the next 5 years. So I mean, as you know, we built the company from the beginning as a platform company. We've said with the founding team when we started Moderna that it will never be a one-drug company -- sorry, a 0-drug company or a lot. It will not be a 1 or 2-drug company. It makes 0 sense. And so we built the company assuming success and assuming scale. And so we accelerate in robotics. We accelerate in science across the platform to have a lot of application of mRNA. We received manufacturing in digital, now in AI. So we've got this company ready for scale. What was always a limiting factor was cash because while Moderna was pretty well-funded, as you know, we used to invest in the business around $500 million a year in '17, '18 and '19, pre-pandemic, and the team accomplished a lot with that capital. We are sitting in a totally different space in terms of the magnitude. As we reported earlier this week through our annual shareholder letter, we finished the year with around actually a little bit over $17 billion of cash. We have, of course, no debt. And so -- and we're still generating cash every month. And so you can just start to get your head around ways we're now going in terms of the expansion of the business. As we've said as part of our capital allocation strategy, our #1 priority is to invest in the company. As I said for so many years, we were capital constrained. Now we have a lot of capital. And so what you are seeing is an acceleration of programs that are already in development because capital, like an infectious disease, can help you grow faster to data. You just need a bigger end of participants in the study. That's mostly capital driven. So we're doing that. We are also expanding the development pipeline. We have 38 programs now. And these 38 programs, it's a lot of programs. And what the world doesn't see yet is there's maybe another 20, 30, 40 programs in the labs using the same technology that are going to flip into development, clinical development in the next months, quarters. And so you're going to see this pipeline really mushroom. We're investing a lot in manufacturing in digital as well to keep building the company because we have very strong digital in research, early development. But we never had the time before to build late-stage development, how do you industrialize filing BLAs, which we need as a company. We only filed one so far, but we plan to file thousands. So we want to industrialize from a digital standpoint how you do the CMC section, the clinical data and all the components of the BLA. We have been industrial before how to file INDs. And as you know, we can file INDs very quickly as Moderna, and so we want the same thing on the back end of a regulatory process. And then in commercial, we really believe that given our strategy is to develop first-in-class products, a best-in-class product that we do not need armies of sales rep. But we need to be able to engage with the consumers directly, and there's a lot of work we're already doing, and also work with governments as our customers. As you have seen, we're trying to be very creative, like with some recently in Canada and in Australia. We're literally building plants in those countries with multiyear contracts agreement for respiratory vaccines, where we can tweak the variant that the country cares about. It will be important for flu, for corona, for other things where we can literally talk to our one customer, the Health Minister, so okay, what do you want in a vaccine and which components you want and so on. And so there are the type of investments we are making to the business. And so I think if you look at 5 years, which is a long time, Moderna is 10 years old. So if you look at half the company life forward, I believe that we're going to have most probably the biggest vaccine pipeline in the industry. I mean just look at today, what we have with CMV in Phase III, flu in Phase II/III, RSV in Phase II/III. We're just a couple or more programs away from having the biggest [ less tax ] vaccine pipeline in the industry, bigger than GSK or Sanofi or Pfizer or Merck. And this is why I think the velocity of the platform is what's going to surprise people. And then there's, of course, all of therapeutics, where we're going to have this year is going to be exciting. We have a readout in oncology. The personal cancer vaccine is fully enrolled. We have to wait. We said most probably later this year, we should get data in a head-to-head study compared to [ KT ] drug in monotherapy. We have a triplet in oncology, AZ's IL-12. We have 2 new programs, rare disease program. AZ said they're going to move forward with the VEGF program following the Phase IIa positive data. And so there's going to be a lot of clinical readouts, and we're going to just keep expanding in the 5 therapeutic area in which we are. And we will keep investing in technologies like genomics. We believe CRISPR-Cas9 is not necessarily the best gene editing technology. It was the first one. It's a great technology. But I don't recall any time in the history of science that the first technology human develop or discover is the best one in any field. So I believe that there is a space for Genomics 2.0 and our partner with Metagenomi, we think, is in that right direction. We've evolved novel enzymes for doing editing. So there's a lot of things that we're investing in. So to be precise about where we're going to be in 5 years, I don't have a crystal ball, but I just can tell you, we're going to be surprised about the scale and the human impact of Moderna 5 years from now.

Great. And in your annual letter to shareholders published this week, and you detailed 4 key franchises you're going to focus on in 2022, which include pan-respiratory, single-dose booster vaccine, first-in-class vaccines against latent viruses, therapeutics based on mRNA-encoded proteins and therapeutics based in mRNA-encoded gene editing enzymes. Could you just walk us through your thinking about the opportunities within each of those and then the plans for them this year?

Sure. So on the pan-respiratory, our vision is pretty simple. There are around 10 respiratory viruses that hurt human everyday around the planet. They get too sick. Worse case, they get you hospitalized. And worst, worst case, they kill you. We believe the world deserves a single shot where you get all of those viruses in a single shot. And that is also adapted to the year with mutations and also adapted to where you live. Because we know with flu, for example, which is highly documented, some years, you have different H3 strain in North America, in Europe and in Asia. But you get one vaccine today. And then it's, oh, it doesn't work. Yes, it doesn't work, but it's not the right science. So we believe that vis-a-vis to decentralize local manufacturing, like we've done in Canada, Australia and there are more discussions ongoing. So when I think about it, it is going to be a bit like an iPhone model, if you want, of respiratory virus where every year, you get more and more products. So start with COVID and COVID booster, you have COVID plus flu, you have COVID plus flu plus [indiscernible] we're going to keep adding new app. And we're going to refresh each app to the variant of concern that year, other variants. And if we need to adapt to the region in language, if you want, we do a Japanese one and then we'll do a Canadian one. And they will be done in different factories, and the technology is totally able to enable that. And so our vision as a company is we should have a world in which you shouldn't get sick or worse hospitalized because of a respiratory virus. That should be over. Polio was eradicated. We're not going to eradicate those virus because they're going to stay in the world. But we want people that want to be protected to be able to just walk to a CVS or a GP, get their one shot a year and have a good winter. So that's a pretty big goal, and we think it's an incredible product opportunity. If you look at the flu market today, it's around 500 million doses. How big is the market for the product I described? Is it $1 billion? It's $2 billion? How much share could we have? This -- we believe we could have a very material share. I'm not saying we'll have 80% market share. I think we have very material share. And then the price. What will the price of such a product? If you think about a sum-of-the-parts analysis of the cost of an RSV vaccine and a flu vaccine and all the COVID and all the components, the cost of compliance or the value of compliance for the payers, as I talk to health care ministers as we do those factories and all those contracts for COVID and COVID boosters, and I talk about this vision that we have, they just love it because they worry as you have pharma company working on RSV monotherapy and flu existing and now COVID, if you just look at those 3, not the 10, just those 3, like what is the probability of 50-year-old is going to get a flu shot every year? It's low. But if you, Moderna, can guarantee to me that in the one shot when I know it's in the arm, that I know that person is protected, that is extremely valuable to us. So that's the first franchise. So we believe it's going to be a gigantic franchise, and we won't stop until this product and this industrial engine is up-to-date in all those regions. So that wherever you live on the planet, including the plant we are building in Africa, same thing, it's where we give in the planet. If you decide to, you will have a one shot a year adapted to your region that prevent you from being sick or getting hospitalized for respiratory. So that's Pillar 1. So just like this, it could be a gigantic company just with that. Pillar 2 is latent viruses. So as not everybody knows, latent viruses are viruses made mostly of DNA that are very stable viruses that unlike the respiratory virus that are made of mRNA as the virus that you clear after your infection, once it's infected by a DNA virus, you're infected for life. It's in your body forever. The one that I know, of course, is HIV, it is HPV. Some others are not as well known like CMV, which now is in Phase III. EBV, which just announced this week is now in the clinic. There is VZV, there's HSV and there's a few more. The big issue with latent viruses is that some of them give you a disease when you get infected, like EBV gives you mononucleosis, but all of them create long-term damage to your health. And HPV is known to lead to cancer where, for example, EBV leads to a very high-risk association. It has not been proven yet to some cancer as well to multiple sclerosis. And so there's a lot of things out there that hurt your immune system. And as we all know, our immune system has a central role to play against infection as we live and against cancer. And so it is not surprising if you put a drug on the immune system strength by having HSV in your body and EBV and CMV and a couple more, this is not good for your even strength. And so we believe humans should have again the opportunity when they're young to get vaccinated against those latent viruses, so that they don't have those long-term sequelas of those viruses. And so that's another big chapter. Because those viruses are DNA-based, they're very complex. Traditional technology like protein or live attenuated vaccines are not well adapted for those, which is why there is no CMV vaccine on the market or EBV vaccine and so on and so forth. And so what we're doing at Moderna is we're developing multi-mRNA products, like the CMV vaccine has 6 mRNA in each vial, to do what we believe is the right biology to protect humans. And so that's the second layer, I would say, on our strategy is go and build the entire portfolio of latent viruses that have no product in the market, get those to market and make sure they're available to young humans so that they are protected for their lifetime. So that's Pillar #2. The third one is around treatment. So we're leaving the vaccine front. It's around treatment where we have to use mRNA to code for a human protein to create a medicine. So that's in cancer, autoimmune disease, rare genetic disease and cardiovascular. So between infectious disease and those 4, if you look at it, we are in the 5 biggest product area that drives the biggest medical needs. And there, the idea is in the mRNA like in genetic programs, we code the protein that is in your DNA and my DNA to have medical benefits. And then the fourth pillar is given we believe humans are going to figure out how to do gene editing safely over time, I will not bet against human ingenuity. Yes, for me, it is just a question of time and having the right technology and the right optimization. We think we have a massive role to play here because through the third pillar of using mRNA for treatment coding human protein, we can use this exact same technology of assembly, the cell manufacturing capability to code not a human protein in the cassette of the mRNA but to code an enzyme, which, of course, is a protein to do the editing of the DNA of the human cells in vivo in your body, not ex vivo. And so that's something that, of course, we won't have a drug approved next week with that application. But given we have always a very long-term view on things, we think, especially on the rare genetic disease, we're starting with making an mRNA coding for the human protein like MMA and cystic fibrosis and so on. But once you get this working and you have a preclinical expertise, animal models, clinical expertise and you already have a ration of approved patients, you can come after with, let's say, a next-generation product that is not a treatment but a potential cure or depending on the organ system and cell regeneration, it's something that you might need a dose every year or a dose every 5 years or whatever for the [ handling ] of the liver that there's a lot of cell regeneration. That's one secured for life might not work, whereas it might work in other organs like the eye or the brain that have slow cell turnover. So I hope that gives you a sense for those 4 pillars.

That's helpful. Thank you. And you also noted that you had over $17 billion in cash and equivalents exiting the year. So what is your strategy for deploying this cash on the forward?

So probably #1, as I said, is invest in the business. Given we have this platform, we want to create a lot of drugs. We believe it's how we're going to create the biggest impact to human care but also the biggest value for our shareholders by creating those medicines. The second priority for us is technology investment. So outside the company, we did a deal with Metagenomi in Q4, which I think is a good example of the type of things we're going to want to do is to use the capital to expand the platform. So we're investing a lot internally using our research budget to expand the platform, but we already have a very product patient strategy and culture of the company. We don't care whether technology is invented because in Moderna, it's great. But if there's a lab somewhere, other academic or a start-up that has a cool technology that you could plug into the Moderna platform to expand the platform where we'll be very happy to get into business, which is what we've done. And it was a mix of upfront and equity into the deal, and then milestone and royalty give assets that are being developed and, hopefully, commercialized. And so you're going to see more of this. People sometimes ask me, are you going to do a big acquisition? We will, of course, contemplate acquisitions. We do not have a policy with the Board against acquisition, obviously. But it will have to be something that makes way a lot of sense for us. It will have to be nucleic acid. We are not really interested to buy a small molecule or a large molecule product or company because we believe the beauty of Moderna is nucleic acid technology and this ability to really have a true platform. And so could we buy a nucleic acid company? We could. It would have to make sense for us, and we have to be at a price that we think we can create value in the long term. So that's the second pillar of our capital allocation. And then the third pillar is returning cash to shareholders because if you cannot find a good use in the business or through external collaboration, we will, of course, return it to shareholder. It belongs to the shareholder. As we announced, I think it was in the summer, our first share buyback for $1 billion. We will update at the right time people on those plans. And if it makes sense and if the Board agrees, we will do more. We want, of course, to be cautious. But given we have a $17 billion cash balance and given that we have a very nice book of order for 2022, given customers are starting to realize we have the best mRNA vaccine on the market against COVID, that I anticipate a very strong cash generation as well in '22. So if you just project less than 12 months from now, given we are in January, we could be sitting on a very substantial cash balance at the end of the year. So going to be thoughtful with the Board to figure out how do we deploy it. But also, it is very prudent for us that we create value. This is a team, if you look at the history of the company when I joined, there was nothing. The company has a large market cap now. And even at the time of the IPO, we had a very large market cap. And so we are very focused on value. So as we see the opportunity to deploy capital to create value, we will not be shy.

Great. And maybe one last platform question here. You've talked about the potential to scale up the pipeline with additional modalities over time. You started out with 6. What constitutes true biological and technological derisking for you of these verticals and in order for you to then invest in those specific verticals or modalities as you call them?

Sure. So indeed, we're actually 7 modality now because there's one in the lung that we just moved from concept into development with the great news we shared with our colleagues at Vertex that we're taking together an mRNA program inhaled in the lung, which is a new delivery system for us that we developed for the Vertex colleagues. And so the way we think about those new modalities is when we start, we don't know if the technology is ready for prime time. It's ready for the clinic, of course. If not, we'll not move an asset to the clinic. That will be unethical for the participants in the studies in terms of potential risk and false hope that we will give them. So we do that with a very strong preclinical model that we feel very comfortable engaging with the FDA and taking an asset to the clinic. But until you have a human proof of concept, we don't know if the technology works. And so what excites me about 2022 is we're going to have clinical readout in oncology, in rare disease and autoimmune disease, so 3 of our vertical is going to be really exciting. And what we're going to do is that if we have positive signal, you will see more programs going from the lab to the clinic very quickly. Why? Because, for example, rare disease. We have quite a number of programs in rare disease that are ready to go to the clinic. The reason we have not taken them to the clinic is we don't know yet for sure today if our current technology to deliver mRNA into the liver working safely to create patient benefit. And so because of the ethical consideration I talked about before and because of the cost also, it's that to develop a drug, given the platform we have in the preclinical setting, you're talking maybe $0.5 million, maybe $1 million. So it is not a large capital that you're taking a big risk on in case the technology was not ready. But getting all the clinical work done, given it's a small amount of capital, assuming success, will be that what if we have 5 or 10 rare disease drugs ready to go to the clinic, if we have PA or MMA with positive signal in the coming weeks or months. That's a bit of a mindset. And so we have developed a lot of programs in preclinical that if we have human proof of concept, you will see us deploying into a clinic to expand. Like we do in vaccine, I always tell investors, look at what we've done in vaccine. We go first slow and disciplined in terms of clinical investments. But once we have signaled and we believe that technology is ready, then you see a lot of drug coming forward. And that's exactly what we're doing -- keep on doing. Again, we're really obsessed at the company about creating value and managing risk. But when we see something that we think can create a lot of value given the balance sheet we have, we won't be shy to develop it aggressively.

Great. And so maybe heading to 2022 contracts for COVID-19, you talked about the recent -- sorry, you talked about the recent contracts that have been signed here, could you just walk us through where you stand right now and how that's being played out versus both the primary series and the boosters of Spikevax?

Yes. So if you think about it, where the world is now at a -- I'm oversimplifying, so I'm happy to go into specifics. But basically, the OECD countries are all in booster mode. Because in the U.S., as you know, since May, we have been swimming in vaccines as a country. In Europe, it was more on the September time frame and then different countries at different times. But if you look at it -- in 2021, anybody who wanted a prime series in the North was able to get their hand on one, and it was free. And the North has already moved -- really moved to an mRNA world. If you look at the U.S., it's really the mRNA vaccines in term of market share and people preference, both doctors and consumers. It's the same in Europe. We just talked about the U.K. where even the Oxford-AstraZeneca vaccine is not used anymore in the U.K. In Europe, it was stopped actually in Q1 of last year. You see the same thing in Japan, Australia and so on. So already in the OECD countries, it's an mRNA market, and I believe it's going to stay so. And in the South, there's still a lot of boosting -- sorry, priming to be done, mostly in Africa. If you look at Latin America and Southeast Asia, there's been a lot of access to vaccines through either the mRNA vaccine, the Chinese vaccine, even the Russian vaccine has been used quite a lot. The place where really access has been an issue is Africa. And while in the first half or up to September, October, it was really a vaccine supply issue. There was not enough doses for the world. That has already switched. There is plenty of vaccine supply today. As I've said publicly, I think it was around Thanksgiving. We have had in November, December, depending on the day of the week, between 50 million and 100 million doses for COVAX in low-income country, sitting in our warehouse waiting to be picked. This was the first time in the pandemic this happened. It was always hand-to-mouth, hand-to-mouth. You make a ship, you ship, you ship. And for the first time, we're actually a warehouse space issue, which we managed, of course. But it was kind of an interesting point in the pandemic where we could make vaccine faster than COVAX could deploy them in the field. And the issue they have and I talked to several organizations is really the last mile in those countries is how do you get vaccines in terms of storage in those countries, in terms of nurses, doctors, access to remote villages and so on. But that's really the issue that exists, so it is not a vaccine supply issue. It is not -- we've seen in some media reported that this is not true. You could ask either Albert at Pfizer, you can ask Pascal at AZ. He will tell you the same thing. I spoke to them about this. We have -- we are waiting to ship vaccines for low-income countries now because they are the one telling us, don't ship there. We don't know what to do with them. We have too many.

Got it. And then from a supply standpoint, do you have -- are you still looking at 1.4 billion to towards 3 billion doses available this year?

Correct. So if you look at the numbers, we just announced around 800 million doses for the year. That means if you look at the math, around 400 million doses were made -- sorry, yes, 400 million doses that was made in -- and shipped, sorry, in Q4. So you can run rate, that is 1.2 billion. And as you recall, we made a lot of investment to double the capacity outside the U.S. drug substance wise and to increase by 50% in the U.S. last year Q1. That capacity is coming online in Q1 this year so this quarter. So -- and it was for 100-microgram dose because the boosters was very tiny part. We don't have yet a presentation approved that is for booster. It's still the 10-dose in a 100-microgram dose vial. And so if you look at 2022, with this ramp in which we are with the existing capacity and the new one coming on top of it and then the 50-microgram, which is our booster dose, we really see a world where we're confirming that we could make 2 billion to 3 billion dose this year if there is demand for it. We have the manufacturing infrastructure to do so.

And where do you stand in terms of pursuing supply agreements with geographies such as India and China?

Yes. So I cannot comment publicly because we have not made any statements recently. As you know, China has a lot of local manufacturers. India has also a lot of supply of vaccines. So we are talking to those governments. But as of today, nothing has been finalized.

Got it. So maybe pivoting here to the seasonal flu vaccine where we saw data in December, and there was a little bit of a mixed reaction from the Street. Can you help us understand here what you're trying to achieve with this first kind of speed-to-market approach and then how you do think it will disrupt the flu market in the end of the day?

Yes. It was quite interesting to see indeed the reaction because we were super happy with the data. And I think it's because, as I said, this pan-respiratory franchise we're focusing on as our company number one priority, I think the analogy is the iPhone and hourly minutes, which is we believe the ability to get a good product on the market and to iterate quickly to make it better every year is the winning strategy because of combination with COVID. Because of the piece where we're going to take a lot of share, we believe, as those start combining is what we need to start in flu is non-inferiority to the best product. And that's a bar we set for ourselves. To be able to start to play in a world where we have the flu and COVID in the same dose, is the flu is at least as good as the best product on the market. If it's better, great, but it doesn't have to be. It cannot be inferior to the best product. And that's exactly what we got. We got a level of neutralizing antibody, as you know, that is as good as the best flu vaccine on the market, and it was our first time trying. And as we explained at the call when we showed the data and before at our R&D Day in September is our strategy is very simple. If you want to -- so with 4 mRNAs, coding for 4 recommendation by WHO, because we need to do that from a regulatory standpoint to get authorization. And we showed there that it's as good as the best vaccine on the market, so it's not a bad place to start. And then we're going to add more mRNAs, especially, I think, on the H3 domain as Stephen Hoge, our Head of RNA, described because we want to be able to increase the coverage of different H3 strains to increase the efficacy. Because again, if you don't have the strain making the antibodies, if you get infected by that strain, it's not going to work. So it will have an impact on efficacy. So that's the first easy fix that we have or improvement -- sorry, not fixed, improvement that we have. The second one is to add the HA -- the NA, sorry, the NA antigen. Today, the vaccine on market on HA, we believe by adding NA in addition to several HA, we should be able to get to a place where we have a vaccine that has very broad coverage, that will impact the efficacy and get us from this place where this is best-in-class today on the market and Moderna at the same level, that we're going to be able to, over time, move up. And then the combination with COVID as well, I think, is going to make us gain share. And so again, interesting sort of response by the market. I can tell you, every government we showed the data to, i.e., the buyers of our product, they were afraid. They were afraid that if you can give them that and COVID in a single shot, they are buyers.

So maybe just pivoting to that. If you are going to combine COVID and flu and then other respiratory diseases, how do you manage the reactogenicity, the side effect profile here in order to make it benign enough that people will be willing to take that kind of all-in-one shot?

Sure. And I think there's 2 things we're doing. First, as you know, we reduced the dose of a booster to 50 microgram. As you know, when we developed the vaccine last year chasing the pandemic, we had not the time to do a lot of dose optimization in which we guessed the Phase III dose, which I've never done in my life before, developing medicine between 50 and 100. And we picked 100 because it was the tolerability profile was good enough. And given nobody had any idea of how much antibody you needed, we need to solve for efficacy because we have a pandemic and people are dying right and left. And so we went to a 100-microgram dose. We realized after we had the Phase III where it was great efficacy, but maybe 50 will have worked. And we saw the Pfizer data at 30, so I know maybe 50 would have worked, which confirmed in the booster, which is at the level it's approved. The second piece that I think people don't always connect the dot because they are not doing that 24/7 like we are is we believe the reactogenicity of our product is based on the antigen and the quantity of antigen that we pack in the product, which is different from the other mRNA vaccine because of the lipid. Those 2 products are using different lipids. Our lipid is biodegradable. As you know, Salveen, but maybe Paul don't know that, in the cancer setting, we have used the same lipid that is in the COVID vaccine or the flu vaccine in cancer, intramuscular at 1 milligram per dose. It's 10x the dose of the prime series of COVID. It's 20x the dose of a booster, 20x. We used it every 3 weeks for like 10x in a row, every 3 weeks, 10x. And the data has been published and so there is no reactogenicity issues, which makes us believe, and I use the word believe because in science, until I have the data, I won't be able to know for sure, but which makes us believe scientifically because the lipid is biodegradable because we have the Phase II -- sorry, the Phase I of PCV showing at 20x the dose, we have no reactogenicity. The reactors we are seeing is linked to the antigen. And the overall triangulation I make to that conclusion is the data on the vaccine. There's always more reactor on the second dose than the first dose, weight is the same product at the same dose, so it's an immune reaction. And if you look at the side effects, they are mostly systemic, not local, which is different than the Pfizer vaccine. And the systemic side effect is an immune response side effect. The local side effect, we believe, is more of a lipid side effect. If you have a lot of reactogenicity at the site of injection, it's a lipid. If you have fever or chills, that's a systemic side effect. It's an immune response, which is much more linked, we believe, to the antigen, to the quantity of antigen. When you come back to the second or third dose because although it is higher, you make so much Spike protein that your immune system is very upset with you, which is good because you're going to make a lot of antibodies. So I do not worry and we do not worry as a company about our ability to combine those components to get to 150 or 200 micrograms because we do not believe it is a lipid issue. We believe it's the antigen. And as you mix them, we think we should be fine.

So Stephane, lastly, when you look at the programs that are reading out with data in 2022, what are you most excited about here?

So I'm excited about the cancer programs. I have to be because we work in cancer with other companies because people are still dying every day of the week around the planet of cancer. And the biology, I think, is very intriguing as a [ autosomal ] combination to checkpoints. We know that checkpoints are wanted for medicines, but they don't always work. So we believe that either intra-tumoral or with a vaccine, maybe even one day with the 3 things together, who knows. We should be able to make a dent to increase complete response, which would be wonderful versus monotherapy. That excite me. The other one, of course, is rare genetic disease. There's a lot of disease for which those families, those children have had no hope since the birth of those children. Because MMA, PA have no drugs approved. Some of them have never had a drug going to even clinical study. And so the biology risk, as we know on those drugs, is very low because we are started by single-gene deficiency, so we believe the biology and has been proven. In animal, it already works. And unlike oncology, where the biology tells you nothing in animal to human, it's a checker box exercise in rare genetic disease. As we know for many, many companies, it is a lot -- a high level of translation. The key question, of course, is the technology. Do we get enough mRNA in the right cells of the liver, hepatocyte versus Kupffer cell. And so if they're strong, you get enough under the right frequency, then bingo, the drug should work in terms of the clinical manifestation of the disease. We're going to, of course, look at biomarker like we should always do. But because the [ solitary nature ] of those disease, it is also going to be very important to look at the case by case, kid by kid, with the doctor, with the family, of the disease evolution because I could see a world where some biomarkers don't, say, move a lot. But if number of times the kid is hospitalized, the quality of their life, their ability to learn, the decompensation they might have changes drastically, that will be something really exciting for those families and for us. So I'm very excited and eager to see that data.

Well, thank you so much, Stephane. Really appreciate it.

Thank you so much. It's good to see you, Salveen.

Take care. Happy new year, again.

Happy new year.