Moderna, Inc. ($MRNA)

All right. I guess it's quiet, so we'll probably get going then. Thanks for joining the session with Moderna Therapeutics, and thanks for attending the 2026 Bank of America Healthcare Conference. My name is Alex Stranahan. I'm a senior biotech analyst at Bank of America covering Moderna. And I'm pleased to be joined by Lavina Talukdar, Head of Investor Relations. Lavina, thanks for being here.

Thank you so much for having me. That was the best pronunciation of my last name.

Been practicing. But just for this.

But maybe just to start, you've got 4 approved products. You've guided to revenue growth for 2026. You've already beaten your own reduction targets ahead of schedule. I guess, is 2028 still the breakeven target? And is this now maybe conservative? And I guess what are the key variables that could accelerate or delay this?

Yes, great question. Thank you for asking it. we did guide to up to 10% growth in 2026. And there are 2 contributors to that growth that I would focus you guys on. There's increased growth of MNXpike, which was approved last year and participated in the fall 2026 -- 2025, 2026 season as well as our strategic partnerships in the U.K., Canada and Australia, where we have very good visibility to the growth coming from those 3 markets, owing to the fact that we've built facilities there, and those facilities have been online since 2025. So the full year effect of those contracts or those strategic partnerships come into play in 2026. We've also, as you just highlighted, beaten our cost guidance that we gave for 2025. The beginning of the year, we guided to taking $1 billion out of our infrastructure costs within Moderna, and we came in at taking out $2 billion in cash costs. So already ahead of the game, 1Q we are on track to meet our cash cost guidance of $4.3 billion for the remainder all of 2026. And so what we can control, we've been really controlling. And there are factors that aren't necessarily fully under our control that will contribute to growth in '27 and '28 to ultimately get us to that breakeven. Those include approvals. I mean we do have a flu PDUFA date coming up later this year, which I'm sure we're going to talk about. The data there looks great. We're working very well with the FDA, so there are approvals that will also play into that growth, reaching that growth as well as continued cost containment. So for 2027, we've guided to $3.5 billion to $3.9 billion in cash costs, so another reduction in 2027. So those are the things we'll control and make sure that we do get to that breakeven in 2028.

Okay. And I believe entizmeran is not contemplated in the breakeven. That would be an additive.

Entizmeran, we're expecting to hopefully see data from the Phase III study there are approval time lines that go into effect as well, as you know. We do think there's a possibility we'll see the approval there in 2027, but the first year of launch won't be a meaningful contributor in '27 to get us to the 28 breakeven. But there will be -- hopefully will be some sales from intismeran as well. .

Okay. Maybe circling back on flu that you mentioned. So you've got your PDUFA date later this summer. It got an RTF and then that was pulled back. Now [indiscernible] is resigning not saying that there's a direct line to be drawn there, but it did create, I guess, some uncertainty around the U.S. revenue build here. I guess what are your expectations around when this could become available in the U.S.? And how do you sort of see this playing out in terms of approval sequentially thinking about a combo in the U.S. as well?

So you're right, there was some uncertainty with a change in administration every year. Any time there is a change in administration and changes at regulatory bodies, one should expect some uncertainty. And I think 2025, when we entered 2025, there was a tremendous amount of uncertainty that we had to deal with, and yet we got through 2025 pretty well. We have 3 products that were approved, and we came in at the higher end of our guidance that we gave on the third quarter earnings call. So I would characterize that as Moderna really having a strong collaboration with reviewers and scientists at the FDA, including higher -- those that are higher up as well. . And so to see some more of that continue in 2026 is something that we will try and stay ahead of, but going back to that very strong relationship with FDA, the career FDA folks that are there, I think, is testament to us navigating through some of this uncertainty. Coming back to flu, as you mentioned, we do have an August 5 PDUFA date. We're on track to hopefully see what that result is in terms of a thumbs up or thumbs down on the approval. The data speaks for itself. We showed 27% better vaccine efficacy versus the standard of care there, so we're hopeful that August 5 is when we'll see that PDUFA date go positively for us. And that will be another data point that suggests that our relationship with the regulator is pretty strong.

Okay. I guess how have your interactions with the agency evolved over the past year? And I guess, are there any near-term PDUFA time lines or review interactions that are being affected in practice?

So as I just mentioned, it's been a pretty collaborative 2-way street with the FDA. And other than to say that we have that PDUFA date on August 5 and will -- there isn't much more to say on that. I think the collaboration is something that I just talked about is 1 that we're pretty proud of. .

Okay. And in terms of, I guess, sentiment, and this is going to be a Hantavirus question, Moderna's technology has always been or has had the capabilities to be kind of first mover for any emerging pandemic. I feel like that's just being reiterated with Hantavirus. Obviously, you had something in the works, I think since 2024 I believe. Maybe you can just speak about that program and sort of what we're seeing, understanding that it's still sort of an evolving situation.

Yes. So you're right. We do have an early program. It's preclinical and that's in collaboration with the U.S. Army Medical Research as well as through our mRNA access program, we've allowed for access to our technology to major institutions around the world. In the case of Hantavirus. It's with the University of Korea, and Hantavirus have an innovation center. And Hantavirus is one of those viruses that the WHO ranks as potential for becoming an epidemic pandemic. So the whole realm of pandemic preparedness is what mRNA access is also trying to accomplish through that program. And so this early stage program that we have, I think, could be something that gives us a leg up should Hanta virus turn into something a little bit more serious than what we're all reading about in the headlines.

I mean we see a lot of things in the headlines about Hantavirus. Is this another COVID? I mean it's a fundamentally different virus in terms of the [indiscernible] and spreadability and how it's transmitted. I guess, how are you thinking about this as being a potential public disaster like COVID was? Or is it maybe something that's a little bit more isolated?

So that's a great question. I think we're still learning a lot about Hantavirus. There is some speculation that there is human-to-human transmission once somebody does have or is infected with Hantavirus. It is particularly from rodents is my understanding because they are the carriers of the virus. And once you have exposure to their experiment, then it could be something that you have to worry about. But then we have heard from the recent headlines that there is a possibility of human-to-human transmission. So all of those things, I think, are going to be what regulators and health agencies around the world monitor, and we'll continue to monitor that as well. But the key point you brought up, which is being ready for something like this is what the -- where the world is today, owing to what happened with COVID and having a technology like mRNA technology as well as an early program in development, again, preclinical that gives the world a leg up on potentially avoiding something like a major pandemic.

In COVID. Well put. I want to circle back sort of on the European combo approval. That was a recent positive update for the company. And the European market does have the potential to be a large growth driver with the pandemic era contracts expiring. I guess with M-NexBike and MCombrix approved in the EU, how are you sort of seeing the European market evolving in terms of your up to 10% revenue guidance this year? And then when does the combo kind of add to that top line growth?

Yes. Great question again. So for 2026, we do not have MCombriax contributing to -- or even m-NextBike from the EU contributing to the 2026 top line. And so you shouldn't expect any contribution from the EU for 2026 growth, that up to 0%. You did mention the competitor contract that lapses later this year. And so it will make 2027 an open opportunity for us. And it's a fairly large respiratory vaccines market in the EU. So based off of demand, we believe the COVID market is $700 million in sales for the EU, $1 billion for flu and roughly $100 million or so for RSV. We'll be entering 2027. As you just mentioned, mNEXpike is approved in the EU and MCombrix, the first approval in the world for a combination flu plus COVID vaccine is also approved in the EU. We have RSV approved. And the flu stand-alone program is actually being reviewed by the EU regulators. So we may be in a position to have that product approved as well, and that would be our fifth product that's approved. globally. And so it gives us 2 things. One, the competitor contract lapses, so the market opens up for us. And then we'll have a full portfolio to offer the EU territories. And so we're looking forward to competing in that market. As of the end of 2025, sales from the EU was less than $100 million. So even if you assumed a fairly modest penetration or market share in the EU, you would see still meaningful growth coming from the EU once 2027 hits, and we're competing in that respiratory market.

Okay. Great. And I appreciate the color on the timing piece. I guess when we think about the launch preparedness in flu, this feels like kind of bread and butter for you guys, but it's kind of an established market, right, whereas RSV was like you're building that out, COVID was like the pandemic funneling into an established market, but flu feels kind of like the first established market launch. How should we sort of think about the trajectory there? And how does this get positioned versus, say, some of the approved flu vaccines?

Yes. So you're right, Flu is a competitive market. We feel we're entering that market with a very strong profile in our vaccine. So I'll remind everyone, we showed roughly a 27% relative vaccine efficacy relative to standard flu vaccines that are on the market. So that already positions us pretty well for that enhanced market for that highly vulnerable population, older adults, and people who have medical issues that might want a little bit better coverage in their flu vaccines. And so we'll be entering that market, which wouldn't include the standard flu vaccines and so a little bit more limited in terms of who's competing there. And given the profile of this vaccine plus having it be part of a portfolio of vaccines that we'll be selling to our customers I think, will position us well for that market. It's a fairly large market, the flu vaccine market. It's $6 billion worldwide with the U.S. making up roughly half of that. And so we look forward to the launch. But you're right, it's competitive. So we'll see what we can do there.

Okay. Okay. Great. I do want to shift gears and ask about oncology now. we're all -- you're awaiting the entizmaran adjuvant melanoma update. The 5-year data look pretty compelling, roughly a 50% reduction in relapse or death. I think this is kind of the context for the ASCO presentation later this month. For the Phase III interim expected later this year, I guess what is the sort of statistical framework? What are the hazard ratios that give you early success versus continued lending?

Yes. So our partners, Merck and Moderna have not discussed the statistical plan for the trial. So unfortunately, I'm not going to be able to say anything about that. We do think on timing, it's going to be in 2026, and that's been the guidance all along. So we look forward. We're just as anticipatory and anxious about that data and want to see that data as all of our investors are as well. .

Okay. And I think the Phase IIb showed a median RFS of like 19.4 months, if I'm remembering correctly. Would that be kind of a win?

The Phase II data was an absolute home run. And so that would definitely be a win. Is it the hurdle you need to have in product that could be successful on the market at the end of the day, probably not. And so I would like say, if you looked in the sea of other oncology products that are approved, you'd often find hazard ratios of 0.8 as products that are approved. And that's oftentimes in relation or with a control arm with a placebo. So not an active comparator, which hazard 0.8 means there's a 20% reduction in an event or death happening. . And in the case of our Phase III at the end of the day, if we had a 0.8 hazard ratio, would it still be a meaningful clinical impact for patients, we believe so because it's on top of a very good active comparator in KEYTRUDA. So that would still be a meaningful result for patients.

Okay. That's helpful. I guess, in a few weeks at ASCO you'll have, like I said, a 5-year data, I believe. Anything specifically that you think bodes well or sort of informs what we should be looking at from the Phase III .

So we've already released the top line data of RFS, and we said the hazard ratio was sustained at the 5-year mark as well. So a 49% reduction in having a recurrence or dying if you get the combination of intiziran and KEYTRUDA, so that already kind of tells you, when I get that question, Alex, I often think to myself, other than the durability now out to 5 years, continuing to see that hazard ratio, which we all know and it's going to be presented at ASCO as well. Do you -- can you glean any more from that Phase II? I feel like the Phase II results in of itself at 3 years and the top line at 5 years kind of tells you a lot of why we're our partners, Merck are excited about potentially having that Phase III readout. Is there anything more you'll learn? I know that outside of the Kaplan-Meier curves, and this has already been released at the abstracts, there will be some translational data. So this is speaking to the mechanism [Audio Gap] we've announced is fully enrolled and has been now fully enrolled since the second quarter of 2025. And it is one, as you mentioned, where KEYTRUDA also works. So a lot of the development programs that are under this broad development program within intizmiran is to really exploit that synergy, if you will, with INT plus KEYTRUDA because we do believe there's that synergism in terms of how the act together or behave together. And so KEYTRUDA has shown positive results in RCC as well. So it felt low risk to go after that type of a tumor because KEYTRUDA has shown a benefit already. And if this is true, synergism with intismuran, then we would expect to see that follow through in RCC and all the other cancers that we're developing this intuzmuran program in. And so despite being less tumor mutation, having less tumor mutational burden, we do think that's 1 that could be interesting. It's a Phase II randomized study, as you pointed out, an end that is nearly twice the end of the Phase II in adjuvant melanoma. In terms of whether or not it serves as a registrational study, depends on the strength of the data and also conversations we have with regulators. But we're looking forward to that data readout as well at some point in the future.

Okay. And on your 1Q call, you disclosed that your partner, Merck recently launched a new study in Stage I lung cancer. That's basically the very earliest population in combination with KEYTRUDA. I guess, does this, in your view, kind of signal confidence from Merck in the program or continued confidence. Obviously, they've been confident in it. But how should we be thinking about this new study start in the context of all the other studies you have ongoing?

Definitely continued confidence because already was a very broad development program. As you know, we have -- this is our third non-small cell lung cancer study that we've started. I think it does speak to how committed Merck is to this intiziran program. It is a 50-50 joint venture with Moderna. So they're splitting the costs and resources, all of that evenly with us. The other thing I'd say from -- personally, I'm actually super excited about this study because it gives entizmiran 2 opportunities to win. And so what do I mean by that? This is a 3-arm study where you've got in 1 arm, entismaran plus KEYTRUDA, in 1 arm, intizmiran monotherapy and then the final arm, the control arm of placebo because in stage 1 non-small cell lung cancer, the standard of care is watchful waiting. So after you've resected the cancer, you just waiting for a recurrence if hopefully it doesn't happen, but if it does happen. And so you've got now 2 active arms with intizmuran in it. So 2 opportunities to win in that study. So I'm super excited to have the ability through this study to offer patients active and proven through at least the Phase II studies that we've conducted in adjuvant melanoma to show meaningful clinical benefit with intizmuran plus KEYTRUDA as well as intizmuran by itself. And it also speaks to another thing that both Merck and ourselves have been pointing out, which is the safety profile of entismiran and the combination of the 2 intismiran and KEYTRUDA. There isn't any overlapping toxicity that you see oftentimes with other IOIO combinations, you just don't see that with intizmiran plus KEYTRUDA. And so that offers us this ability to move earlier into the earliest stages of disease in the case of non-small cell lung cancer. In the Stage 1 setting. And so the risk benefit there is something also that I think is another reason why Merck and ourselves felt very comfortable moving as early as we did.

Okay. That's helpful. I want to ask about mRNA 4359. This is your 100% owned cancer antigen therapy going after IDO and PD-L1. The IDO component of that, we haven't seen for a little while, but it showed some pretty encouraging, I guess, initial activity at [AACR] earlier this year. I guess. -- maybe you could walk us through sort of the emerging profile for that therapy. And I guess what sort of efficacy signal would be sufficient to move this into pivotal study?

Yes. Great question. So you're right. This is wholly owned by Moderna off-the-shelf antigen therapy, cancer antigen therapy and we are targeting epitopes of both PD-L1 protein, as well as epitopes of IDO-1. So the mechanism that we're using, I know when I speak to investors about IDO, they recall the small molecule approach back several years ago that did not actually have a successful readout. Here, we are teaching your T cells to look for epitopes of IDO1 as well as PD-L1 -- and we've learned a lot from INT and how we can teach your T cells to look for neoantigens. In the case of INT here, it's epitopes of those 2 proteins. And so the data we've seen so far, and we've now turned over the cards from the Phase I study at ESMO last year, we showed some pretty compelling early -- still early data in highly refractory patients. So people who have had multiple rounds of therapy, some 3 lines plus. And there, we were able to show close to 2/3 or overall response rates in a highly refractory patient population, most recently at AACR, which is what you asked about, in the Phase II portion of that study in frontline melanoma patients, we've seen the ORR now of 83%. So 11 out of the 12 patients or 10 out of the 12 patients have now had a meaningful response rate. So again, very encouraging but this is still a handful of patients of data. I think if [David Berman], who just joined us here at Moderna, were here, he'd say he'd want to see a little bit more quantum of data in a few more -- many more patients to actually then move this forward. And so we're running the Phase II. So let's see if this data consistently holds up as we've been finding with this program, then it will be ripe to move into the later stages.

Okay. Great. And maybe in the last minute that we have, I want to ask in terms of the burn vis-a-vis investing today in the Moderna of the future, do you feel like you've rounded a corner on that kind of seesaw of trimming expenses to a point where now you feel confident in building out the pipeline further, doing external BD or additional partnerships, I guess, what are sort of -- where are we in that continuum leading up to 2028. And I guess what are the investments that you're comfortable making today to build Moderna for the future?

Yes. What a great question, and I'm going to probably take more than a minute to even answer it. But -- the key thing to note on that kind of rounding out on the cost side, many of the Phase IIIs that we ran up until the last 1 that we'll be doing in the infectious disease arena is the norovirus vaccine study that also has a readout in 2026, by the way. Once those Phase IIIs are done, that cost is largely behind you because the maintenance cost for infectious disease vaccines is probably 10%, maybe 15% of sales. And so a lot more manageable and that large cost that you needed to make in order to get the product on the market is behind you. . In oncology, the cost of a late-stage development program pales in comparison to infectious disease vaccines. Phase III studies cost. And that's largely driven by the number of people you have to have in your studies in infectious diseases is tens of thousands of patients a Phase III in INT is 1,000 patients. So even though the cost per patient might be a little bit higher, the number of the N in those Phase III studies are so much lower that you can handle the cost. And so if the future for us is now going into cancer as a big therapeutic area and other therapeutic areas that don't require large clinical studies like infectious disease is due and now we have this commercial portfolio that's coming to market all of the R&D costs associated with that is behind us. And so we still can now invest without the quantum of investing being as large as it should be for infectious diseases and have a plethora of opportunity from oncology and other therapeutic areas going forward.

Okay. Very good. Well, with that, I know we're over time. So I really want to thank you, Lavina, for the great conversation, and thanks, everyone, for attending.

Thank you.