Moderna, Inc. ($MRNA)

Welcome, everyone. Thank you so much for joining us for this conversation about Moderna. My name is Courtney Breen. I am the U.S. pharma analyst here at Bernstein. And it is my privilege to have Stéphane Bancel here with me, the CEO and Chairman of Moderna. He's been in this role for a decent amount of time as well and has seen Moderna through the ages and through the different areas of the company. So I'm really excited to kind of have an opportunity to dive into kind of Moderna today, where Moderna has come from and where Moderna might be going in the future. I also know that AI is a super important topic for all investors these days. So we'll be hoping to touch on kind of the impact and potential of AI and drug discovery and kind of in operating some of these businesses. But I do also want to remind you that if there are other topics that I'm not planning on covering that you'd love to have covered in this conversation, please do send them through the Pigeonhole app. You'll find a QR code to be able to send them through. I'll receive them up here and can integrate them into the conversation. So we want to make this as relevant and as impactful for everyone's here. But without further ado, Stéphane, again, thank you so much for joining us here today. As I mentioned, you've been leading Moderna for a while, I think, since 2011. It was back kind of before there were any products in the market. Before we knew about COVID. Back before then we had the COVID vaccine. A lot has changed between then and now. What has fundamentally changed in how you're thinking about the opportunity for Moderna and how you're running the business of Moderna today?

That's a great question. Good morning, everybody. Thank you, Courtney and the team for having us here today. So yes, I've been CEO since the beginning. I was employee #2 technically. There was a scientist at Flagship VC whom the founders had recruited and I joined and we started to have the team. So of course, the job has changed a lot. If I look maybe pre-pandemic, we were really a research and early development company. We have quite a number of products in the clinic. I think my belief in mRNA has increased tremendously for a few reasons. First, nobody has got the mRNA product approved in 2018. If we take the IPO time frame, pre-pandemic, whereas now we have four products that have been approved by FDA, another one being under review right now and a lot of readouts for Phase III in cancer and in rare disease this year. So it's kind of quite a different world. And the team keeps on pushing the boundaries of the science of the platform. And so I think we're still in the very early days of what mRNA can do for patients. I've always taken a very long view on things, which is when we started the company, I used the biotech technology as kind of what I was trying to achieve with mRNA, which is if you think about Amgen and Genentech when they started in the '70s, which is like more than 50 years ago now. They had no idea they could do antibodies. They're working on human protein. And it was not working well in the early days, and then they made the first growth hormone insulin and then they made more and then made first antibodies. And if you look at the biggest set of products as we know in pharma today, it's mostly antibodies and proteins, right? And so we've always taken that arch to say, okay, if we invest in science, if you can scale the company, you can be the true platform we should be able to get a lot of medicine over time into many therapeutic areas. And so I used to spend a lot of my time before COVID on just research and early development because that's where we were. If you look at where we are today, we are very different companies present around the world. So I would say spend maybe 25% of my time on the commercial business. Which is sales, marketing, manufacturing, cost of goods, scalability, prelaunch of products like Intismeran, right now in the thick of Intismeran pre-launch activity, marketing, medical, pricing, sales. Same thing for PA, we record that on rare disease because the Phase IIIs are reading this year. That's maybe around 1/4 of my time on research and early development because, again, as I just said, I believe we're still in the early days of mRNA. I believe we are the only company at scale today because the landscape has changed a lot. CureVac used to be an independent company. It was the first mRNA company. They're gone. They have been acquired by BioNtech. BioNtech is spitting in two. They just announced as closing down their manufacturing facilities in Germany. And so Sanofi bought Translate Bio. Translate Bio, they just announced they're not working on the flu program anymore, Sanofi on mRNA. So the world has changed a lot. And I think we are the only company today at scale to be able to keep inventing new technologies. So I need to spend a lot of time helping the team find the next IND. And then I spend around maybe 25% of my time on AI today because I think it's an amazing opportunity to reinvent the business of its science or it's just how we do work. And then the rest is around talent and a bit of time with investors.

Fantastic. Super helpful. You touched on so many things that we're going to dive into in this conversation. Perhaps one thing that didn't necessarily come up as where you're spending time with some of the policy pressures. Last year was a year where I think every single biotech and pharma company perhaps spent an inordinate amount of time kind of dealing with the potential risks, policy risks that might have landed at the doorsteps of the sector. We're still seeing changes play out of the FDA, particularly. We no longer have an FDA Director of Commissioner. We've got an acting individual in that role. He's come from the food side. How are you thinking about the changes occurring in the regulator kind of impact of vaccine skepticism, but also is there going to be consistency? And therefore, how does that influence how you're making decisions in R&D and kind of the choices you have to make upfront that perhaps then don't land in front of the regulator for a couple of years?

Sure. That's a big question. So I would say, obviously, for the industry, it is really important to have predictability. I mean, every CEO said the same thing over the last couple of years because of a very long life cycle of our industry in terms of investment and returns, we need predictability. We need to know when we invest in something, is that what's going to be reviewed ? Is it going to be reviewed in the right way and so on. So that's, of course, really important. The good news, I would say, is that most of the teams do the work. So I think it's important to differentiate at an agency like the FDA, what the commissioner and the head of the divisions do, which is around the policy about the future. So of course, that is really important for the agency to prepare for the future. So not having roles filled is, of course, a problem for the country, for Americans and the health, if you think about 5, 10 years from now. But if you look at the product reviews we're having, whether it's a vaccine, whether it's a rare disease or Intismeran. It's a working team that are in constant discussion with our working team. And those teams are pretty stable. There's been a bit of changes early last year. But thankfully, for our programs, they have not been really impacted. The key players in all our key programs have stayed through since early 2025. And so I'm, of course, like anybody else anxious to see stability in the agency. To be able to have people in a leadership position to talk about for example AI. How do we use AI to file for approval? How do we use AI to do science? How do we use AI to enroll clinical trial faster, to get site faster? There's a lot of things that we can decide ourselves as how we run the business. But because we are a regulated industry, there are a lot of things we need the regulatory approval, and so we need policy clarity on those topics. So I'm hopeful because I'm not optimistic. I'm an entrepreneur also. I have to be optimistic. or I will be in different lines of business. I think those things are going to get resolved. And again, they don't impact us short term, they impact us on more long term.

Yes, absolutely. So per super helpful. I do want to get back to AI, but maybe I'll dive into some important data, particularly as we've got ASCO on the horizon and a big oncology conference and more data anticipated later this year for your Intismeran program. And just for those in the audience that don't know, this is what previously might have been called a personalized vaccine is now being turned over as an individualized neoantigen therapy that can be used to reduce the likelihood of progression or disease in cancer states. You've obviously got programs ongoing for melanoma. We've seen some very long-term Phase II data. Demonstrating durability of the outcomes and outperformance relative to standards of care like KEYTRUDA, which previously were big step-ups. How do you think about kind of what we might see later this year? What is the goal in terms of what could be demonstrated for this product? How different might it be to what we've seen in the Phase II for the product so far? And perhaps just a broader question, what could be the potential future for something like Intismeran, if you were we're thinking a few years further out?

Wow, that's a lot of questions. So I would take them in order. If I forget anything I'm sure you keep me honest. So we shared the top line of the 5-year data in January of this year with a hazard ratio of around 0.5, which we are very pleased about because it was the same as what we saw at 3 years. And so as you said, the durability of a response was extremely exciting to us, what it can mean for patients and what it can mean for the company. And what also was really exciting to us as we looked at the data in detail is the p-value. The p-value improved as well. Which when you see a study where you have duration in oncology and improvement in p-value, this is really a good sign. Again, does that mean it's going to be a great outcome, but it's a really, really important key enablers to a great outcome in Phase III. We're excited about this weekend. So there are two things that ASCOs, of course, the full data set of the 5-year data Monday morning, scheduled as a plenary session oral session at ASCO. We have an Investor Day at the end of the day to walk people through the data. We don't have direct access to ASCO. And this weekend, against public information, there is a poster about the translational medicine of Intismeran, which is really at the cell level, a very detailed work is being presented this weekend ahead of the clinical data to explain how Intismeran works. We've already shared a little bit at ASCO before including, I remember in 2018, showing in lung cancer, how we could take the blood from people -- from patients, sorry, before we inject them the product, we had sequenced the DNA of the tumor cell. So we knew exactly what antigen we coded in our product. But we took the blood before we had the first injection of Intismeran. We look at the T-cell for those new antigen. And then we do the same thing after [ four ] those, and we show that T-cells we are starting to recognize the new antigen that we knew we coded in our product. Yes we knew the patient T-cell did not recognized before starting Intismeran. So that's a great proof of mechanism. The question we all had, which is when we saw the clinical data 2 years, 3 years and now 5 years, we are very pleased to say, do you have any clinical impact because you could have T-cell activation, but have no clinical impact, and that's not the drug. But we saw the mechanism, you're going to get more detail on Saturday, and then we saw the data and now the duration of the data. So like anybody else, I'm binded to the data, when we have the data, you have unit of data pretty quickly. As we always do at Moderna, we never keep data wrapped that are important for obvious reasons. And so we're looking forward to the data. I think the piece that is exciting is that we just announced recently with Merck, a new Phase III study in lung disease. It's our second one, Phase III in lung, just to tell you, Merck's and our beliefs in the science and the mechanism. It's in Stage I lung cancer patients. If you're diagnosed with lung cancer in stage I you do not get a checkpoint today because of a side effect of checkpoints. As you know the checkpoints when they work are wonderful medicine, but they come with a heavy side effect profile. And so the standard of care today is surgery. Sometimes chemo, sometimes no chemo and monitoring the situation. But here, the idea is to try Intismeran as a monotherapy because whether in the study, we're also going to try Intismeran plus KEYTRUDA. But we are very, very excited. Personally, I'm very excited about trying Intismeran on monotherapy because we know from the Phase I study of Intismeran, we showed had at ASCO several years ago that we had response in several tumor types, including lung, because of what we understand the mechanism, partly was going to be presented on Saturday at ASCO on melanoma. We really believe that if you go earlier in disease, you have first less burden of disease. And two, you have a stronger immune system. And what is very clear to us is that this drug works by teaching your immune system, what to look for or your T-cell to go eat your cancer. And so we believe that having a very healthy immune system is very important. Earlier in disease, we believe, is going to increase the odds of our medicines working well.

Fantastic. That's super exciting. And I think the there's one question of, does it work in melanoma? And then the next question immediately is how well is it going to work in other cancer? And do they have to be highly immune-sensitive cancers? Or can they be kind of a broader set of heading towards your gastrics and other cancers and other immune sensitive.

Yes. So like in science, we have to run the experiment because you cannot know a priority. But we are deploying a lot of capital and so is Merck. Again, for those of you that are not close to the partnership, it's a 50-50 cost share now and profit share. So every time you see a study going, you know that Merck is paying half of it and the capital allocation they're making compared to a lot of other assets we have in the pipeline, of course. Look, as I just shared, we have shown earlier response of Intismeran as a monotherapy without even KEYTRUDA in melanoma, lung, head and neck. So with what we know of melanoma and the mechanism of action, we believe, I personally believe -- strongly believe. It's not the we don't deploy capital either that where KEYTRUDA works, Intismeran should help improve the response from KEYTRUDA. How much is it? Is it a 0.5 hazard ratio like melanoma? I don't know. We have to run the clinical experiment to know. Could it be better in some, worse in other, most probably. The piece that I'm excited about, as I said a minute ago, with our lung Stage1 disease is to go earlier in disease. For example, I learn talking to key opinion leaders, world key opinion leaders in melanoma that some patient Stage 2 melanoma do not want a checkpoint because of the side effect. So could 1 day we go earlier in disease, assuming the Phase III is successful of melanoma later this year, do we want to go earlier in disease because that could be interesting and could Intismeran monotherapy. We actually could become standard of care because you don't have a safety profile. I think what most people are missing about it is Intismeran, and you have to do the work because it's a different asset, it's different technology. Its the safety profile. The safety profile of Intismeran is similar as an infectious disease vaccine. So I think if you have a cancer and you're diagnosed by cancer or a loved one, and you are told you can try this drug, and it's like you might spike a fever tonight or you might have chills tonight and that's it. If you have a cancer and that's a side effect profile, like yes, sign me in. We've said it several times, but -- the Phase III Intismeran plus KEYTRUDA drug melanoma study was a fastest study Phase III of KEYTRUDA that Merck ever enrolled. And I cannot say we did it better than Merck. It's not true. Merck run the study. And they are pretty good at running clinical study in oncology last time I checked. And this was a fastest study ever enroll in Phase III. And you asked the investigators why, and I have done that myself, and they tell you Stéphane was an easy call. We had very exciting data in Phase II, 0.5 hazard ratio, one in two people benefiting and the safety profile is like our vaccine. Every patient that I told that, that they have one in two chance that this is better than what I'm going to give them anyway, KEYTRUDA. And there's no downside in safety in the like mine, which is why the PIs sometimes will tell me, I signed up everybody. Because I recommend it to everybody and when I explain it to them, they all signed up. So that's I think the interesting thing about Intismeran is its safety profile. It's unlike anything I think we have seen as a field in oncology.

Absolutely because you usually in some ways trying to...

It's always the trade-off. And when you see sometimes a lot of time, you have two checkpoints together and then you have a lot of talks.

Absolutely. So the core of your business today, though, is still very vaccines, very COVID oriented. And we've obviously been through a lot of evolutions of the COVID market. It seems like we're getting to perhaps a more stable level, predictable level of what does cover vaccine utilization look like going forward? Perhaps you can make a comment on that, but also norovirus, this is different to COVID in so many ways as you think about this opportunity. Can you talk about the market opportunity here? And what will it take for this to become a really meaningful contributor to Moderna's revenue profile?

Sure. So again, a lot of good questions, Courtney, as I want to try to unpack everything. So yes, today, we're [indiscernible] vaccine business. We have now four vaccine approved around the world. We should get through this year. And if Noro Phase III is positive later this year, we'll file it very quickly, and it could be approved next year. And if that happens, we'll be, I believe, with the largest respiratory portfolio of any company, which will be very helpful to us as we negotiate with customers because in the U.S., most people want to realize, we sell directly to pharmacies whether it's a CVS or Walmart local pharmacies. And there's no PBM in the middle. So we are direct in a B2B setting and be able to bundle product is really important. And for one of the reason we have struggled with RSV, in my opinion, is two things. One has been the market has decreased in size tremendously. Because of a lack of a recommendation by [indiscernible] for boosting people. So basically you got the first class of people who all went in. He was a great first year for GSK and Pfizer with the [indiscernible] year 2 and year 3 with no recombination yet. I believe there will be a vaccination recommendation because if you look at the epidemiology, natural infection after a couple of years, you start to be infected and seek again. And so what we've done over the last capital years is a few things. First, we've become much better at predicting the business because it was tough to model coming down from the pandemic. Because if you think about Moderna, we went from too big roller coaster, [indiscernible]. One was first going up from $0 to $18 billion of sales in the year. I don't think the company has ever done that before. That's at least what [indiscernible], let's say at a time. And then we went down from $18 billion to around $1.9 billion last year. So it's down 90%. No pharma company has ever done that because when they lose patent expiry on one product, it's one product. This was the company. So we did everything we have to do in terms of processing manufacturing. We sign the company and so on. So I think that we're in a very good place. We still have work to on costs and opportunities that I think we're in a very good place. And so what is interesting for me is last year, we were in our guidance of sales for the first time because the year before were not. And this year, we're predicting growth. And if you look at how good our Q1 was based on our outside the U.S. strategy, especially U.K. was a big driver in Q1. Even if we are flat in Q2, Q3, Q4, you will have sales growth compared to last year as you can run the math. So I'm quite excited about where we're going. I think we stabilized. We're going to back this year and sales growth and with a very diversified product portfolio now. So four products approved, maybe five by customers, maybe six by next year. and a great geographic diversification, which is, of course, very helpful. So I'm very excited about Noro because Noro has no vaccine on the market. Everybody in the room, I'm sure, knows of Noro from personal experience, it's not a fun experience to go through. I know doctors that have told me, when you have a Noro vaccine, I'm sure you're going to get every year, even though I don't get through every year, and I know I should. I get no way very because I would rather have a flow that we can be having no from doctors working hospitals, protecting all of us. And so if you think about Noro the market is clearly people at high risk, age, obviously, comorbidity, usual, cancer, cardiac comorbidity, autoimmune disease, allergy and other things that I would know those infections are very bad for. Development is going to be interesting is health care workers. Like I just mentioned the doctor to have heard it from nurses, nursing home with the elderly and then teachers, because same go talk to kindergarten teachers or lower school teachers, and they tell you, yes, I would like a Noro virus vaccine. They might not be at the full shot of a COVID shot, they take the Noro vaccine because they get Noro regularly because of just all the little kids that take off every year. And that's how we parents get Noro going back from school. So I think Noro was going to be quite an interesting opportunity from a marine standpoint. I think is going to be very interesting opportunity for product building with customers because if you look at the margin the retailers are making on vaccines. Again, for people who don't know they make profit from a discount they get from us and our competitors compared to list price. They get reimbursed by the payers, but to get an administration fee. So when you add those two numbers, it's actually a very large number. And if you do the math, you need to sell a lot of [ Kitkats ] to the same EBIT margin are selling one vaccine, which is where you get text from CVS and Walmart over time to get more vaccines and so on, that's why. So when you go to a pharmacy, pharmacist will ask you, are you here for food, you want COVID, are you for COVID, you want RSV or you on [indiscernible] because they get cash bonus, the pharmacist. So I think the bit to bundle products is really important for us in terms of share. And if you think about the growth of our customers, we arcane for product. We are the only one with combo approved at IDS, but Phase III data in the U.S., Noro. So we're going to be at a stage that was really handicapping us before where we didn't have a lot of unique products. Moderna is literally in '26, '27, '28 going to flip to a company that has not one, but several products that you're going to want for your growth, that I'm going to be the only one we're able to provide to you. So it's going to be quite interesting what happens to us in the next couple of years. The good news for us from a P&L standpoint is I don't need to add on a rep. So think about the cost leverage because I still have the same team going to CVS and the same team going to Walmart. I don't need to get the ones crop in U.S. and the manufacturing is all [ gravy ] because it's volume. I have a platform company able to spend $1 of CapEx to launch Noro or the combo. It's the same manufacturing equipment, the same people in the same factory. So what we're going to see -- and by the way, the cost of good infectious disease -- sorry, the R&D cost of infectious disease is going to come down because those Phase III studies, sunset. And so I'm going to have a very interesting P&L leverage at every line because of good R&D and SG&A. So a I love the vaccine business. And by the way, I love a [ tale ] as well of a vaccine business. Those products last forever. I mean, you used to work for Merck, those products are in the market forever. Because the buy to entry is a $1 billion Phase III.

Absolutely. And some of those products can grow for 40 years.

And plus, as we update them all the time because the COVID is different from core last year and core 2 years ago. And so there's also that aspect to it. So I love [indiscernible]. I know what everybody does, I love it.

You touched some a few things that sparked my interest and I do want to get to cut some of the cost cutting you've been through and where there still is areas to cut in, I think you made some comments about not needing to add to generate some of this revenue, which I think is interesting as well. There's also a question that's come in from the audience that builds on some of the vaccines topics. So I'll hit that first. which is we've seen an announcement on Tuesday this week that [ Eli Lilly ] has become a vaccines company again three acquisitions in one morning. Can you perhaps tell us how does this sit with your strategy? How does -- how do you see them now as a competitive set? I think there was actually some commentary from Lilly that actually echo some of the things that Moderna commented on in terms of EBV and the potential for [ Sequele ] and long-term health impacts. But it would be great to hear how are you internalizing kind of this new news.

So I think it's great news. I think first, it's a great news for the world because we need more vaccines. They are more than hardware barriers that helps human. There is vaccine for less than [ 30 ]. So having a couple of serious vaccine players is a good thing for humanity, number one. Number two, I think for everybody was running away from vaccine 2 years ago and we stuck to it because we believe there's a medical need. If you add just the depth of COVID RSV, flu and Noro, it stacks in the top 5 deaths in this country. Will you take a vaccine to not have cancer. We will take a vaccine to not a hard attack. Yes and yes, I'll take both. We see why every year, I take my true shot, my COVID shot, I got in my first [indiscernible] because I'm more than 50 in the fall. Like table stake, you want to go for sleep and run and it's healthy and you don't think of vaccines at rally. Okay. And then as you said on EBV, we believe so deeply about EBV. We believe EBV is one of the nastiest virus that hurts human. Of course, we know it mononucleosis. But it's most probably the #1 cause of [ MS ]. Many cancers are caused by EBV. A virus that stays in your body forever. It is not a good thing. It is not a good thing. Look at the new data coming on [ Shingrix ] with [indiscernible] and potentially slowing down dementia. It's only observational now. GSK is running a study, a prospective study. It's not surprising that virus stays in your brain. It inflames your brand. It's a piece of the. It was a DNA virus. It's a piece of DNA in your human cells. We does it do it creates inflammation. If anybody likes inflammation, I don't think you're feeling hard about biology. And so the one is an EBV vaccine. We have one right now. Actually, we have two, sorry. When in Phase II has a [ prophylactic ] vaccine, we're going to necrosis. And hopefully, we'll have to prove when they proven [ MS ]. Think about the nickel impact of that. And then we have an EBV vaccine as a treatment for MS patients. It's in the clinic right now in MS patients as we speak, and it's trying to manage the viral load of EBV, the quantity of copy of EBV virus, like people have managed beautifully HIV. If you think about HIV, you try to manage your copies of the viral load of HIV to keep it undetectable. So the virus doesn't do damage in your body, same EBV. And so I'm delighted that Lilly is going after EBV. And I think Lilly coming at this moment after what has happened over the last couple of years around the vaccine hesitancy post-COVID and what has happened around some vaccine misinformation the biggest pharma company in the world that is saying, "I want to deploy capital, not in one, not in two, not in three companies, I want to be a vaccine business, like, alleluia. And I'm waiting for [indiscernible] for the patients are on the product.

Absolutely. Absolutely. Prevention is one of the best interventions that we can have. Perhaps diving into that kind of costs and scaling side of the equation. I think in 2025, you took something like $2.2 billion of costs out of your business year-on-year. You're tracking to, I think, $4.2 billion in cash costs for this year. And kind of laid out a target for that even being lower by 2027, somewhere, I think [ $3.5 billion to $3.9 billion ] is the goal. Can you talk a little bit about where have you taken out cash costs? Where are you planning to continue to take out cash costs? And most importantly, where are you cautious when it comes to risking cutting too close to the bone ensuring that, that revenue content.

A lot of questions in one, Courtney. I am going to take them in pieces. So first, we came from $9 billion of cash cost. Last year, we had [ $4.3 billion ]So the first wave was really cutting down manufacturing because we need less volume. So we've had built a very large partner networks for filling. We closed most -- we stopped most of them, but [ Rovi ] in Spain now. And we had a big partnership with [ Lonza ], which did roughly half of the drug substance for the mRNA and the lipid product during the pandemic, and we also ended up a partnership with a big write-off for all those costs. And the raw material that we had purchased because we didn't know the shape of the curve, we want to make sure we can provide vaccine to protect people. And then it went down to prioritization of a portfolio of R&D. So we cut in R&D. What also helped us is some of the, as I say, infectiously studies tailed off because a lot of people don't appreciate that for regulatory reason our Phase III study in infectious disease failed, last longer than the end of your Phase III. Because for safety reason, and it's a good thing for the world, we have to monitor people in the studies several years after launch. But when those costs are to tail off, of course, it helps you in terms of R&D cost. And then we took cost across the business. We restructure the whole business to rightsize it for the work, which was a streamlined portfolio. And then -- so we worked a lot with suppliers on cost because during the pandemic, as you can imagine, given we had no time, we didn't go every time we throw an [ RFP ] process because in process takes time. And sometimes suppliers will tell you, yes, if you on this, you to sign now, this needs to sign now for 3 years or you don't get product because I want to go to say to AstraZeneca, [ Myviles ] or to Lilly to somebody else. And so we knew as we went into the pandemic that there's a lot of work that unwind that cost structure that made no sense, but was the pandemic price of doing business. Because nobody of a supplier, I'm not trying too many rocks at the suppliers just for. But nobody if you are running a supplier company, whether you make vials or anything else, you add in your business plan for 2020 that there was going to be a pandemic. So of course, in no manufacturing infrastructure, you have not -- do not have people, you own the raw material to make those products. So it was ready. That's what I can do and the capital system, right? And so we structured a lot of that cost and we're still doing it because I was just with the procurement team a couple of years ago, and they're looking at the work they are doing for '26 savings into '27 for contracts that are expiring in '26. So we still have contracts that we have work to do to improve the construction. I say cost across the whole P&L, whether it's material cost or with some consultant or other things. So cost across the whole P&L, the R&D cost, as we talked about as our RSV comes out. So this will help as well. And then the AI impact is going to be very profound because like most companies, we still have a lot of what we call AI gaps, meaning base data in e-mails and in PowerPoint and our smart sheet and in an [ ERP ] system. Sometimes it's not the same data and sometimes humans have to check out what's true. It's happening in every company I worked for. And it's even more acute in Moderna because we built the company so fast. If you think about Moderna in 2020, January 2020, we had no late-stage clinical capability 0. We had 0 commercial employees, 0. So what we have to build in 2020 is all those functions, and we build them a lot in stacks parallel to each other right? Because I heard the head of safety of Merck Rose as a safety system in 3 months. So just through one body is, great expertise, we went to still to the industry, hired those people. We paid some suppliers for some [ ITSM ] we needed that we didn't have, [indiscernible] and other companies. And so all that now we are using actually AI to go and to fit if you could start everything from scratch and do it with today's technology, even last year technology or 2 years ago technology, how will you design the business process? And we're doing it in business process by business sales. I'm personally sponsoring several business process in the company. And we are a business process across the enterprise and some business process within functions for [ Jamie ] in finance, our CFO, he is working with his finance team on things within finance, how can they use technology to streamline how they do work in finance. I'm also challenging a lot of people about how we organize across functions. So moving things also between functions, consolidating work. So there's still work to be done. I would not surprise if there's still a couple of years of work to be done. I'm not thinking you're going to see everything in cost because I'm going to reinvest some of it into product of science that you will not see at the P&L level because this work reinvention that we're doing right now is, of course, massively enabled by AI and by vibe coding, obviously. And it's going to impact every business process of the company. Like I cannot think of a business process, and you think about, please, [indiscernible], that is not going to be impacted by our ability to reinvent it with much more digital capabilities, not only AI, I mean software that we can write ourselves with an LLM for vibe coding, that we can plug to our system like SAP and so on. And then if we need a layer of LLM [indiscernible] it to use AI on that data. But to do things even in accounting. I think we can improve accounting tremendously. I think we can improve [indiscernible] in, we can improve [indiscernible]. There's not one business process at I cannot think of I've not spent time with the team that I think we can improve in the next 2 or 4 years. So because I want to pace things because if I do everything at the same time, we're not going to get a good outcome. And we need a good outcome because we're launching so many products. And we have so many good things happening at the company. So we are just doing waves of business process, and we are very senior people sponsoring them, including me, as I said, for some of them to make sure that the work gets done and that we really challenge more junior people about what really drives the value. Because like in any company, I still have people doing work that is interesting. That doesn't drive value. So I'm using that also as the moment was okay. Let's really think about everything to build more than half or tomorrow because we have a platform company in terms of the science, the manufacturing. I don't think yet I have platformized the company in all the functions of the company. That's what we are doing there.

And to that point, I mean, just continuing this AI part of the conversation, you're obviously embedding kind of this way of working and perhaps this operational lens to deployment of AI, how can we do things more efficiently. There's also a lot of talk around drug discovery and kind of can we kind of crack new problems in biology. Can we design targets or interventions that are much more likely to succeed in Phase II and Phase III? What's your kind of philosophy or thesis when it comes to the potential for the industry at large, but especially from Moderna comes to?

I want to talk about Moderna because I think the industry will depend how quickly people adopt it, how we are able to change how we do business. So can you talk about the industry with [indiscernible]. I'm extremely excited about AI for science, but I want to be realistic, investors want it next year in the sales, right? Because when the business we need to do our product and take it to [indiscernible] so for context, we have done machine learning in biology since 2016, '17. So this is not new to Moderna. We have actually invented enzymes, which are protein enzymes that we use in our factory, in our reactors that came out of silicon. And when this happened, the first time I remember vividly, the team put it. You're okay in the computer covenant we have not thought about there's going to be better than the one that exists in nature. Somebody was crazy enough to make it with their bare hands and tested. And he was doing exactly as advertised by the computer and he was optimizing the feature that the scientist that coded in the machine learning system. We've had the time data scientists because my scientist is had no ability to write the machine on algorithm. And but they had achieve what they wanted. They have improved enzyme that exist in today by basically in my own view accelerating time. In just mutating amino acid on the enzyme solving for the chemistry they were looking for, while preserving a part of the enzyme that was doing the job they need to evolving another part of the enzyme that was doing something that didn't want happening in the reactors. And that was a huge AHA moment for me because then as an engineer, I have heard about AI since encouraged, which is a long time ago. And it was this type of thing will never happen always later. And that moment was a huge AHA moment for me. I was lucky it happened before, COVID because at the time I set up on a academy with in Moderna to start earth one. Half my team for that was nuts. Then, of course, COVID was a bit of a distraction to us. And then, of course, OpenAI happened, with Chat GPT. And when Chat GPT came out, I read about it a little bit, but a good friend of mine with a software guy, told me early December, you have to try the thing. [indiscernible], you have to try this thing. So as Christmas calmly we had a bit of time. I went hiding somewhere of a computer for a couple hours and [indiscernible] because I was doing science and biology and then physics and then engineering and then [ French ] port tree and then in [indiscernible], this is insane. And again, I think led the story of Moderna, where I leave the S curve of mRNA technology from day 1. And the piece that shocked me and it was a use so for me because I've read in business book when I went to business school, I read about S curve. But I never lived the one because when I was at Lilly or at [ Boer ] that year, I was on the top of the S curve. So 3% improvement per year was great. But I've never leave the steep curve myself. I've read [indiscernible] in books. But I was a modern and my scientist will come and say, we have a 5x improvement. Like what? You have what? A 5x improvement. You really show me the data, go redo the experiment, take back 5x, I said, okay. And then after another team will come, we have 2x improvement. But that's uncorrelated to the 5x. No, it's not. So that's an exit those 2 pieces of science. So we have AHA [indiscernible]. And this had never seen before. And the piece for me about AI, and now we know because we're a bit of a few years behind us, if you talk to people the hyperscalers and so on and people at OpenAI or Entropic or [ DeepMind ], they'll tell you, as you've read doubling of compute every 6 months. Well, I can do math. You guys can do math, right, you can compound on your computer, right? So I have that moment that December when Chat GPT came out, oh geez, this is going to be a big deal. Not necessarily now, but this is the worst version I will ever see in my lifetime. And it has been true every time I've got a new version. And so when we did that, I reached out to some Sam Altman say, "We need your thing, but I cannot teach everybody else with my data". So we did something which basically we've got a license for our product on AWS, but only for more than I use. And then we help them develop GPT Enterprise, which is now the product we use for all the employees of the company. And in science now, I think it's going to change two big things for us. One is, let's talk about the field. I think we are going to accelerate the pace of learning about biology. Keeping about immunotherapy that changed the life of so many created so much value but what we do with Intismeran and so many of the biology insights, we have -- we are accelerating as a field, the pace of biology insights. And we can now do because barges very complex systems with negative feedback loop in very complex biology. If you knit the biology we have done a human so far in the last 50-plus years is one gene, one target. Most of the biology in our bodies don't work like that. Which is why I'm excited about MRNA-2808, one of our products in the clinic, multiple myeloma, for mRNA in the drug going after full target in one chart. That's the future of medicine. You cannot do that if we're not [indiscernible]. But you can know that by mRNA. We've done already the mRNA with 11 mRNA in monkeys. So I think the [indiscernible] tailwind we're all going to get is going to be amazing. And those are going to be able to catch it, which will go back to comment but the industry, the company is going to be able to catch it. And change how they work and have the workforce to change how they work and be humble to sometimes say to stop this job it will structure a job differently. I need a different skill, I need to upgrade people. So it's going to be a very painful process to adapt the workforce it's really like when you work into the factory when you went from people looking at from by hand and having machines 100 years ago. It was a huge change. It's a huge change management test. So people are going to have the courage to do it and the skills to do it are going to benefit it tremendously. The second piece that's unique to Moderna is mRNA technology know-how. So what we're building now is a huge flywheel where AI generated hypothesis on M&E technology. I'm not talking biology, mRNA technology, build the mRNA, build the lipid, we can do fazed at the same time, a fatality time, we take me several years before. [indiscernible] in 1 run. Do the in vitro testing, go in animals, go in humans, feedback learn and keep going. I would argue there's no company in the world that has -- or public institution that has as much human data as Moderna. Same thing for monkeys. Why not scale Moderna to go run a 100 monkey experiment when we have to. With six or seven arms in the study too long. We're obsessed about learning about mRNA. It's one thing that has been since day 1. We believe this is a very long game over several days. We want to be the company we know the most about the mRNA on the planet. And we want to use data we have now an AI to learn even faster because I want nobody to be able to catch up with us. And to bring that accelerated learning to patients from new medicine. And my goal is to be able to combine two things. So we're developing internal AI machine learning on mRNA, partnering with the best on the biology, whether it's Anthropic or an OpenAI or DeepMind, Google, the best biology and access to all the platforms, I'm not abated to any platform in biology on the best platform. And within the platform of changing each other. We have already processing in a company where you ask the system, the same questions, and you haven't debate the same question in front of your eyes. It's fascinating. About very complex biology and sometimes scientists I didn't think about it. A bit like remember we [indiscernible] came and people are protonated you, the competitor made a move had no human that they were recorded, we [indiscernible] in biology. We sent to see insights that no human scientists that we're aware of published on or documented. And so combining those two things to design drugs. So the scientist of Moderna starting today because I have pieces of those two vectors. I don't have the full vectors yet. But getting those two vectors to be able to design your medicine is going to be fascinating. So then, of course, we have to take them to a clinic. The piece I think the development process will be accelerated is like all my peers from GLP talks to filing an IND to Phase I and Phase II, Phase III data BLA, it's all a business process, sorry. It's all hundreds of business poses all of them, you can apply AI vibe coding to shrink and shrink and shrink. The ultimate thing which most will take here is, can you start doing some clinical trial simulation in silicon I think it's for tomorrow, we need the FDA stability as described and so on. But given there's a finalized number of cells in the human body, given we have 20,000 genes, given we have 40,000 metabolites. It's a very big math problem. -- but it's not an infinite math problem. That's why you see us partnering with IBM in quantum 2 or 4 years ago? Because quantum is going to happen. I don't know precisely, it's happened in '29, in '30, '40, it doesn't change anything for our trajectory. But when it starts working, when I can buy compute IBM or Google or Amazon on quantum, I want my team to know about quantum to understand quantum to have very for how do we use quantum that we're doing. We've already had several problems that the team solved with quantum that we couldn't absorb before -- that has really happened. But I want to be ready for when we do run with quantum because I don't want to discover, we need to do quantum now. It's not how we think about technology. I told you AI 2018, AI academy at Moderna for all the employees, 2016, first machine learning. So I'll do the same thing on quantum because I cannot even understand but my brain cannot understand what quantum and will do together. Put on compute quantum I want to be able to solve a very big science for. So I think 1 day will look clinical trial, not necessarily a full thing, but we do negotiate in [indiscernible].

Much better prediction.

Yes. You can predict all the biology. It's just -- it's all science and math. What happened in our body is not black magic. A lot of things we don't happen, but it's not black market. It's chemical interaction. It's molecule binding to which, it's all physics and chemistry. Sometimes it's quantum physics. We've done quantum Moderna to sort some problems. Sometimes you have to go there science bigger is solvable. You just need enough compute. That is why I am more excited.

It's a very exciting future and kind of particularly when you sit here and think, and I think others have said maybe it's 1%, maybe it's 5% of biology that we understand the amount of potential unlocks that exist in the future.

And maybe just a side note because it's public information. I'm on the board of General Bio. General Bio has a Phase III drug that came out of a computer. The team designed it with some features they wanted on half-life. The computer design the antibodies. You went into the clinic. It's in Phase III now, and it's working in patients in Phase II as advertised. It's in Phase III now. So the notion that can we make a drug using AI, I think, is a question already answered, yes. The question is what type of innovative drug, but you cannot even think about today, you can make with that. I mean we had a town hall after an earning call, and I told the team because I spent 2 days deep in science before that, as [ Levina ] was preparing the call and everything. And that's sort I'm convinced we have not invented our best drug yet. I'm deeply convinced, I believe in this brand should be amazing for patients. [ PA ] already the patient stories we're getting from parents for where these are unbelievable the Christmas stories and so on that they never had a Christmas story like this. All the isolation and deaths were preventing with vaccines, but I'm convinced in every set in my body, we have not yet invented besides.

That's an amazing place to end this conversation, perfect timing and a very exciting kind of path towards innovation for the industry as a whole, but also kind of Moderna's journey within that industry. So thank you so much.