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

All right. Great. Thanks for joining us, everybody. I'm Terence Flynn, Morgan Stanley's large-cap U.S. biopharma analyst. I'm very pleased to be hosting Moderna. We have Stéphane Bancel, who's the company's CEO. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Stephane, thank you so much for joining us. Really appreciate the time today.

Thank you for having us.

Absolutely. Maybe you could just start. Obviously, we were talking a little bit before about some of the cross currents on the policy side. It's been a pretty active period for the industry, both on drug development, but also policy and some of the uncertainties. So just as you think about strategic prioritization, making investments in these long-dated pipeline cycles, how are you navigating this period?

Sure. So I would say, if you look at the FDA, we're actually quite pleased how our team have been working with the FDA over the last 6, 9 months since the new administration and the new commissioner, and we're very thankful for the FDA. We've got 3 products approved in the last 3 months, actually 3 mRNA vaccines. And if you just would read the headline and the [ tweets ], you will think this will not happen. I know a lot of people thought back in January, February that this will not happen. But again, we had very strong files, with very strong clinical data. We had good relationship with the working teams at FDA to review those data and those 3 approvals happened. And they were in mRNA vaccines, and you would think -- and 2 of them were mRNA COVID-19 vaccines. So I think very good relation with the agency. Now what happened with the lack of ACIP recommendation as of today is in some states, there's no issue for pharmacists to deliver the products. But in some states, by state regulation, the pharmacists can only deliver a product if it's ACIP recommended. That's what you have seen happening since the new strain of the COVID shots were approved 2 weeks ago now. What you're starting to see happening is the states rewriting legislation so that the state basically is decoupling from ACIP. And we saw it last week in Pennsylvania. We saw it also last week in Massachusetts. California is currently passing new legislation to do the same thing. So I think the 16 states that has hardwire ACIP recommendation to allow pharmacies to deliver a vaccine without a script from a clinician are basically disappearing because they're being decoupled from those states. So again, we'll see what the seasons look like. We have strong demand from the retail channel, which, as you know, we have direct contracts with the retailers. There's no PBM for vaccines. So we'll know more in a few weeks, but the start of the season is very good.

How long will that decoupling process take? Because it sounds like it kind of varies by state. But if you look ahead, like is this a week's thing that's going to happen? Or is it like months?

We're talking weeks. We're talking weeks. So again, some have already made it happen and the other ones are weeks. I think everybody is trying to make sure that by mid end of September, when really you start to get into thinking about flu shots and COVID shots and so on, that this is not a limitation for people just walking into our pharmacies. In those states, if you e-mail your doctor and you get a script to your pharmacy, you can still go there. But of course, you have leakage there. Some people don't want to do it, they forget or whatever. So the states have a very high incentive to make sure it's easy as it was last year.

And that's going to be true that decoupling is not just for the COVID vaccine, but its going to be for any vaccine across the board. So any recommendation, there will be a decoupling?

Correct.

Okay. All right. And then, I guess, as you think about this environment, I mean, this new kind of steady state, it feels like you're confident that you can navigate this and deliver on your kind of strategic objectives despite some of the policy dynamics.

Sure. Because if you look at what we are trying to do before is to finish the respiratory portfolio and then to create basically a cash cow of that business because if you think about it, we have 2 COVID shots approved. Think about it as a high dose like flu and low dose. RSV, we have now positive Phase III on flu and positive Phase III on flu plus COVID combo. So at a different time with different policy environment, we might have wanted to do RSV, COVID flu combo, which we have shown data in preclinical. But we're not going to invest the capital for it. We don't think it warrants it now. Maybe later, we can restart it. And so really, those investments in respiratory disease are mostly behind us. We have a little bit of a tail in R&D because as you do vaccine, sometimes you have multiyear safety commitment post launch. But if you think about it, basically, we have a business that this year, we said is $1.5 billion to $2.2 billion of sales. You're launching the high-dose product. We think this should allow us to take market share because the retailer will make more profit because of a higher price. And then we have flu, which is a market 3x the size of COVID. So it's a market where we're not participating now. And then the flu/COVID combo is going to be helpful across the world. But I would say, especially outside the U.S., if you think about it, when you are one payer system like the NHS in the U.K. or in France or in Germany, you want people to get the best coverage they can so that you don't pay hospitalization. And so you can force what you cannot do in the U.S., but in those countries, you can force the consumer that this is the product they're getting. And so the flu COVID combo is going to be quite interesting to drive compliance on COVID and to drive volume for us. So think about the respiratory business, you're going to have very nice growth in the coming years. You're going to have improvement in gross margin because given we have a platform, we do not have to invest CapEx to launch new products. And so you're going to have improvement in gross margin, R&D coming down, as we spoke about, and SG&A being flat. And you could tell me, Stephane, how can you have SG&A flat when you launch a new product? Well, because it's a B2B setup. We're not selling detailing to doctors, the flu vaccine or the combo vaccine. We're directly negotiating with CVS and Walgreens and Walmart and all the big retailers have a pharmacy or grocery chains that do pharmacy. So we can handle those products without adding salespeople. And actually, we get actually more leverage because we can do portfolio negotiation, which we couldn't do last year where we had only 1273. So if you look at the next 2 to 3 years and you think about what we're trying to do strategically is like finish respiratory franchise, we will end up being the company that has the most product in respiratory of any company selling to that channel, create cash flow from that business, invest it in oncology. And so of course, oncology people are highly aware of the INT program that we're doing with our colleagues at Merck, which we should have a 5-year data of a Phase II coming either late this year or in January, but also the Phase III melanoma coming next year in '26. And we have 7 studies that are currently ongoing. And you can see us doing with Merck what Merck has done with KEYTRUDA before, which is when you get a good signal, just expand the number of tumor types and keep learning and keep expanding the use you can have of the product for patients. But if you look behind that product, we have up to 10 additional products that are really exciting that we own 100% of the economics with this mRNA-4359, which we're going to be presenting new data at ESMO in Germany in mid-October, where we've said that we accelerated the Phase II recruitment in lung and in melanoma because what we saw is patients that were in Stage IV cancer that were refractory to checkpoints. So they have failed KEYTRUDA and some of them have failed KEYTRUDA and Opdivo. And then you give them mRNA-4359 with KEYTRUDA and you see a response. For people having stage IV cancer metastatic. So we are enrolling the Phase II in lung and in melanoma because it's metastatic, you could see data potentially in '26 because unlike when you go early in disease, those, unfortunately, you see data quickly. And that could be a first-line metastatic setting for lung and melanoma to start with. And that asset we own. And same that asset because we made in the platform, you don't need to add $1 of CapEx to launch this product. So I think what we're going to start to see in the next few years is really now that we've resized manufacturing post COVID because we have to build 2 billion doses and then go back to more of a normal volume. But I think you're going to see is nice gross margin expansion across the portfolio, more products coming and Moderna using most of its capital investing into oncology and rare disease.

Okay. Great. I know one of the other strategic priorities is cash flow breakeven by 2028. And so given everything you've just walked through, given some of the policy cross currents, you're still confident in achieving that goal?

Yes. And I think there's a few things. First is we control the cost. So if you look at the work we have done with the team on cost, the cash cost of the company in 2023 were almost $9 billion, $8.9 billion in 2023. Last year, we were at $6.3 billion cash cost. So really, a lot of work happened to take this down. We entered the year guiding $5.5 billion of cash cost for the year. On the Q2 earnings call early August, we said because we are way ahead of plan, we should be at $5.1 billion of cash cost this year. So $6.3 billion last year, $5.1 billion this year, and I'm going to work really hard. This is not guidance, but I'm going to work really hard to beat that $5.1 billion. And the team is doing a great job. And then we've said that we should be around $4.7 billion next year and $4.2 billion in '27. So that's for what we can control. We always said, look, if the sales are not there, we will reduce costs further. Remember, I was there when the company had 10 people or actually 2 people and not spending even $20 million a year. So we will titrate the R&D investments. We will partner. As you know, we have partnered over the years with pharma companies like Merck and Vertex and AstraZeneca. Last year, we partnered with Blackstone, and they actually funded 100% of the Phase III study for flu. And so we'll be very happy to do things like that. We've said publicly that we are looking for partners for latent virus products like EBV. Of course, if CMV is positive, most probably we will partner this product. I don't think it will make sense for us to build a new sales force just for CMV. But for a lot of companies that are doing women's health and also pediatric setting, that will be a great product to add to the bag of our sales rep. And there's no CMV product approved, no vaccine approved. So that will be quite interesting. And so that's a bit of what we're trying to do, which is really work on growing the top line again. And I think another piece that people sometimes underappreciate is how outside the U.S. is going to be important for us. Because as you know, in U.K., Canada, Australia, we've signed multiyear, 7-year deals with those governments to supply vaccines. So we have volume commitment. And then every year, we just choose the split of products between COVID and flu and combo and RSV and so on. But if you do the math based on public information, it will be close to $1 billion of sales starting next year that will be recurring. So you're going to see growth next year outside the U.S. and then you're going to see stability and visibility for many years to come. As you know, in Europe, there was a contract that was done out of the legal framework of tenders in Europe during the height of the pandemic in the spring of 2021 between Pfizer and the President of Europe, Ursula von der Leyen. There never was a tender for that deal. So we are basically excluded from Europe last year, this year and again in '26. But at the end of '26, that contract expired. Already some countries like, for example, Poland sued Europe, won and we're able to exit that contract. And actually, we won tender in Poland. And as those countries start to use all their Pfizer volume commitment, they're starting to want a higher efficacy product because, as you know, many, many real-world evidence studies have shown that Spikevax has had efficacy in the elderly and high-risk people than COVID-19. And now we've also show that mNEXSPIKE in Phase III study has higher study head-to-head to Spikevax. So you can start to see the market differentiating the product. And so if you are in Holland, if you are in the Nordics and you already have used a lot of Pfizer doses, you can start using Moderna doses for your high-risk population, keeping the Pfizer doses for the low-risk population. That's what we're seeing more and more. So you're going to see a bit of progress in '25, much more in '26 and then full market access in Europe in '27. So between Canada, U.K., Australia helping us a lot in terms of growth, potentially up to $0.5 billion of growth next year. And then the reopening of Europe, you're going to start to see the respiratory business. And then you have flu. I'm excited about flu mono before even flu combo with COVID because flu is 3x bigger than COVID as a market in the U.S. And we've seen the payers willing to pay a higher price for high efficacy product. We've seen with Fluzone HD that retail around 3x higher price than the standard flu product that is given for a healthy population. So if you look at all those factors, I think we have quite a number of drivers for growth, then we manage the cost. So last year, we lost $4 billion. This year, we lost $3 billion of cash, next year $2 billion; '27, $1 billion and then '28 breakeven.

What -- maybe just before we go on to some other topics about market share, I mean, I think you guys right now are kind of 40% versus Pfizer, BioNTech is like 60% in the U.S. and again, ex U.S. is probably a little bit less. But where do you think that ultimately shakes out, given what you were just walking through. I mean, does this become a 50-50 market? Or do you think you can deliver above 50%?

So it's a great question. Our goal is going to try to be able to deliver above 50% because as you say, from a portfolio standpoint, we have a few things, and it's going to take several years. I'm not talking about just next year. First is the mNEXSPIKE product with a premium pricing should allow us to gain share, right? Because the channel is going to make more profit versus selling the Spikevax or selling the COVID-19. And as we get more and more products in the portfolio, we can start to bundle. Last year, we know we lost share to Pfizer in the pharmacy sector because they give discount on Prevnar. We couldn't give discount on the Prevnar like product. We don't have it in the bag. But as you start to have more products and as you start to have products that are unique that your competition doesn't have, like a flu COVID combo, Pfizer won't have that product because we are back to square one in the clinic. Then norovirus is another product that will be sold in the pharmacy that we are not aware of anybody else being in the Phase III with norovirus. And so if you think again about what the portfolio is in '26 and then in '27, it's going to be one of the most important portfolio for the retailers in terms of their own EBIT growth. And so as we map this out from a customer point of view, we think it's going to be quite interesting for us to be able to drive sales and to drive share.

Okay. And then just maybe coming back to COVID for a second. As we think about the timing here of this unbundling that's happening you still think this current season, if we look at like total vaccinations, it's still going to be roughly similar to what we saw last year, just on a high-level basis in the U.S.

That's what we think, again, as you know, we still have a wide range to the year because there's some unknown that will allow us to still be in the range, but on the low side of the range. Indeed, if you look at what happened in the spring, especially in what we call the hard core vaccine use, people that get their shot and follow the recommendations and so on, it was actually flat in the spring of 2025. And it's quite interesting because there was no government support for vaccination. If you look at previous years, for the seasonal COVID booster in the spring, there was always advertising done by the CDC on local radio for elderly, on local TV program for elderly. This year, everything was cut. And so despite that, we saw the same volume as you saw last year in '24, which is a good indicator. We look at the claim data. And you really have this group of people in the U.S. that no other high risk, either because of age or because they have a risk factor or because they have a loved one, like a spouse or a parent in the same household that has a risk factor. And those people, we call them internally the hardcore vaccines. If you look at the claim data, they are compliant to everything. They get their shingles shot, they get their Prevnar shot, they get their fall and then the spring COVID shot, they get their flu shot, they get the RSV shot, they follow everything. And so we really believe that those people is where the market has come down too and they are going to provide a strong base of foundation. So as we start adding mNEXSPIKE, with a higher price, start adding flu and then flu plus COVID combo and then noro, you're going to see how we're going to create the growth based on that base.

Yes. Okay. One you didn't mention as much as just RSV. And I'm guessing that's partly because there still has some uncertainty about how kind of revaccination plays out. So maybe just level set us in terms of where that fits in terms of the portfolio strategy, and then we'll come back to the flu side.

Sure. So RSV, I think there's 2 things as you articulated, there's the market and then the channel with a lot of products in it right now. So let's start with the market. As you know, the first season RSV was approved. It was a great season, surprised everybody to the upside, I think mostly because of pricing more than volume. And then what happened the year after is ACIP did not recommend a booster for RSV. And that's why I think everybody got a cold shower, including the manufacturers and the channel. Because what happened basically is on the first year, you got those same hardcore vaccine I just spoke about. But they're like, okay, there's a new vaccine, it's recommended, I'm going to get it. But those people did not come back the following winter. And then if you look at the sale of distribution of vaccines, you have much less people in that second cohort that don't follow all the recommendations. And so you have a volume massively down. And then you have the channel totally stuff of product because the channels, the manufacturers were expecting a strong year as well, plus there was a lot of discount given after our approval because there's a 1-month window between our approval and our ACIP recommendation. So it was a kind of a good way for the competition to go kind of get more product into the channel. So you went into that season with a lot of products in the channel and no boosting. So very small demand. There's still a lot of product in the channel. So I think until we get clarification from health care experts in terms of when you vaccinate, is it every 3 years, every 4 years? What is good is that people have got this first class of vaccines are being followed in terms of hospitalization rate. And I think that as we start to see the vaccination -- the hospitalization rate going up, the boosting recommendation will come up. So is it every 3, every 4 years, we don't know yet, but that most probably what's going to look like. And by the way, it's not so surprising, if you look at the epidemiology, people 65 and above get sick again from RSV every 2, 3, 4 years. So that's kind of in that ballpark.

Okay. So you think it's going to come down to really like hard data on hospitalization rate and then that will ultimately drive a recommendation or something?

Recommendation and something. And the payers will go behind it just because of hospitalization costs.

Okay. Okay. Understood. All right. Maybe just going back to the pipeline and the flu program. I mean here, do you feel confident in terms of the regulatory outlook on the flu side?

So we feel good about it because, again, the data -- I mean, you saw the top line, we're presenting at medical conferencing and publishing the data. The data is as clean as you can get in terms of safety and so on. There's a precedent of 2 products for high efficacy, high dose for the people at high risk, again, elderly and younger adults at high risk. So we think there's a playbook that has happened before us. So we will -- we are preparing the filing for the FDA. We'll submit the file to the FDA and to agencies around the world. And then we will refile in the U.S. the combo. The good news in Europe, as we've said, is that we are not asked to withdraw the file of the combo. We will file the Phase III flu data as an amendment. So we might get another 3 months clock stop, but not a full restart of review. So there's a world in which the combo is approved in Europe before the U.S. And as I said, in a lot of countries outside the U.S., there's a strong appetite for the combo in order to increase the COVID compliance by just putting it in a product and having people because they are under one national system to get it.

And then maybe just remind us, so you're going to file in the U.S. by the end of this year, that's still the guidance?

We have not given precise guidance. We are working as hard as we can. I mean those are the 2 products we have to file the flu and the combo. Thankfully, the combo, we already had filed. So we have everything but the flu data, and we're going to have flu data that are going to go in a flu file. So we're just going to copy and paste it. So I think the flu COVID combo is not a lot of work for us. It's really getting the flu file because as you know, those -- you have to go back and those are not 100 people studies. Those are 10,000 people, 30,000 people studies. So you have a lot of work to do with medical and safety team just to clean up the files to make sure we have good data that we can send it to the regulator.

Okay. So that's in the U.S., the path is to get the flu filing in and then get an FDA decision and then you go forward with flu...

COVID combo.

Ex U.S., it's more of a parallel path, it sounds like?

Correct. In a lot of countries, they let us keep going with the combos, will be parallel paths. In some countries, it is like the U.S. versus with drug because they look up to the U.S., and we're going to refile behind. So we're going to have those 2 situations outside the U.S.

And how -- maybe talk a little bit about post-marketing commitments and how that plays into the investment required here for vaccines? Because it seems like that's another area where there's some uncertainty. I know with COVID, maybe you have more visibility on what that post-marketing commitment looks like. But should we expect something similar with the flu program, for example, and how you're thinking about this postmarketing report?

So it is possible with flu that we'll have the same requirements. We don't know yet because we have not filed the fact, obviously. For COVID, we don't have a full sense for the cost because discussions are still ongoing with the agency, and we're very active discussions because, of course, we want to make those study happen. So once we have a final plan approved by the agency, we'll communicate the cost impact. But that's a bit what we have today.

Okay. Maybe we'll pivot over to oncology now. I know you mentioned this is another area where you're scaling on the respiratory vaccines, but then you're taking some of that cash flow, investing in the cancer side. There's a lot of focus on the INT program that you mentioned you have partnered with Merck here. Maybe just remind us about, I think the next major readout we're expecting is the Phase III adjuvant melanoma study. Maybe just remind us about the confidence in that study, what gives you guys the confidence there? And then any thoughts on timing of the data study?

So let's start on the easy part. On the timing of the data, there's nothing new since our last Q call, which is 2026. because as you know, those are case based. But again, our statistician, we run the numbers regularly because, of course, case are accruing all the time, given it's a big study. And they confirm before the Q when we confirm '26, they confirm '26. As we get closer and we have more cases, of course, we will reduce that window. So what gives us confidence, I think, is 2 things. First is the Phase II data. As you know, I know everybody is not as familiar as you are on the Phase II data. This was a randomized study, a group of around 1/3 of patients got KEYTRUDA monotherapy and another group, 2/3 of patients get KEYTRUDA plus INT. If you look at the data and the survival, if you look at the distance metastasis, which, of course, is always a leading indicator in cancer, you had 2 out of 3 people in that study, there was 150 people, 100 people, let's say, on active INT. You had 2 out of 3 people that 4 years out had no death or distance metastasis. And as we know, what kills people is rarely the primary tumors. So if you look at that data and if you look at the mechanism of action, which we have shown at ASCO several years in a row, which is we have shown that we're able to take blood from patients on INT before we start INT. We know from sequencing the tumor and sequencing the healthy cells where they have mutations and which mutation we cause in the 34 mutations going into our product. We know those. So what we do, we do take the blood of cancer patients before we start dosing INT. We basically test their T cell for the epitope. We know are coded in our product. They don't respond. And we've shown that if you take the blood of those patients, 3 to 4 those after having done 3 to 4 cycles of INT, you have T cell response against those epitopes. So I mean, at least to my knowledge, there's no better proof that you have basically reprogrammed T cells of patients to be able to recognize the epitope that we want to put in the product. Based on that mechanism and the clinical data that we have so far of the Phase II, that gives us the confidence. I think, again, Merck has a lot of experience in oncology. If you think about what they are agreeing to do with us, which is now I think we have 7 studies, Phase II or Phase III that are ongoing across a lot of tumor type of KEYTRUDA plus INT. I think it's a good proof that some people could argue and say, okay, what does Moderna really know about oncology because you guys are an infectious disease company. Well, of course, as you know, we have a lot of oncologists that we hired from BMS and Merck and great companies in oncology. But Merck is being part of all of those decisions. Merck pays 50-50 of any study. So it's a huge amount of capital for Merck. Some studies they even run themselves, like the Phase III melanoma is 100% run by Merck. We run the Phase I/II before. And so I think given what Merck has delivered with KEYTRUDA and what they have seen of the data and the patient data that they have seen in all the studies, I think the best -- it for me is the best confidence that they believe like we do, that the signal is real, which is where we've been investing so massively. We also invested together 50-50 in the manufacturing facility because while we spoke about the margin improvement for the rest of the portfolio 5 minutes ago, as we launch more products and as we grow volume, we're going to see very nice gross margin expansion. INC because it's individualized, it's a different manufacturing process where here we are shrinking everything. And so that plant is built. It's in Massachusetts, so it's in the U.S. So we have no tariff issue or risk. It's in the U.S. and we've already done PPQs. And so that plant will not be critical path to launch because as you know, we're getting that plant ready for potential accelerated approval. And so really the only thing we're waiting to file the BLA is the Phase III data. And so that's good news that manufacturing won't be critical path.

Okay. I know this is in the adjuvant setting. And when we talk to KOLs, they have enthusiasm for the adjuvant setting, but there's more debate on, say, the metastatic setting. But you guys made a decision to advance into metastatic. And so maybe just talk to us about that dynamic and why that decision now to go into metastatic as well because I think, again, from a first principles perspective, it seems like there's a lot of data to suggest why this could work in adjuvant, but metastatic, it's, I think, more of a debate?

Yes. So look, in cancer, every time you try something new, people are skeptic. And as we know, a lot of things don't work and cancer is complicated. So I'll start there that we have to do the clinical experiment to know. The reason Merck and us think it's an experiment worth running is, again, we have proof of mechanism on the technology. We have a lot of data, including mRNA-4359 in a metastatic setting using the same core technology of mRNA with the same manufacturing process showing some interesting responses. And so -- and then we have data that we have seen across a lot of different studies, including the early studies, monotherapy in combo, including in lung, head and neck. So there's just a lot of data that we're spending a lot of time to look at, again, on the patient-by-patient case. And we think it's an experiment we should really run. And so we are running it. And again, the fact that Merck is willing to pick half a bill, I think it is a good sign that they think there's merit in doing that experiment.

And is that ultimately going to move -- this is melanoma is it ultimately going to move to other metastatic tumor types? Or is this kind of a POC and you see where it is...

So I think it's a bit like what we've done for everything, which is starting melanoma, like has been done for checkpoints, starting melanoma. And when you work on it it's always work only melanoma, so start another tumor. So we're just expanding the chess board by going into many tumors going later with metastatic. And then I think we talked about that I want to see happen and when something has been decided, we'll communicate, of course, I want to go monotherapy early. Because if you think about, for example, lung is a good example. There's a lot of people who get diagnosed through an x-ray of Stage I lung cancer. But most of those people do not get a checkpoint because the side effect of a checkpoint is so profound. It's literally life altering. So of course, if you're in a metastatic setting or if you're going to die, better to have an autoimmune disease from your checkpoint than dying, obviously. But if you are a Stage , could you get an INT monotherapy? We know we can report on T cell. We've shown it to people that are much more advanced disease. So we believe that people that are early in disease should have a stronger immune system. And so what does it look like if you could deliver to a stage 1 cancer lung patient, a therapy that you could take that has a side effect profile of a vaccine. Not like chemotherapy, not like immunotherapy, but like a vaccine, where literally, you might be tired for a day or have slight fever for 24 hours and then be fine. That's the side effect for cancer. That will be pretty phenomenal for patients. And so that's an experiment I think we need to go around. Nothing has been announced yet, but that's something that, again, you keep expanding and learning. So you don't stop there, but that's a logical place to go.

And then just in lung, I mean, that's another question when you talk to the KOLs, we'll say, well, everything works in melanoma, but when you go to cold tumor type, it's harder to know. So how should we think about translatability in the event of positive Phase III adjuvant melanoma data, how much translatability is there to non-small cell lung cancer?

So we think it's a pretty good odds. Again, I don't want to get ahead of myself because we have not run the Phase III study. But if you go back again to data we showed at ASCO in 2018, we showed monotherapy people in lung cancer responded to INT monotherapy before we combine with KEYTRUDA and some INT-KEYTRUDA responded in lung setting like in head and neck and other tumor because we did a typical Phase I basket study with all comers. And so people just have to do the work and go back to the data. So again, of course, we do that for a living. We know the data pretty well. But the data are out there. So does it mean it's going to work with 2 out of 3 patients doing better than KEYTRUDA like in distant metastasis for melanoma, I don't know. Nobody is in the world, I think, know because it's oncology, and we have to run the clinical experiment. But do we think it's an experiment worth running because if it's materially better, you have a product and you already have a manufacturing infrastructure and it's lung, which is a big indication that has a huge number of patients in the U.S., but also around the world. So we think, yes, it's worth running. And that's why Merck and us decided that it's worth investing the capital.

Okay. Maybe just in the last minute, the other one we're expecting some data on is the norovirus vaccine later this year. Maybe just help us think about the market opportunity because I think there's a lot of debate among investors in terms of, is this a very niche market or is this a much larger opportunity? And so how do you see that market opportunity?

Sure. So it's interesting how people react to things. I think anybody who got noro before doesn't want noro again, right? And I think I know somebody who got noro once in my life before. So if it's a pharmacy product where you don't need the script, that makes the bar much lower in terms of adoption. And then if you start to do market research, which, of course, we have done before investing the capital, as you would expect us to do, you have not only demand in the elderly and again, adults at a high risk, again, going back to the respiratory similar setting. So you have that population. But then on top of that, you have health care professional, because, again, do market research with doctors and nurses. They don't like to get noro regularly from their patients, which they do. If you start asking educators, do kindergarten and kindergarten first grade, second grade, like literally lower school. I go ask the teachers how much they like noro and they don't. And so -- and as young parents who had noro from one of the kids, how much they like noro, they don't really. So if you start to add those numbers, you start to get to very significant numbers. And again, if you think about the way we think about this in really a multiyear study, we're not doing this to manage next quarter EPS. This is a onetime R&D investment. I have 0 CapEx to invest. I have 0 sales and marketing to invest into the same sales force. And I get more leverage with my customers because I get a portfolio with unique products. So think that might be 2, 3 years from now, if I have flu plus COVID alone or maybe down the road with Novavax, Sanofi, we'll see. And if I've got noro, so how much do I need to justify a good return on investment? It's not a crazy high number of dollars because, again, I don't have to invest CapEx. And I make my cost of goods for all our products better by absorbing on my fixed cost. So we think it's a really good investment of our capital.

Great. Well, I think we're up on time, Stephane. But thank you so much. I Have the pleasure.

Thank you. Thank you so much.