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

All right. Okay. Good afternoon, everyone. Tyler Van Buren here, senior biotech analyst at TD Cowen. Thank you very much for joining TD Cowen's 46th Annual Healthcare Conference. For this next session, it's a privilege to be hosting a fireside chat with Moderna management. And from Moderna, it's my pleasure to introduce Jamey Mock, Chief Financial Officer of Moderna. Jamey, so great to have you. Thank you for joining me.

Thanks for having us, Tyler.

So we'll start at a high level before we get into some of the more detailed programs or specific programs. But for the full year 2025 product revenue came in at the high end of the guidance, which I think surprised some given the COVID normalization concerns and macro factors throughout the year and volatility on that front. But maybe you could just talk about what drove the resilience of the COVID franchise and the great result you guys ended the year with?

Sure. Well, thanks, everybody, for your interest in Moderna. So yes, I would say, obviously, a lot of things going on from a macro perspective. That said, I think the team executed extremely well, number one. And I also think it tells you that there's still plenty of people that want to get vaccinated. So in the U.S., for example, there are over 30 million Americans that got vaccinated against COVID last year. But if I break down and kind of go through the numbers, we had guided $1.6 billion to $2 billion of revenue, and we came in at $1.9 billion. And if you double-click on that, we had said the U.S. would be about $1 billion to $1.3 billion. And 2 things happened there. Vaccination rates were on the better end of what we thought they would be. And then mNEXSPIKE, which is our latest COVID vaccine, performed very well. So we did well from a share perspective, particularly in retail. And then outside the United States, there wasn't a lot of volatility left. We just had to execute. There was a little bit around vaccinations, but we hit the high end of that guide. So we had guided $600 million to $700 million. So we had $700 million outside the United States and $1.2 billion inside the United States. And we're really pleased with the execution. So that's a little bit about how we hit the high end.

Great. And mNEXSPIKE, which you mentioned, 24% of the U.S. retail channel, impressive early uptake for that product. Is that the penetration that we should expect moving forward? Or ultimately, what share of your franchise -- COVID franchise do you expect mNEXSPIKE to take?

Yes. We were -- thank you for saying that. We were really encouraged by what we saw. So I think the product was approved in mid-June. So for 6 months of the year, having a product that was just approved going into the season, we thought have performed extremely well. And I think it really just comes down to the product profile. It has superior efficacy versus Spikevax, particularly in older adults, which is really who we're targeting. It's high risk and older adults. I think that's where the large majority of vaccinations are targeting. It's 13.5% better from an efficacy perspective versus Spikevax. And so that got in the marketplace and performed extremely well. So looking forward, that is one of the growth drivers we're hoping for, in 2026 as well and beyond, and that we do hope that it takes up a larger share of our -- of the market overall and of our proportion of the market as well.

So for '26, another recent surprise was the up to 10% growth guidance. I guess that means anywhere from 1% to 10% over the course of the year. So how should we think about the potential outcomes within that range, swing factors? What gives you confidence that you can potentially hit that up 10%?

Yes. I guess it's 0.1% up to 10%...

Decimals.

But I think the other important thing that we've said about that, and I'll come back to that, but I think it's telling when we break down and as I talk about what is going to drive growth is we also said that the geographic distribution was roughly 50-50 inside the United States and outside the United States. So I'll speak to each geography and talk about the upside to your point or the range of outcomes. In the United States, I just mentioned in 2025, we had $1.2 billion in sales. So if you take a 50% midpoint of our guidance, that's about $2 billion. So that would imply $1 billion in the United States and $1 billion outside the United States at the midpoint of up to 10%. So that means that we are expecting or planning for -- not expecting, we're planning for the United States that could potentially drop from $1.2 billion to roughly $1 billion. That's based on vaccination rates or -- and/or market share or competitive forces, whatever it might be, but that is our planning assumption in this guidance. Now what could be the upside to that? mNEXSPIKE could continue to perform well and take a larger share or vaccination rates might not be done as much. So if it's another $1.2 billion overall, that would be on the higher end. If it's down to the $1 billion, that would be towards the midpoint or lower end. And then outside the United States, I said we had $700 million of revenue in 2025. And again, that's going to go to $1 billion. And that's really based upon we've been talking about these large partnerships we have, primarily in 3 geographies in the United Kingdom, in Canada and in Australia. And those we started to execute against in 2025, particularly in Canada, but many of them, particularly, in the U.K. and Australia, we had very nominal revenue. So as those annualize and they can continue to grow over time and we can get into that, we're getting a big uptick. So that is why international revenue mix growing. And you'll see it in the first half. We mentioned back in 2025 that some revenue that we thought might land in 2025 slipped out to the first half of 2026 for about $200 million. So we expect that you'll start seeing the fruits of that in the first half of this year.

Great. And Moderna has stated that its path to cash flow breakeven in 2028 is dependent on flu outcomes where we've seen some volatility lately and cost discipline. And you have levers to adjust across '27, '28. So can you outline what sits under your control bucket versus what's external?

Yes. Well, maybe I'll start with cost because that is in our control. And we had guided, if I just look at 2027, we haven't guided 2028. We guided 2027 to a midpoint of $3.7 billion. So that means by 2020, we either have to be at $3.7 billion from a revenue perspective, which I'll talk about in a second, or we're going to have to take down cost a little bit or have a mixture of both growth and cost. And this breakeven story is both a growth and a cost reduction story. So just to kind of talk a little bit more about cost because I think the bigger story is really the revenue side. Costs, we have great line of sight to this $3.7 billion. There are some trials ongoing in the year 2026, specifically in our infectious disease with norovirus as that completes and some other things going on with COVID. Those will roll off, and we have terrific visibility to the $3.7 billion. After that, it's really a bunch of capital investment choices that we've made and have made over the last 3 years. So we've always had the high-level strategy of investing behind the business, but monitoring the revenue line and '26, '27 and '28 are no different than that. So costs very much in our control. I think the bigger story is, and we try to lay this out at Analyst Day, is we have 10 shots on goal of what we call growth drivers that we -- that are all several hundred million dollars. And there's no revenue item that is perfectly under our control. Even the solidified contracts with the 3 geographies I just talked about, it's not -- I mean, we have obviously greater control, and it's more on our execution. But at the end of the day, it's still 2 parties for any kind of revenue. So we've got that. We've got -- and it's really a mix of international expansion as well as new products. So international expansion, we've got the contracts I've mentioned. We've announced additional partnerships in Mexico and Taiwan recently. Europe will open up in 2027, and that's a rather sizable market, not just for COVID, but for all infectious disease. So we plan to grow there. And then on the new product side, we'll talk about flu, I'm sure. We've got flu and plus COVID from a combination perspective, both inside the United States and outside the United States. We've got norovirus. And so that's kind of the, I'll call it, infectious disease or vaccines portfolio. And on top of that, I'm sure we'll get into it, but hopefully, our INT product reads out well and is approved, PA reads out well, 4359. So we have a lot of shots on goal. But getting back to answer your question, cost is in our control. We have a good line of sight to it to bring it down to at least $3.7 billion. And revenue, we've got a lot of shots on goal to get that up to some level like that.

Great. And maybe related to the cash flow breakeven plan and thematically, you all have been clear about reallocating capital towards area with better risk-adjusted returns. So before we get into respiratory franchise and vaccines, just talking about potentially oncology, autoimmune, rare disease and, of course, partnered vaccine. So can you elaborate on these recent comments? And also if that means that you might explore other modalities outside of mRNA as well?

Yes. I don't read into those comments as much. Let me just step back for a second. Over the last 5 or 6 years, we've probably invested 80% of our research and development into infectious disease. And we've been very conscious about doing that, and we knew we wanted the full portfolio. When we have the full portfolio, we think that brings a lot of value to our customers and what is the full portfolio? That is 2 COVID vaccine, that is RSV, that is flu, hopefully, that is flu plus COVID and that is norovirus, which can also sell through the retail channel. So those investments will largely be done. And that's not to say that there can't be more, and we will continue to invest in more. But after investing all that capital, we've got to make that business a profitable, growing, sustainable business. And that's really been the strategy. And I think you'll see that over the next coming years as each of those products grow and as I talk through the international expansion as well. But that said, we've always been trying to diversify into oncology. We've always said mRNA is not going to be a one therapeutic area company. It's going to be many different modalities and therapeutic areas. So we're excited about what we have in oncology, INT, which we'll talk about, I'm sure, which we think can break through on cancer vaccines broadly should INT do well. It's kind of the bellwether for cancer vaccines, and we have numerous ones behind them. And then we've got other mobilities in vivo CAR T therapy, T cell engagers. And then there's rare disease as well and an entire pipeline in our research and preclinical behind that as well. So I think it's just the time that we are kind of completing some very heavy investments. We have to make that business grow and be profitable. And it's the time to diversify the company as well.

And my final general questions is actually going to be on AI. I think this is the first time I ever asked about AI at our conference. But I can't include a line item in my model in AI yet. But can you just talk a little bit about that, what we might be underappreciating and when might the fruits of that labor become more obvious?

Yes. It's a great question. It is a total game changer. And we are obviously in inning 1, and we believe that we are very far ahead at Moderna, across all areas, which I'll get into. But there is so much productivity, not just from a cost perspective, but from a speed-to-market perspective, from a working capital perspective in terms of materials management, from a scheduling perspective for patients, which really affects our INT business. There is an enormous amount of returns, and we've been very broad across all functions, very methodical about it. I had -- I just walked out of a 2-hour review with our entire digital team walking through exactly what we've got going on. And AI is one thing that it has to be backed by a terrific set of software and data, and we have that. So there's back office productivity. There's front office productivity. There's -- we've got -- and I think we've actually started to realize some of those benefits in 2025. So if you remember, we entered 2025 believing we would be $5.5 billion of cash cost and ended at $4.3 billion. Not all of that is AI and probably a small portion of it, but it's still yielding benefits. It is difficult to model. I can totally understand that. But I think you can see -- you will see the productivity through what is our operating cost and what are those metrics? What does it look like from a margin perspective? What is our working capital? Our working capital last year ended at $150 million. So it's very capital efficient. And you'll see that over time as we grow that the cost of the infrastructure of our company does not have to grow nearly as much and which is why we're still confident in our overall breakeven and our ability to impact costs in the coming years.

That's great. So we'll get to the specific programs, starting with mRNA-1010 and flu, an unusual regulatory sequence with the RTF and then the BLA acceptance a few days later to say the least. So maybe you could walk us through that briefly and also touch on the post-marketing confirmatory study in adults 65 plus and how you plan to fund that?

Yes, it was -- what happened was certainly unexpected to be specific about it, the refusal to review our application was related to the control arm and whether it was at the right standard. And so that was surprising to us because we had years of dialogue with the FDA. So when we reflected on that, we said we've got to dig in and understand a little bit more, and we requested a Type A meeting. And through that Type A meeting, worked through it with and we came to a good spot. So what is that spot? That spot allows us to be fully approved from ages 50 to 64. And then 65-plus requires a -- will be accelerated approval, should this all be approved. And then we will -- what is required is a post-marketing commitment, which I'll talk about, which was one of your questions. But I mean, the PDUFA date we got is August 5 or 2, which is now 5 months away, which is terrific. That is probably faster than we originally anticipated, frankly. So we're excited about the opportunity. It is in the near future. We're working well the FDA on it. So that's what I'll say about that overall then. In terms of the post-marketing commitment, this is a pragmatic real-world evidence study that will take place over several years. So it is much more cost efficient than what one might think is a typical Phase II or even Phase III trial. So it doesn't affect our breakeven or our cost estimate at all. We always had some ability -- we always knew that we would need some real-world evidence over time and had already positioned and planned for this. So we're excited about what's coming.

And remind us briefly in the 50-plus age group, what percent of the flu market that is in terms of vaccines roughly? Is it similar to COVID?

I think COVID makes up a larger majority of 50-plus. So I think 150 million patients or people vaccinated in the United States. I think it's probably not the same split. I think it's more [indiscernible]. I think it's a little bit less than that. So COVID has, I think, 55% ,65% plus, 65%, 70%, 50% plus. It's not at that level. It's more split 50-50.

Got it.

But it's 5x the market.

Yes. And then for ex U.S. regulatory reviews, can you elaborate on that? Has it been -- has your experience been a little different there than the U.S.?

I'll just say that they've all been approved for a review in Europe and Canada and Australia.

Great. And the flu/COVID combo, just remind us the time lines there for ex U.S. how meaningful that is for the opportunity ex U.S. over the next few years? And then maybe you could touch on your U.S. plans for the flu/COVID combo.

Yes. So on Friday, actually, we announced that we received a positive CHMP opinion on our flu plus COVID combo, which is exciting. And so therefore, we believe that it could be approved in Europe in the coming months. So that's terrific and would be the first combination vaccine in that market as it pertains to infectious disease. And we've also filed -- if you think about the U.S., the U.S., we are still waiting now that we have a discussion on flu. We need to understand what is required on flu first. So I think that will take a few months and be further along into what the FDA is seeing. But I'll remind investors that none of this is planned as revenue in 2026, not any stand-alone flu revenue and not any combination revenue. So we really are not expecting this to be a 2026 revenue driver whatsoever. We think it's a substantial growth for both of them or a substantial growth driver, come 2027. And the combination, particularly in Europe, as Europe opens up, it happens to coincide with Europe opening up. And what do I mean by opening up? We've been basically locked out of Europe for the last few years because a competitor has a contract there, which ends by the start of 2027. So we'll be able to compete ideally with both a combination product, with a flu product and with a COVID product, RSV, obviously. So we're excited about what that means to 2027, particularly in Europe. We're excited for flu in the U.S. in 2027. It remains to be seen what it means for the combination vaccine, which we had planned really to be a 2028 revenue driver. So none of our plans have COVID in the U.S. or the combination in the U.S. in 2027 or 2026.

Understood. RSV quickly, any -- should we start to get a little bit more excited about that with a potential flu approval? Or do you think you need further maturation of your portfolio to -- in terms of contracting for RSV? should we keep expectations low?

Yes. We intentionally tried to keep expectations. There will be growth, but it is nominal growth. It's coming off a low base and any growth is helpful, but it is not to the tune of 10 growth drivers that I've been speaking about. And I think what's really required there is clarity around what is the revaccination schedule. So in the first year, I think there were 12 million Americans that got vaccinated. This is back 2023 and that's down to, I think, $2 million or less last year. And we were third to market. So therefore, you kind of need another revaccination period for it to warrant us kind of breaking in. And that comes at a time, ideally, in the next years here, where we will have a fulsome portfolio and think we will be able to compete very well. So -- but in 2026, we're not counting it as -- actually in the next few years, we're not counting it as a growth driver. But should there be a revaccination year that is in this time period, that would be upside to what we are planning for.

Great. And norovirus, you're now guiding the 2-season interim data in '26, which was earlier than prior expectations. Have you provided any granularity on that timing? And what would a successful interim readout look like with that program?

Yes. We're -- basically, we -- what we've said is that we are enrolling a second Northern Hemisphere cohort, and there will be a readout in 2026, and we haven't really adjusted the timing of all that much. So we're excited about it. I mean, just stepping back from norovirus, I think it's getting more and more press nowadays, actually. But it is a significant unmet need out there and does impact many lives, again, particularly older adults. And so what we're -- I think what most people -- most FDA or most agencies look for is at least a 50% vaccine efficacy. And based upon the data that we saw from our immunogenicity studies, both in Phase I and Phase II, we're encouraged, and we're a whole optimistic that it will be a terrific vaccine and read out well. And so then it actually enters a pretty large market. So the market for occupational health and health care workers and lifestyle travelers, we think it could be rather substantial. I think we put this one also as of 2028 revenue driver, just to be clear. So we're hopeful that it is a terrific interim readout this year. But right now we're planning on a 2028 launch. And that really does pair well. We believe it will go into the retail channel where many are sold and going back to this whole portfolio approach. That's why 2028 is such a difficult year to call from a revenue perspective. That's why we've only guided through 2027, but we know that we can get to 2028 with a lot of these growth drivers and the ability to take down cost. So we're excited about it.

Great. Transitioning to oncology with Intismeran, INT and several other programs now. Possible pivotal readout for adjuvant melanoma in '26. If this hits, could transform the entire company. You made a recent hire in terms of -- on the R&D front, Head of R&D, David, who has a tremendous background who I'm a big fan of. Can you -- so I guess the timing of this readout is it's very -- it's impossible -- it's event-based, right? So you can't give perfect granularity. But what do you think is the probability that it comes in '26 versus '27 and slips into '27? Can you give us anything on that front?

Yes. I mean, all I'll say is everything -- I'll just echo everything you said. I can't give a probability, but it's obviously enough that we said it could come in 2026. So therefore, we don't control that, obviously, because it is event driven. But obviously, the last thing -- maybe the other thing I'd say is just to remind investors, the adjuvant melanoma trial was fully enrolled in September of 2024. And what we're looking at the shape of the curves on the Phase II versus this Phase III, which was fully enrolled in September 2024. And if you look at that, if it performs similarly, then you should see some kind of readout in 2026. So I can't assign a probability to that. I would just say that we've obviously said that it could read out in 2026, which must mean that there is some additional confidence in that.

Yes. If it similarly to Phase II, it's going to be a huge success, clearly. The data were really impressive. But maybe you could just talk -- have you guys said anything on powering? Or kind of what's the minimum bar in RFS or DMFS that you guys need to meet in the Phase III to be successful? And can you give us your latest thoughts on the size of that market?

Yes. Let me back up and talk Phase II and then I'll answer your question on Phase III and then the market as well. So the Phase II, just to replay the results at year 3, RFS, so no recurrence or death was 49%. And so really, obviously, a remarkable impact on patients. DMFS was at 62%, I believe, at year 3. And then, I guess, it was January. January, we just came out with -- it's a lot going on. So in January, we came out with our 5-year data on Phase II, and that basically replicated. We only came out with RFS data, but it was exactly 49% again. So remarkable durability through 5 years Phase II, which we're encouraged by. If we saw close to that on the Phase III, we'd be thrilled. And I think more importantly, patients would be thrilled. And as a reminder, it was one of the fastest Phase III trials ever enrolled. So we are -- I think there's a lot of -- we know there's a lot of excitement about it. We're excited about it. And if we see something even remotely similar to what we saw in the Phase II, I think many stakeholders will be quite pleased. As for the market size, the market size, there's, I think, 100,000 patients that have melanoma and I'm just talking United States here -- in the United States. But when you whittle it down to what phase are they in, have they been resected, it's down to -- I don't know if we've given out specifics, but it's in the lower thousands, let's call it, 10,000 to 20,000. That is the market opportunity. And so -- and then you have to apply a price to it. We think it brings substantial value to patients. So it's a pretty significant opportunity for us. Even 1,000 patient, which we just enrolled in 14 months or whatever it was, in the first year would be phenomenal.

5-year OS data from Phase II expected later this year, I believe. Is there anything you could say about that? What level of benefit would be meaningful or what we should expect?

Yes. What we saw in the Phase III was early. It was promising, but early from an overall survival perspective. So we're excited to release what the Phase II data will be through 5 years at an upcoming conference, both -- for both DMFS and for overall survival. But we were encouraged by what we saw 3 years in.

Great. And beyond melanoma, let's see lung, RCC, bladder, others. When -- can you lay out the time lines for readouts in those potential indications? Which ones could come sooner than later? Could we get some of those this year?

Yes, great question. So I think first, it speaks to just how excited both Merck and Moderna are to invest behind this. We now have 3 Phase III trials and I think 5 Phase IIs or 2 Phase Is. So we've got a lot going on. To speak to what you just asked. So I would follow when these trials fully enrolled. So we had previously announced that renal cell carcinoma was fully enrolled sometime in the second half of last year. I forget the exact date. And then in our recent earnings call, we said muscle invasive bladder cancer was fully enrolled. So that starts ticking to when are the events and when can we have a readout similar to what I just spoke about from a melanoma perspective. And so that's what I would track. And then same thing with non-small cell lung cancer. We are still enrolling. But once it enrolls, then the events start ticking. But there's clearly a lot of investment behind this. They are enrolling rather rapidly. We now have 3 fully enrolled, and I would track enrollment is the best thing I would tell investors.

Great. In the last couple of minutes, maybe we'll touch on rare disease. You made the decision to out-license the PA program to Recordati. So maybe you could touch on that decision as well as also the decision to keep MMA in-house and the status of that program and the future of the rare disease portfolio.

Yes. I mean it really -- it's -- so we're thrilled to have Recordati as a partner. They already sell into PA with a different type of therapeutic. So they already have that commercial infrastructure to really rapidly identify patients that have proprionic acidemia. So this was a capital allocation decision. We think that's the most efficient way to have an impact for PA patients and obviously, impact as many as we can as pet quickly as we can. Not -- but it's also we don't have to invest in advance. So we can wait to see the data. We already have a commercial partner. And there are many numerous rare diseases behind that. So before going and investing ahead of hopefully, a positive outcome, then we can do this with somebody that already can do it, accelerate that program and then hopefully, MMA and many numerous ones behind them, we can make that choice whether we're going to create our own infrastructure. But then you'll have a data point. So they have a data point on is this performing well? First of all, did a read out well? Is it commercially performing well? So we really -- we're excited for patients, but it was also a capital allocation and I think a prudent one to not advance our investment before you actually have a readout on this.

Great. And maybe related to rare disease, but you mentioned a continued focus on nucleic acid technologies. So outside of mRNA that would include RNAi potentially or DNA. Could we see something like a new program on that front anytime soon? Or is that a very long-term statement? What's the latest there?

Yes, nucleic acids includes that. And we've -- I think that's a long-term statement. I think we -- I know we have a lot on our plate to execute and a lot of opportunity, which we are enormously excited about, including in the very near term, next 3 years. And so we have enough with mRNA technology to keep us busy for the coming years, and we're excited about it.

Fair enough. In closing, maybe I'll ask you, Jamey, what aspect of the Moderna story do you believe is most underappreciated by investors right now?

It's a good question. Well, the first one, I'll just put in the plug, and I'll answer it in 2 ways. One is the people. I think the people at Moderna are incredible. I think they are extraordinarily accomplished and have an enormous expertise. I think they are passionate, and I think they are resilient, particularly in a time over the last 2 years that have been challenging for many different reasons. So I'll put that plug in for people. Then I think in terms of the business we're building, I think it is both durable and diversified. So I don't think investors and part of this is us trying to guide investors as well that we have a pretty durable COVID franchise, perhaps more so than others might think. And I think we look at some of the contracts that we have, particularly outside the United States, that should provide a solid buffer for us for years to come. And then from a diversified perspective, I won't reiterate everything I just said, which is all the shots on goals and the fact that we can grow internationally. And then you combine that with a pretty strong balance sheet that we just ended the year with, both the cash on hand plus the liquidity we have through the loan that we have at our disposal. I think it's a really exciting story that we can invest behind and be excited about. And we are -- I'm not sure that's always appreciated.

Wonderful. Jamey, thank you so much for your time.

Thank you.

Thanks, everyone, for joining.