Novavax, Inc. (NVAX) Earnings Call Transcript & Summary

Good day, everyone, and thank you for joining the H.C. Wainwright 23rd Annual Global Investment Conference. My name is Vernon Bernardino, and I'm a senior analyst at H.C. Wainwright. While we are in a virtual format this year, we're confident we can provide value to you with over 850 companies presenting and available for one-on-one meetings. We recommend you meet with all of our companies as each has a special story that you should hear. With that said, I'd like to introduce to -- you to a special company, a company called Novavax, which is developing next-generation vaccines. With us today are President of R&D, Greg Glenn; and Chief Commercial Officer/Chief Business Officer, John Trizzino. Welcome, gentlemen.

Thank you.

Thank you, Vernon.

As I said, you're developing next-generation vaccines. I was wondering what differentiates 2373, your lead vaccine for COVID-19 from other COVID-19 vaccines?

So I'll start with that. The vaccine we have is a recombinant -- full-length recombinant spike protein in a nanoparticle adjuvant with Matrix-M. So that's kind of a mouthful. And I think what that together represents is a particle that looks very much like a virus. And so by all those elements being incorporated into the vaccine, obviously, it's recombinant, so it's not live, it makes it very, very immunogenic. Therefore, you give a very strong immune response and you can see as we -- it manifests itself as very high efficacy. So distinguishing high-level recombinant protein in an nanoparticle with the Matrix-M adjuvant, which is itself also a particle. And together, the theme is to induce very strong immune responses with very low doses and with -- in a very safe format.

Now you've conducted multiple studies. I think a lot of people are familiar so we don't have to go nitty-gritty into the science. So we can go ahead into, let's say, talk about the multiple studies you conducted in different geographies, including a Phase III in the U.K. in another Phase III in U.S. and Mexico. Can you refresh us on what you've seen in the data so far from the studies?

Yes, that's right, multiple trials. We had the lead-up trials in the Phase I/II mode. And then we've done 2 large, randomized, placebo-controlled trials, one in the U.K. and one in the U.S. And I would just say the hallmark of our vaccine in those trials is it's highly efficacious and the profile of -- the safety profile is very good, very favorable. One thing, it may not be so obvious, but these trials are done with different manufacturer's process. The scale was a little bit different. We're in 2 different geographies, but we have very, very consistent results, and that is 90-plus percent efficacy against any symptomatic COVID disease, which is really outstanding. Of course, as you look at the more severe outcomes, we are seeing 100% efficacy. So very strong, I would say, data by performing 2 randomized, placebo-controlled trials, which is generally speaking for vaccines, well in excess of the usual data required for licensure. So great results. The other, I'd say, one more feature, if I may mention it, is these trials were done in sort of December winter time frame when the variants of concern began to emerge. And so as you can imagine, like flu, there was a sentiment that it would be good to have the sequence of the protein put into the vaccine match what is circulating and some risk that the vaccine, if it was not a match for what is circulating might not be highly efficacious. But you can see, like our flu technology, we induce a very broad immune response. And really our efficacy against the variants of concern was really quite good. And again, in the 90%, really no appreciable drop-off. So the evidence that we have from these randomized clinical trials is very, very strong, statistically very strong and really gratifying to look back and see how we have generated such high-quality data.

Now without going into nitty-gritty, there are also variants of interest, VOIs. What evidence do you have regarding the vaccine and cross-reactivity against the variants?

Yes, that's a good question. So we -- and this may lead into a sort of part of the next part of the conversation is that we had the opportunity to do a booster. So we took people from our Phase II trial that were 6 months out and we gave them a booster of our vaccine. So still the 2373 prototype, Wuhan-based sequence, and then we were able to look at the immune response in those -- in that boosted population. And we very specifically assayed the immune sera for the ability to block binding to the different spike proteins. That is the Alpha, the Beta, the Delta and the prototype strain. And first of all, we could see from the original immunization that is done with 2 doses and blood at day 35, we had quite good responses. The best response, as you could imagine, would be to the match strain, but we are also making pretty good antibodies to the Delta, Alpha and Beta. On the boost, those antibodies were four to sixfold in excess of what we found to be protective in the trials. Speaking 90% to 100%, depending on what you look at, protective against any symptomatic disease. So on top of the information that we have that the vaccine is highly efficacious, we have this data showing that really high antibodies, highly functional antibodies against Delta, Beta,and Alpha, all would be high -- very much in excess of the antibodies that drove the 90% to 100% levels of protection we saw. So that's really quite encouraging as we go out into the environment, I think one of the roles we will play, it's important in the future, will be as a booster vaccine.

Yes. And I think we'll now talk about your flu vaccine which also is in the Phase III stage. But I think what you have seen with the SARS-CoV-2 and the cross-reactivity confirms that your technology definitely is one that elicits a very strong cross-reactivity, perhaps among several types of viruses as it was shown with your flu vaccine. Now regarding these emerging variants, what is your strategy with that going forward? I mean there's a booster strategy, but in general, what is the strategy with variants?

Well -- and so again, as I mentioned, as we look at the antibodies that were generated by our strain match vaccine, we saw quite good cross protection. And so based on that, we are not in a rush to change our deployment strategy because it seems both -- in both those contexts that we could expect good protection against the variants. And that really builds on the data we have in our trials, where we did have evolution variants of concern show up and we still saw really very little decrement, if at all, in the protection. So I think going forward, we still see the vaccine that we have as you say, it's reminiscent of flu. Our technology is specifically designed to have a result like this. So the 2 features are we have a full-length protein. And the way the protein is in the nanoparticle, the parts that vary and the parts that don't vary are seen equally well by the immune response to the immune system, and so we have responses to parts that do not change and vary. So that's one feature. And then Matrix-M, our adjuvant is really, I would say, uniquely able to induce responses that are much higher to those parts that don't vary. So those drive broad -- the breadth of protection. We saw that with a lot of molecular definition in the context of flu because that is a major issue for flu. And again, I think we're seeing this manifested as these broadly functional immune responses across strains from the COVID-19 vaccine as well. So I think it's a feature we expect in our technology. It's really been gratifying to see that coming true again in COVID with the viral disease, which has a lot of the same mechanisms of infection, viral evolution as flu. So this is at least conceptually very familiar ground for us.

Now there seems to be special things about your Phase II inhibition assay, what have you seen there, particularly with the Delta variant?

Yes. So this is actually -- as you know, measuring the immune responses can be done from fairly different angles. One is to measure spike antibodies. It's not very specific. It's commonly done. Neutralizing antibodies, where you grow up the virus in its cell setting, they have generally been felt to be important and potentially predictive. We like the receptor-binding inhibition assay because that is really specific to the variants. What we do is you make the spike, you make Alpha Beta, Delta. As you know, they will -- the variations will be reflected in the spike structure and very much affect what antibodies can recognize them. So we -- they, however, all recognize the ACE2 receptor in the humans. So we make recombinant human ACE2 receptor. We make spike for the different variants. That interaction is extremely high affinity. It's like super glue. That explains why these viruses are so very infectious. And so the -- what we are doing this assay then is measuring the ability of the antibodies to block that very high affinity interaction. So it's our opinion, if you have a receptor-binding blocking antibodies specific to the variants, it's a very good indicator that the vaccine efficacy will be high because you're blocking that initial event of infection. And so I think that's why you see in our clinical data that we're blocking symptomatic infection, which is really not easy to do mild, moderate or severe at a very high rate. And I think that, that assay is a reflection of the approach to block infection, if you will. And of course, we have quite a bit of nonhuman primate data, where it's fairly easy to assess the block -- the ability to block infection. And that, again, is a hallmark of our vaccine, is we can challenge these immunized nonhuman primates with virus and show that there's no viral replication in the nose. And so that's a really -- it's an important indicator that our vaccine can actually block infection as well as disease.

Now the recently announced 6-month booster data was exciting, very promising. But it seems like the science around boosting and thoughts about boost strategies to a lot of the bodies. How do you think about 6 months versus 12 months? What the -- factors do you need -- think need to be considered?

I think what you're seeing with all the technologies today is something experienced vaccinologists know that the ideal regimen in naive subjects is to give them a prime, a boost and then a boost sometime out 6 months to 12 months later. So if you're a pediatrician, we gave -- we would give 3 shots and then a booster later on. And precisely for that reason that when the antibodies are high, you're going to get protection. But if -- there's a point where you -- at the end of the year immunization regimen, they have a peak and then, like skiing downhill, the antibodies are going to come down. And the link of that ski trip is proportional to the height of the antibody. So if you have very high antibodies, it takes longer for that to decay. But when we're looking at the COVID vaccines, we expected to see decay and I think you're seeing that in every study. Everyone's assays are a bit different, so people are trying to maybe compare a little bit. I think that's difficult. But I think one clear principle in every case, if you immunize at day 0 and 30 days or 21 days, at 6 to 8 months, you're going to see the antibodies fall off and it's worse at a year. So I think it's very wise because we're struggling, right, to contain this pandemic is to get everybody with high levels of antibodies. And you can do that at a 0, 1 to 6-month regimen. And I also think that going forward, we'll be -- we expect that a 12-month boost will be in order. And then if you've been immunized after that, then I think we'll probably end up with a annual boost. So I think that's -- every vaccinologist knows that's the best way to get the high-level sustained antibodies. I think you'll see us migrating towards to that. I hope we do. Because I think this -- obviously, the pandemic is in need of control, and that really is the ideal way. Otherwise, you get breakthrough infections. As people's antibodies wane, we're seeing that, and that's just not a surprise to us. So it doesn't mean the vaccines don't work, your protective immunity is almost never permanent. Immunity is, you have developed memory, it really pretty much persists. But to be at the level to really protect you against infection in severe disease, it needs to be at a certain level, and it's not going to achieve that level with just a simple day 0, 1-month immunization. The boosting is really vital.

Yes. And I'm seeing more and more anecdotal stories about breakthrough infections in people who are vaccinated. And it actually seems to be different of Pfizer versus Moderna's vaccine, so that should be an interesting study to -- results of some kind of study to come out by them in the future...

I think you're going to see that body of data grow over time as there's more distance between the -- obviously, it wasn't such a obvious factor back in March. And as the summer has progressed, it's more obvious. And I think you'll see that data grow. I hope that the public health authorities will continue to recommend going towards boosting, which I think is a wise and really the very needed regimen.

What's also intriguing about this is the U.K. study, in which you're using 2373 to boost on top of other vaccine regimens, the other vaccines that is. Can you walk us through as in why are they important?

Yes. So right. So there's 2 -- there's actually several efforts. There's 2 efforts going on in the U.K. One, where we were invited to participate in a study where they immunized with one technology and boost with another, so obviously that provides flexibility for users of our vaccine. Again, if you ask vaccinologists from a science standpoint, we know that that's a great way to go. If you prime someone with a sort of an angle of presenting the spike protein's immune response is different from the way you boost them, you typically get a better, higher-quality response and a high -- a little higher response. So the other study we're doing is where they've been primed and boosted 6 months ago with either mRNA or adeno vector-based technology, and then we're coming back and boosting with our vaccine. And again, our expectation would be that, that would provide the kind of safety and immunogenicity data that will allow people to look and say, well, that's a good -- that works. And so again, we fully expect, again, I'd say, vaccinologists know this, that the recombinant antigen is extremely good way to boost people who are primed. And so we're expecting that our vaccine would really look quite good in that setting. Those are 2 studies that were sponsored by the U.K. government. So we don't have full control of the information. The data is being generated by outside labs, but -- so we're looking forward to seeing that in the coming weeks. So that's one way to cover the topic of boosting and make sure that we have data with your own vaccine, which we're generating and then vaccine on top of other licensed vaccines, other technologies, quite different managing presentation through mRNA and vector priming. So that will be very interesting data. I think we're optimistic it will look quite good.

Now switching to the regulatory front. When do you expect to get approval for the EMA? And how many doses are you planning to deliver?

I'm going to turn that over to John who's really heading up the commercial...

Yes. So yes, it's a pivotal question, Vernon. And so a tremendous amount of progress has been made and continues to be made. I think it's important for everybody to recognize that we've built a global manufacturing infrastructure over the last year that is robust, 8 different antigen manufacturing facilities in 7 different countries. And of course, the dozen different regulatory authorities that we're engaged with in order to share our information, rolling submissions as we reported before about how we're sharing that information, so that we can keep them as updated as we can in our progress. I think most everybody at this point is aware of the fact that we've now filed with our partner Serum Institute in India, Indonesia and the Philippines. Of course, there's keen interest in what we're doing in the high-income countries. And so there's been a lot of work done, specifically over the past few weeks with pre-submission meetings that have given us the chance to kind of engage with the regulatory authorities and get some input from them about the variety of topics that would be in that final CMC package, which is really kind of the gating event at the moment. And we, at this point, have alignment with these regulatory authorities on what will be needed. We've made some adjustments, and that's taken a little bit of time to execute, but it's all been very positive. This has resulted in a converging of what these different submissions look like. And so I think what we're left with is that, today and then kind of through only a short next couple of months, you'll be seeing a variety of these submissions being made and complete submissions for review by these regulatory authorities. So I think we're confident in that position and what's been going on. I think we've also talked about the assay work that we've been doing and some of the challenges we've had with some of the assays that are, generally speaking, kind of very complicated to get completed. We're happy to report, again, like the other regulatory filings that we've engaged with the appropriate regulatory authorities, have sought their comment and input on analytical methods. And that at this point, we were -- are ready to include those in the final submissions and that we have now validated all of these assays, and so we're confident in what the output is going to be. And we've also begun testing the produced vaccine with these assays. So I think it's a great setup for us to get to this Emergency Use Authorization, accelerated approval, EUL and WHO and so across the board. So happy to report all that and provide that update.

Now is there any prioritization of these submissions?

I think because they've all converged. I mean, Greg can comment on that a little bit because he's been knee deep in some of the technical parts of those documents. But I think at this point, we'd love, from a prioritization standpoint, for all of them to happen tomorrow, but it's only going to be a few short weeks after that we'll be able to do that. So not necessarily a prioritization because those packages will be fairly similar or comparable. Greg, did you want to add to that?

Yes. There's just a lot of overlap on the types of information that need to be submitted. Everyone has their custom set of questions. And so I think it's really kind of a cloud marching together with these different regulators. So we're trying to respond to everybody on their time frame. So I think U.S., MHRA, EMA, India, Indonesia, they're all getting our attention. And I don't think there's really a -- I couldn't say there's really a prioritization. It's much more responding to all the information requests we get from them.

I'm definitely making a shameless plug for my home country in the Philippines. So...

Well, they are -- just to say, that shameless plug, they are confident, they're reviewing our package. They really like our vaccine. That's the -- the play there is they've got a big unmet need, and they know what they're doing. So they've...

No, it's true. They definitely want a protein vaccine for sure. And how many doses are covered by your advanced purchase agreements?

So yes, that's a good question, too. I mean we've done a lot of work there as well. And we've, at this point, have reported much of this. But to frame it, we've got the 1.1 billion doses that have been committed as part of our CEPI, Gavi, COVAX commitments with 350 million of those doses coming from Novavax and another 750 million coming from Serum. And which those would -- and intentionally so the way that we tech transfer to Serum was to be able to allow them to ship to low- and middle-income countries. We have advanced purchase agreements in about 400 million doses with New Zealand, Australia, Canada, U.K. The most recent one that was announced was up to 200 million doses with the European Commission. We still have the 110 million doses that we're manufacturing for the U.S. government under the original operation work speed. And then, of course, this is just kind of the preliminary first step that would take us through shipments that would be completed by the first half of next year. And then there's the conversations we're already having about additional orders on top of that, what does it mean for booster demand. There are still many, many countries, upper-middle income countries, tier 2, high-income countries that are still kind of woefully behind as far as their vaccination rates that they still have to get their first regimens, but then they have to then follow up shortly and get their booster dose as well. So our assessment based upon all of the research we've done, the conversations we've been having with all the global organizations and policy-setters, that global demand is continuing to outpace supply. We're going to probably continue to be in this pandemic period easily into 2023. And we look forward to our global supply of being, minimum, of 2 billion doses in all of '22.

Now this is a herculean effort in probably every corner of the company. And so a lot has come together as far as being in a position to not only put these agreements together, see the needs out there, put in these tech transfers and so on. Can you talk about the manufacturing capacity? That's one of the things that perhaps have been scrutinized the most in the past year. What progress have you made to get ready with your supply chain? And what remains outstanding to reach, let's say, the monthly capacity of 100 million doses by the end of the month and 150 million by the end of December?

Well, yes, we're virtually there. I mean, it's been -- you're right, it has been a significant amount of effort put forth to build this infrastructure basically from a dead stop, right? We didn't have any manufacturing capacity in place when we began this COVID-19 adventure, if you will, and have built that -- built it up in the combination of contract manufacturing facilities, FUJI in the U.S., FUJI in the U.K., Biofabri in Spain. We have an owned facility in the Czech Republic that has the capacity to produce hundreds of millions of doses. Of course, our partnership with Serum Institute in India, work we're doing at SK Bio in South Korea, a licensure that we have with Takeda in Japan. And so that tech transfer takes a significant amount of effort. You go through a scaling-up process to make sure that you can manufacture at scale. And then you go through a cadence process, whereby you're improving the cadence on a monthly basis so that your manufacturing, increase number of batches over that period of time to maximize the capacity of that facility. But yes, 100 million doses, as we've talked about for -- before the run rate by the end of Q3 and 150 million dose run rate by the end of the year.

Now I wanted to come back sort of what may not easily seem a full circle. But early this week -- and I mentioned earlier, your flu vaccine in Phase III stage of development. Earlier this week, you announced the start of a Phase I/II study of a combination vaccine for influenza and COVID-19. What is the significance of this program? I know what it is because I've been plugging for it for some time. And as you know, Greg, I've been rooting for the flu vaccine for a long, long time since the [indiscernible] days. Can you talk about significance and the opportunity of a combination vaccine?

You're on mute, Greg.

I'll say a few things and then pass the time to John. We're very excited about this as a way of addressing these really life-threatening viral diseases with a great technology. And there aren't a lot of combination stories and certainly in older -- in adults, none. So this is a great way to provide convenience, which helps compliance for vaccines that are working. And we think the recombinant nanoparticle Matrix-M adjuvant platform, which has proved so good to -- in terms of efficacy with COVID, we think we can take the learnings from that and try to translate that into a better flu vaccine. So we're very excited to have started this. I mean we've been completely focused on COVID as required, but we are able to sort of create a team. I think last spring, and we said this is too important. And Vernon, you don't think it's important, so we are listening to you and -- but truthfully, it's I think got a lot of potential. We're very excited about it. And I think John, also like you, he's always been saying this is important for Novavax to get back on track with this. So we are, and I'll maybe pass it over to John to say a few things.

Yes, I just want to echo Greg's comments about how excited we are about this program for multiple reasons. One is, is there is an absolute need in the flu public health policy world for a better influenza vaccine, right, especially within the older adult community, immune compromised, the vaccines today aren't nearly as effective as they need to be or should be for those target populations. We demonstrated success and reported all that data out for those listening in right now who may not be aware of our successful Phase III trial. For nano flu, we achieved all of our primary objectives in that Phase III immunogenicity trial. And we're fully intending on moving forward at an accelerated pace to licensure. And a little thing like a COVID pandemic kind of got in the way of that, which made it difficult for us, one, to move forward with any additional work there. But obviously, as a result of our laser focus on developing COVID. But now you -- as Greg said, now you have 2 candidates under a recombinant protein nanoparticle platform using the same adjuvant that could potentially be vaccinated in the same frequency and time frame at the beginning of the typical annual respiratory disease season. And we think this will have a profound impact in order to protect those most vulnerable from 2 very serious respiratory viruses.

Yes. Is there anything in particular you'd like to note about the design of the combination vaccine study and the formulations? Because I'm also excited unabashedly about the combination you're putting, the respiratory syncytial virus work that you've done, which has also achieved a Phase III stage.

Yes, I think it lays the groundwork for -- we are, we're committed. So this -- I mean, to be the nerd here, these are type 1 fusion proteins we -- good. Yes, you're the nerd. We know they work by a similar mechanism. And this year, this past year, has provided a fantastic proof of concept for the technology. And if you had to hone in on a topic, it's the type 1 fusion protein infections like RSV that are driven by these proteins. And so we know that we can return to these topics. I think where RSV protein program struggled had a lot to do with the design, the inability to go -- design the clinical trials and go with sort of the longer, bigger trials, I think we're in a very different situation today. Lots of learning from our clinical experience, and we are very eager to get back into the RSV business, too.

Perfect. I think that's all the time we have. Definitely, I can talk tons more about your next-generation technology and the exciting results it has generated in 3 different programs. But I do want to thank you for your time. Thank you, Greg. Thank you, John. I want to thank Novavax as well as all of our presenters for taking part in what has been a very productive and informed series of presentations. Hopefully, our next conference will be one that we can hold in person. But in the meantime, we're very grateful for your flexibility and your online attendance this year. Thank you again from me and the H.C. Wainwright team. Thank you, John. Thank you, Greg.

Welcome to our panelists, corporate and investment clients. I'm Michael Meyers, Vice Chair and Head of M&A and Strategic Advisory Services with H.C. Wainwright. And on behalf of John Chambers, our President and Head of Investment Banking and all of our Wainwright colleagues, it is my pleasure to welcome you and wish you a productive last day of the Global Investment Conference. I hope that you have found the content and evening events both educational and enjoyable to include company presentations, one-on-ones, our fireside chat with Scott Gottlieb and clinical trials panel, our virtual cooking together and tour and tasting of Far Niente last night. With that, I would now like to introduce our moderator and facilitator of our Best Practices Planning for the Next Pandemic panel, Dr. Scott Gottlieb. Scott is a physician and an investor who served as the 23rd Commissioner of Food and Drugs. Scott continues to be a leading voice of timely information in respect of our current public health crisis. And Scott is likely responsible for Face the Nation's recent Emmy nominations. Currently, Scott serves as a resident fellow at the American Enterprise Institute and a special partner with NEA. Scott is also a member of the Board of Directors of Pfizer, Illumina and Resilience in addition to other leading and innovative companies. And apropo of our panel this afternoon, Scott is the author of the soon-to-be released book, "Uncontrolled Spread: Why COVID-19 Crushed Us and How We Can Defeat the Next Pandemic." So welcome to Scott. And with that, I'd like to ask each of the panel members to introduce themselves and their companies. And maybe we'll start with John Trizzino of Novavax.

Michael, thank you for that. Michael and Scott, thank you for the opportunity to be on this panel discussion today. John Trizzino, Chief Commercial Officer and Chief Business Officer here at Novavax. Novavax has been laser-focused for the last 18-plus months on development of a COVID vaccine. We have made tremendous progress during that period of time. I think we'll have an opportunity to talk about some of the partnerships that we've engaged with over that period of time and also to talk about our technology platform, recombinant protein nanoparticle, use of our novel adjuvant platform and the fact that we're now looking forward to some pipeline activities with regard to COVID, flu combination. So thank you for having me and look forward to the discussion.

Thank you, John. George Scangos?

Sure. Thank you, Michael. Thank you, Scott, for the opportunity to be here. I'm CEO of Vir. Vir is a 5-year-old company focused entirely on infectious diseases. We made the decision to focus on infectious diseases before COVID. We felt there wasn't enough activity in the industry aggressively focused on the control of existing diseases and potentially for pandemics. We have brought forward monoclonal antibody, sotrovimab. Of course, we have an EUA in the U.S. and equivalent approvals around the world. That is quite efficacious, a 79% in the Phase III trial reduction in hospitalization and death when given to newly diagnosed patients. And we have activities on many other infectious diseases as well and as well as additional approaches towards the control of COVID and other coronaviruses.

Thank you, George. Ute Berger?

Thank you, Michael, and thank you for the invitation to the panel. So yes, my name is Ute Berger. I'm the Senior Vice President for Medical & Scientific Affairs, Pharmacovigilance & Patient Safety at ICON. ICON is one of the world's most advanced health care intelligence and clinical research organizations. We have a global footprint with about 38,000 employees across the globe. And our mission is really to help clients to accelerate the development of their drugs and devices. And we are focusing really on innovative technologies on how we can leverage data, how can we include on-site networks. And also, we have a significant team of therapeutic experts that work with the clients on developing their programs to get [ together ].

Okay. Thank you, Ute. Cameron?

Thank you, Michael, and thank you, Scott, for inviting me to join you and colleagues on the panel today. I'm Cameron Durrant. I'm the Chairman and CEO of Humanigen. Humanigen is developing a portfolio of monoclonal antibodies. Our lead project is with lenzilumab. Lenzilumab neutralizes GM-CSF, which has been shown to be strongly implicated in cytokine storm, which afflicts people in a number of conditions, but our focus has been in the hospitalized hypoxic COVID-19 patients.

Thank you, Cameron. Bill Enright?

Hello, Michael and Scott. Thanks for having me on the panel. And so I'm Bill Enright, I'm the CEO of Vaccitech. Vaccitech is a clinical-stage immunotherapeutics company primarily focused on utilizing the T cell arm of the immune system to treat chronic infectious diseases like hepatitis and human papillomavirus as well as in oncology. But the platform that we're utilizing also induces a very robust antibody response, and we were involved in the early development of the COVID-19 vaccine that we out-licensed to AstraZeneca through Oxford University.

Thank you, Bill. And Dwight?

Good morning, everyone. Nice to be here. Co-Diagnostics is a molecular diagnostics company with a unique patented platform for the development of diagnostic tests. We've been a leader in COVID-19 testing since the pandemic began, the first U.S. company to have a CE mark for the COVID test. And we shortly thereafter received a FDA-granted EUA. As a result, we've supplied tests for more than 50 countries around the world and throughout the United States. Most notably, over the last 18 months, we've also developed an at-home point-of-care platform. which we're very excited about and we'll talk a little bit about today in terms of what we think is a part of the solution for the forthcoming pandemics of the world and other needs in infectious disease.

Great. Thank you, Dwight, and thank you to all of the panel members. Scott, I will turn it to you.

Well, thanks a lot, Michael, and thanks, everyone, for being here. I thought I would just offer a few thoughts of my own, and I want to turn to George just to give us a sense of where we are with this pandemic and what he is seeing, what keeps him up at night. I know that George is very focused on trying to develop therapeutics, not just against the current threats, but what could emerge as the future threats as this virus undergoes adaptation mutation. I think that one of the resounding stories that will come out of this pandemic when people look back, when historians look back is how quickly we were able to pivot to the production of therapeutics and developing new technologies, diagnostics, new kinds of diagnostics, point-of-care diagnostics, home diagnostics, the advent of a whole new field of home diagnostics, the ability to develop and scale the production of a vaccine in record time, really the ability to come up with technological solutions. When you look back at the pandemic planning that was done in -- back in the sort of 2003-2005 time frame, it contemplated implementing various kinds of measures to control the spread of a novel pathogen. Back then, we were worried by H5N1 flu. But all the planning baked in assumptions that you wouldn't be able to develop therapeutics in a very timely way, even against a flu strain, where we had a lot of experience. And I think the fact that we've been able to come up with platforms that allow us to do that is really going to be one of the stories that emerges from this about how we think about future pandemic planning and the ability to pivot with new technologies to try to confront it so quickly. And what allowed that was the advent of fully synthetic modalities for coming up with vaccine constructs and molecular diagnostics and drug constructs. We went from an age when we were largely dependent upon culturing the virus and growing it up in large vats to being able to develop vaccine constructs based on the sequence strain alone using recombinant technology, using mRNA technology and allowed us to come up with constructs very quickly. And I think we've sort of crossed a technological threshold, if you will, with the advent of fully synthetically derived therapeutic that's countermeasures to novel pathogens. If this is 5 years ago, we would have never been able to adapt this technology. If it was probably 3 years from now, this technology might have been more mainstream. We were right at that technological inflection point. I think where we stumbled and where we were challenged is in scaling this up and scaling it out very quickly. I think what we found was we just didn't have the reserve capacity. We didn't have sort of a hot base of preparedness where you could quickly pivot manufacturing sites to the production of novel therapeutics, novel diagnostics where you could scale out testing on a massive scale. There wasn't any -- there wasn't a lot of reserve capacity, enough reserve capacity in both manufacturing as well as distribution as well as diagnostic testing sites, and we just didn't make those preparations. That needed to be kept hot somewhere. The old idea was you have a warm base, so you build out facilities and you mothball them. We tried to do that in this instance. We tried to adapt some of those facilities in this instance. It didn't work. And we found that if you don't keep some of these capabilities hot, if they're not constantly operating, they're not going to be ready when you need them. And so we need to think differently about how we build out that hot base of preparedness for the future. Because that really is where I think the biggest challenge was being able to scale it out and scale it up very quickly and come up with the capacities that we needed.

So there'll be some lessons learned. I want to touch on some of them today as I go through the discussion with each of you. But I thought I'd start by just turning to you, George and ask, where do you think we are with the Delta variant? What other things are you looking at? What do you think the sort of evolution of this is going to be. Trevor Bedford and some others think that as this virus continues to mutate, it's likely they mutate within the Delta lineage. Any new variants that really threaten us are likely to be within the lineage of Delta. Is that what you're seeing? And how do you think this is going to play over the next 12 months?

Yes. Well, with the caveat that nobody has a crystal ball. I say that it's no surprise that all the variants are emerging, right? So the neurotropic virus new in the human population. And over time, it will adapt and get better and more efficient at affecting humans and making more of itself.And that's what we're seeing now. Delta is the latest iteration. But all of these variants have arisen basically without selection pressure from a large number of people being vaccinated. And so what we're going to -- I think what we're likely to see now, given the increasing numbers of vaccinated people, are variants that are more likely or likely be less well controlled by the vaccines. Delta maybe looks somewhat less well controlled. Mu, which is coming, is potentially even less well controlled. Any subsequent strain that takes over from Delta will have to be more fit and replicate more quickly than Delta. That's a high bar. It's incredibly infectious, incredibly. So I think that leads to the view that future variants will be derivatives of Delta. On the other hand, every infected person is a laboratory for the -- where the virus can do billions of different experiments to get different combinations of mutations to see if any of them are more fit. The mutations are not only in the spike protein. The ones we read about are in the spike. But there are other genes in COVID that are equally important and the ability to evade innate immunity also may be contributing to the variants. So I'm sure we're going to see continued variants. It's important, I think, to have both vaccines and drugs that are -- continue to be effective in the face of the variants. There are regions of most viruses, certainly COVID, other coronaviruses, flu that are relatively invariant that are may be essential for the virus to maintain. Those regions are not immunodominant. Selection pressure over time has caused those regions to be hidden or buried in a way. So what you see with the antibodies induced by the vaccines for monoclonals is most of them do not hit those regions. They hit the hypervariable regions of the virus that are immunodominant. So I think one solution to that and our approach for that has been to find antibodies both for COVID, but also flu and coronavirus in general that bind to epitopes that are relatively invariant right? And so sotrovimab, which is our antibody, binds to one such region that is common to COVID and SARS and a whole family of coronavirus. It's not pan-coronavirus, but it neutralizes a large number of coronaviruses. We deliberately looked in SARS patients to find these antibodies with the rationale that any epitope that was conserved between SARS and COVID could have these properties. So far, that's proven through. A single antibody maintains activity against all of the variants. We test them all as they arise. We've tested Mu recently, maintained activity there as well. So I think there are ways to control variants and with reagents that are broad enough to go beyond COVID to cover coronaviruses. We have additional antibodies coming forward now that are even broader than sotrovimab, the antibody that looks to be pretty close to pan-coronavirus in its activity. So it inhibits not only SARS and COVID, but MERS as well, which is a rather distantly related coronavirus, as well as some of the COVID coronaviruses. So in terms of the next pandemic, having molecules like those at the ready, it can be manufactured, it can be stored in bulk, it can be put in vials and distributed in a couple of weeks, I think, is one approach that one could consider for being prepared for the next coronavirus outbreak or flu outbreak or pick your virus. And so the variants are going to continue. I don't think we're done with Delta, and we need to be ready.

I want to turn to Bill. You're working on a vaccine in this space. And John, just get your thoughts on how you think things are going to evolve just to level set us in terms of some of the concerns you see on the horizon and the ability to continue to target this virus as it evolves with adaptations to the vaccines that are being worked on. Anyone else wants to sort of chime in with just some level setting on the outlook?

Yes, certainly. Let me jump in there, Scott. Thanks for the question. I think we're fighting the battle on multiple fronts around the globe, right? This is -- we talk a lot about the U.S. because we tend to be a little bit U.S.-centric. But the reality is that we're at different stages along the way of initial regimen of the -- whether that's the first 2 doses or the first dose from J&J, for example. And we watch as vaccination rates in certain countries are better than others. So I think that there's still a progression of events that has to take place for the first regimen of vaccinations. But there's still many countries around the globe that still are just entering that phase of vaccination. And then we obviously then need to think about boosting strategies around use of the original vaccine before we even talk about variant strain vaccines, which we were just speaking about. And whether within that boost strategy, it's a homologous boost or the same vaccine or we're going to make and adapt to heterologous boosting strategies, which we believe there's some benefit to then using a protein-based vaccine like ours with an mRNA vaccine, might produce a more robust immune response. And then what that duration of protection is, whether we're going to do a 6-month boost or an 8-month boost, I think the data is still coming in. We've heard Pfizer talk about the need for 6-month boosting. We're supportive of that. And then is it going to be another 6 months after that or a year, is it going to be an annual vaccination or we're going to need to do strain changes, similar to flu. So we're learning every day and every week about the epidemiology of this virus and what we're going to need to do on either a country-by-country basis or a global basis in order to continue to protect people from what will likely be a pandemic that will easily continue into '22 and likely into '23 and then yet to be determined what happens after that. There's a lot of -- it's a very dynamic situation. We're having conversations across the board. We are engaged with the COVAX Facility from a low and middle income perspective in order to provide doses that are underserved at the moment. But we're also engaged with European Commission, with the U.K., with the U.S., Australia, Canada. And those conversations are critically important as well. So a variety of responses need to be dealt with. Policy suddenly becomes very important. ACIP opining on what that looks like in the U.S., the other NITAGs around the globe are going to have input there as well. So it's a developing story and one that we're keeping a very close watch on.

Do you think after you've done the first round of vaccinations or after you have a population that's been exposed to the virus or exposed to the vaccine has developed some baseline immunity that you could move to multivalent vaccines using smaller amounts of, in your case, protein and the mRNA -- in the case of the mRNA vaccines, mRNA. So you can get as -- get a multivalent vaccine where you're using basically the same top dose, but now you have multiple components? Because it takes a smaller amount to stimulate immune response after you have an exposed person.

Yes, absolutely. We're looking at all of those combinations, right, whether or not it's a bivalent with a half dose of each or it's a half dose of just 1, because we're seeing really nice protection already now. We don't have the data on Delta variant yet, but we're accumulating that data as we go to determine what the right dose is. Certainly, a half dose is going to create more dose availability. We get into dose sparing at that point. But these are all combinations of things that we're continuously looking at and monitoring.

Bill, do you want to...

Yes. Just to weigh in on that point, I think this is still early in the story, Scott, as you know. We're still gathering a lot of the information and data as we move these things forward and some of the strategies that John was talking about. Clearly applicable not just in the mRNA or protein, but also in the viral-based approaches where we've shown that we can move just as rapidly as RNA technologies, we can incorporate pretty large payloads, so we can incorporate multiple antigens. We've done that across multiple programs now. And so I think what's going to be interesting is when you start looking at duration of immunity, which vaccines may have a longer duration of immunity and how much do T cells come into play in that as far as the memory responses go either on the B cell or the T cell side. And so there's a lot of unknowns here that we're still working through. But I anticipate if I'm looking into my crystal ball that George talked about that this is going to be an ongoing issue, and we're going to have annual vaccinations at least. And I think it will be kind of like flu. And every year, you'll have a new variant that you're dealing with. And unfortunately, it's not just coronaviruses that are the issue, right? So we've had more and more outbreaks of emerging infectious diseases over time, and that's going to continue. And so this is a good preparation for the next one as well.

I mean the challenge here with -- in -- that's distinctive flu is that we don't know what the dominant strain is going to be. If we believe that the new -- the next variant that ends up spreading is going to be within the Delta lineage, then conceivably, you can use a Delta backbone in a new variant vaccine and probably provide better coverage against anything that emerges in the Delta lineage that would have partial escape. But we don't know the answer to that question. So you kind of want to move to a platform like you have with flu, where you can have multivalent vaccines. But that's obviously more challenging in this space. At least in the mRNA construct, you're limited by how much mRNA can deliver. Protein affords certain flexibilities. Do you think you can also achieve that with a viral vector, that you can get multiple antigens into the same construct and actually develop a multivalent vaccine in that -- with that technology?

Absolutely. We're doing that now with other programs and within our therapeutic programs.

Scott, maybe I can make a comment on that because that approach of chasing variants is -- I mean it's important, absolutely. But the alternative approach and the antibodies, for example, that we have that recognize such conserved epitopes and could be truly pan are epitopes that could be elicited or, let's say, T cells, antibodies to those epitopes could be elicited by the right vaccine. And then if that were possible, then you don't have to chase the variants. You would have a truly pan vaccine. We're working on that with COVID together with GSK. We've identified the relevant epitopes. We make the vaccine to see if we can induce the right types of antibodies, which I think is an alternative approach to covering potential variants that emerge in the future.

Do you think all platforms are amenable to that? Or some of those regions are going to be difficult to elicit an immune response to? It's sort of...

Well, the regions are not immunodominant, right? They're hidden. They're not out waving in the breeze and easy for the immune system to see. But the question is can you create a synthetic construct that has that epitope in a more accessible position so that it's easier to generate an immunity against it. And so we'll see. It's a work in progress. But I think that is an approach also that merits moving forward, which is obviously why we're doing it.

Yes. Just a quick follow-on concept. I think the comment that I think that, that applies to the vaccines as well. Looking at recombinant protein nanoparticle in combination with an adjuvant, such as ours, is providing some of that broader coverage as well across the different variants. So we're looking at both strategies, right? If the variant is such a change that requires a new strain, we're prepared to do that. But then you look at the practicality of strain changes and how frequently it's mutating and then what happens country-by-country, it becomes a difficult problem to solve for. So we're hopeful that we can solve it without the strain change, but are prepared to do that if we have to.

I wonder if I might just offer a perspective here. And perhaps this is at the risk of injecting a bolus dose of reality. So I think George had mentioned that we're likely to see variant emergence primarily from unvaccinated populations. We need to look at this from a global perspective. The vast majority of the globe is unvaccinated and is likely to remain so for quite some time, if not forever. The virus doesn't carry a passport. So if the majority of globe is unvaccinated, how do we tackle that? Boosters, absolutely vaccines are the first line of defense, and boosters could augment that. But we have just shy of 1/3 of this country with nothing to boost because they have either chosen to or are not suitable for vaccination or can't access vaccination or there's some other reason why they have chosen not to be vaccinated. So the metaphor I might offer is there's a bunch of people drowning in the ocean. Some of them have life jackets. In fact, some of them have 2 life jackets, and they may be fortunate to receive 3 life jackets with the booster. But the majority of people are drowning. They don't even have 1 life jacket. Part of the issue I think we're wrestling with is, over time, some of those life jackets will melt. And the people who are unvaccinated or drowning are going to pile on to the people that have life jackets and potentially pull them under. So I think to some of your introductory comments, Scott, we are just not prepared. And I don't know how long it will take to be able to tackle this from a global perspective.

Yes. Look, I'll just -- Ute, please.

Yes. So I really like the discussion aspect here, right, because that's what we actually have to deal since the pandemic started and really see how all of these things develop in all of the individual countries and monitor that also very closely. I think that was for us one of the biggest challenges that we had, the development really of the pandemic and how all of that goes also now with the vaccination piece in all of the different countries, right? So there's a constant -- we see constant changes just depending on what country we are looking into.

Look, just to pick up on that point, Cameron, I'll turn to George and John for a perspective on the global situation as well and Bill and others. This is quickly going to become a distribution issue and not a supply issue. I think the WHO is going to talk about it being a supply issue as long as they can. Because as long as it's a supply issue, it's the fault of Western countries and the Western manufacturers. Once it becomes a distribution issue, it's going to be the fault of WHO for not putting in place the support in countries to actually get the vaccine distributed. But the bottom line is that we are quickly going to be hitting an inflection point where there is going to be an embarrassing surplus of vaccine, and we're not even going to be able to give it away fast enough. We're not going to be able to distribute it quickly enough. If you just do the math, we've already distributed about 5 billion doses. China is going to vaccinate China with their vaccines. They've made that very clear. Russia is going to vaccinate Russia with their vaccines. That's almost 2 billion people right there, at least 1.5 billion people. We've largely vaccinated most of the west. Obviously, there's vaccine holdouts, both in Europe and the U.S. But we've largely vaccinated our populations. Over the next 12 months, Pfizer said publicly that they're going to manufacture 4 billion doses. I think Moderna has committed to 3 billion. Novavax is going to enter the market and be able to produce at scale. Sanofi will probably enter the market. AstraZeneca is producing billions of doses. J&J is going to be producing billions of doses as they get up to scale. You have the Serum Institute in India that's going to be producing billions of doses. Rough estimates, we're going to have at least 15 billion doses of vaccines. And we're going to have to -- we're going to be focused on vaccinating probably maybe 3 billion people -- 2 billion people. We've largely -- China and Russia largely vaccinate. The West and will largely be vaccinated. The global population is 7.5 billion people. This is going to be a challenge of getting vaccine at the hard-to-reach areas and dealing with the issues of vaccine resistance in countries where you're trying to distribute a western vaccine in countries where there's going to be resistance to taking it. We saw how hard it was with the polio eradication and other global vaccine efforts. So I think that there's been very little attention to that and very little effort paid to that today. USAID, which should be responsible for trying to put in capacity on the ground in hard-to-reach places, is not doing it. WHO is not doing it. Everyone is having a conversation about supply. In 6 months, we're going to have a surplus of supply, at least by my estimates. I'll just throw that out there. And John and Steve, what are your thoughts are. I know you're sort of in the middle of this, too.

Yes. Yes. Boy, I'd love to parse that out a bit because I think that there's some really important premises here that we need to make sure we understand. One is I'm not sure that I'm yet convinced that there's going to be oversupply in the market. I think we're going to continue to be in a position where demand, depending upon vaccination rate assumptions, depending upon booster frequency assumptions, I think we might find ourselves still being in demand outpacing supply 12, 18, 24 months from now. However, I do agree that there is a logistical challenge in distribution as well, which is trying to resolve on a country-by-country basis where they have infrastructure to support it, but also where there's an absence of infrastructure, Africa, other low and middle-income countries. We're relying upon the Gavi, UNICEF network, which has been predominantly used for pediatric vaccines to help with the distribution of vaccines around the globe. So we're tapping into those available opportunities, but it is going to be a struggle. We've never seen anything like this ever before. We had talked about doing some planning for a flu pandemic. The system was never tested and challenged, and we're testing and challenging the system now to be able to do that. Surprisingly, though, we're seeing it effectively being rolled out where there is product available and where it is being distributed, we're seeing that happening. But yes, there's a lot more to go. I don't believe yet that where -- the U.S. at this point is 53% to 55%, and we're claiming victory. Boy, there's 40% to 45% of the population that's still not vaccinated. So I think that there's a long way to go, and we haven't yet factored in booster.

Yes. No, the point is well taken. I mean, the boosters change the equation in the West. I think we'll continue to chip away at the vaccine holdouts, but I'm not sure that there's going to be a dramatic acceleration. We vaccinated 75% with at least 1 dose, 75% of adults over the age of 18. We'll probably get to 80% on our current trajectory, maybe we get to 85%. I think it's going to be hard to really see ourselves getting above that. Obviously, when the child vaccine gets authorized, that's going to open up a new market, but that's a lower dose. And so the supply can get stretched when you're going down to the 12 and under or 11 and under. Just want to pull Dwight into this discussion a little bit, and then maybe we can sort of pivot back to this question because it's controversial on whether this is a supply or distribution issue, where that balance is. But Dwight, think one of the things that we should take away from the experience that we've had is how important diagnostics are in the setting of a pandemic, in the setting of a public health emergency and how important having early access and early distribution diagnostic testing is. I mean the central sort of failing at the outset of this pandemic was the fact that we couldn't develop a diagnostic test, get it to scale and be able to turn over the positive cases and use case-based interventions of tracking, tracing, testing as a way to try to control the introduction of virus into the U.S. So by the time we actually were able to diagnose the virus and had testing deployed, we were heavily ceded. We were in the throes of a pandemic. And it's not to say that we could have prevented the pandemic with effective testing that was deployed widely, but we certainly could have slowed the onset of the epidemic here in the U.S. and maybe reduced its peak if we had access to more widespread testing and could have relied more on case-based interventions. And the other thing that we could have done is not only could we have known where the virus was, but we could have been able to identify where the virus wasn't. And if you remember back to those original days when President announced that 15 Days to Slow the Spread, which was followed by another 30 days of effectively a national shutdown, some parts of the country like New York and Boston, Louisiana were heavily ceded, clearly needed to do population-wide mitigation in order to keep their health care systems intact. But there were other parts of the country where the virus really wasn't spreading that widely. I mean Austin, Jacksonville, Florida, but we ended up shutting down the whole country because we not only didn't really know where the virus was, we didn't know where it wasn't. We didn't have enough diagnostic testing to say, you know what, there's not a lot of virus right now in Austin. We can still rely on case-based interventions of testing and tracing and tracking. We don't have to reach for population-wide mitigation. And the cost of that was that by the time the epidemic did roll around to those parts of the country and we had that big wave of infection in the summer in the south, a lot of those states, the people there, the governors said, we're not shutting down again. We've already shut down once. We didn't -- we shut down when we didn't have to, and we're done with shutdowns. And so when you did actually needed to deploy the mitigation, you had already spent the political capital to actually adopt it. So it just underscores how important diagnostic testing is. So the question I want to put to you and just get your thoughts more broadly on this is what could we do differently going forward to make sure that we have that testing in place in the setting of a public health emergency, particularly one that has the potential to gallop out of control like this one did.

Thank you for letting me interject the diagnostics side into this very robust discussion about vaccination, and I've really enjoyed the discussion, by the way. Look, we believe that -- and I haven't heard anybody put it any better than you did, Dr. Gottlieb, 2 or 3 weeks ago on Sunday morning when you said, we need to operationalize testing. And our view is that the way that testing is going to be done, the how and the where is going to change very much in the next round of this and as we go forward. And that's what we've spent our time in and -- time on in the last 18 months. So we've developed, for instance, this little box, if you can see it, it's about 4.5 inches square. It is a PCR device. It's very inexpensive, about $300. And it provides fast, accurate PCR results in less than 30 minutes in an at-home and a point-of-care setting. So a person puts a saliva sample into a little cartridge like this, puts it into the box. It's then run by a cell phone and the results are given over the cellphone. So it enables us to have testing on a bathroom counter that enables testing at schools, in offices, not just on cruise ships, but in every cabin of a cruise ship because it's so inexpensive, not just in a hotel, but in every room of a hotel. So for instance, when you check into a cruise line, you may be told in your cabin, there's a little box and there are 3 cartridges for every one of the passengers. They have a ticket. And you'll test within 12 hours of getting on the ship, you'll test halfway through the cruise, and you'll test when you get out on disembarkation heading for an airline with a cell phone certified PCR test to travel. That's the way we think testing is going to be done to give the individuals the power to know what their COVID status is and individuals have to take some personal responsibility for this. And so it's the how and where this is going to be done. Everybody wants 3 things from a diagnostic test, especially COVID. They want it to be cheat, fast and accurate. And that's what we've endeavored to do with this. We engage scientists that have developed the LightCycler for Roche, the rapid system for the U.S. government, the FilmArray system for BioFire. That's the kind of team that we assembled to put together this great device. And I have to tell you and make sure everybody understands this is subject to FDA review and is not currently for sale. But it's what we're currently validating and getting ready to go into FDA submission.

And my next question was going to be, where can I get one. And I just want to sort of test a statement on you. I think that you're at the intersection of 2 secular trends. And I'll ask you whether you agree and then how is this going to play out. One secular trend is that we've seen a cultural change in people's expectation about how they get medical care. I have 3 young children. If my wife had called the pediatrician and said, my daughter has a sore throat, if the pediatrician said, let's get on Zoom, I'll mail you, we'll -- I'll send you over by DoorDash a diagnostic kit, we'll get on Zoom, we'll do a virtual visit and test her in home. If that had been said to my wife a year ago, she would have come to me and said, why does my pediatrician want to see me, why aren't they letting us come into the office and get a visit. Now if the pediatrician says, please come in the office, her response will be, why can't we do it over the phone, can we try a televisit first, can we test the child at home? So the expectation, the culture of how we want to get care delivered, I think, has changed. And there's going to be a lot that we want to disintermediate from having to go into a brick-and-mortar facility. The other secular trend I see is that historically, there was always an aversion inside the FDA, inside the regulatory process to putting diagnostic tools in the hands of patients that would turn over a result that you wouldn't have any ability to make sure the patient acted appropriately based on that result. You didn't want someone -- early on, we had a big debate about should we license HIV testing at home. This goes back more than 15 years. I remember last time I was at FDA with Dr. McClellan because people were concerned about people getting the diagnosis and not necessarily getting into appropriate care or not being able to deal with the emotional aspects of receiving that diagnosis in the home, even though it would have potentiated more diagnosis. And the idea was to get people diagnosed, that they're aware of their infection. Same thing here. There was a vigorous debate early on about making COVID testing accessible in the home and how are we going to ensure that the result got reported and there was adequate follow-up with public health authorities. And then FDA kind of said, no, we're going to get -- we're comfortable with this now. We're not going to require -- we're not going to put in place onerous requirements that the technology has to report the result. We're going to urge the patient to do it, but we're not going to make it the approval of the authorization dependent upon that. And those 2 secular trends, I think, are both colliding to change this entire category that you're in and move testing much more to the consumer to the home. That's going to affect multiple fields. I just want to sort of throw that out there and get your reaction to it because maybe my thesis is wrong.

No, Dr. Gottlieb, I think your thesis is right on. And I think from the telemedicine emphasis to the at-home, Dr. Fauci recently opined that -- in answer to when is this going to be available at home, he said, hopefully, sooner than later. And I have to give kudos, I think, to the U.S. government and the FDA, the CDC and NIH and Health and Human Services. I think they've shown a remarkable ability to pivot and adapt through this. We -- as a manufacturer and a developer of diagnostic test for COVID, we lived every day of that adaptation. And it was -- they were tremendously responsive. And I think that they'll continue to hopefully be that responsive as we take these new products that are very high-grade technological products into the home, into the schools, into the businesses, into the restaurants and create this whole new paradigm of testing. I think you're right on it.

I think -- I just want to pick up on one of the points you made because I think there's been so much focus on the vaccine regulatory process that there hasn't been as much awareness of what's going on with the regulatory process as it relates to the market authorization of diagnostic tests. And what CDRH accomplished in the setting of this pandemic and the speed by which they accomplished it and really changed the sort of policy platform, which they were operating, for example, opening up this category of home diagnostics for infectious diseases, which really didn't exist before, and changing their whole philosophy around that in the setting of a crisis, I think, was remarkable. And I think it's one of the sort of unrecognized or under-recognized untold stories of regulatory innovation, adaptation to crisis. I get into this in a lot of detail in my book. Sorry, Michael, I hope and not an inappropriate product promotion. What was going on in CDRH? Anyone else want to comment? I want to turn to Ute to just talk a little bit about some of the challenges we faced in the clinical trial enterprise. But anybody else want to comment on it? George, I see you nodding your head. So I don't want to put you on the spot, but...

No, look, I -- the -- it's interesting because I have a cold, right? And so went to that last night, I started to get some symptoms. And of course, I don't know how I would get a cold, given the social isolation and everything. But I went this morning, had a test, right? And I drive to a testing center, a swab, I drove home. It's fast. Basically, 20 minutes after I got home, the result is negative, right? So that's all good. But that's not nearly as good as just going into the bathroom and spitting into a thing and getting a PCR result, especially if that PCR result has been usable, reliable and people can count on it. I think that would be huge. Look, I think the delivery of -- a lot of this ties together. When you talk about distribution as an issue, it is an issue, especially for a vaccine that has to be stored at minus 80. That's not going to be distributed in South Saharan Africa, right? That's just not feasible. And so there are limitations that go beyond how many doses have been manufactured that I think are increasingly going to play an issue. Application of the antibody is limited because they're intravenous, right? They're IV. And so developing more convenient administration, whether it's subcu or IM so that you don't have to be in an infusion center. You can't do it at home, but you might do it in a doctor's office or a drug store and to get treated. I think the more convenient we can make both testing and therapy, obviously, the better off we'll all be.

Cameron, you and I were talking before we started today about clinical trial enterprise. And I want to ask Ute about that, some of the challenges and opportunities that come out of this pandemic, some of the lessons learned about trying to conduct clinical trials in a setting of a public health crisis of this magnitude. But I thought maybe I would just like kick it back to you to set us up for that because I think the way you were framing it was pretty good.

Yes. Thanks, Scott. So Humanigen received communication from FDA on Wednesday, and you can read the press release. But they declined emergency use authorization for lenzilumab for hospitalized hypoxic COVID patients this time around. So we see this as round 1 of a longer process. We're encouraged that they appear to have noticed that there are efficacy signals. And there are certainly those no safety issues that we're aware of. But I think the heart of the matter, Scott, is that we had a 520-patient study, which we thought was sufficient. But it appears that we're looking for larger studies. And we will furnish more data through the NIH-sponsored ACTIV-5 study, which is also looking at lenzilumab. But it brings me to a commentary that you wrote recently, Scott, in JAMA, where I think you were calling for a national system to conduct clinical trials more efficiently the next time the U.S. faces a public health crisis. Well, I think this coming winter is going to be our next time. We probably underestimated our ability to outwit this virus. It appears to be the other way around. And we obviously believe that it's important to have varying agnostic approaches in the shape of therapeutics. And I think George would certainly agree with that. But to get to the point, we think that the U.K. has set a very good example for what's possible with the RECOVERY study. So I would ask you, Scott, why is it that the U.S. is not able to organize these large-scale trials that are able to demonstrate data in meaningful numbers of patients. And we know Janet Woodcock has talked about platform studies. And I think ACTIV is one example of that type of study. But why we've just not been able to grapple and deliver on something that the Brits have been able to?

I'm going to offer a few thoughts, but I want to turn to Ute. Obviously, she's very much in the middle of this. Look, we didn't participate in RECOVERY. I agree with you, RECOVERY was a historic achievement. And a lot of the most important clinical questions early on came out of the RECOVERY trial. I mean the results around the impact of dexamethasone in treatment of patients who were requiring oxygen came out of that study. The definitive data were on hydroxychloroquine and convalescent plasma came out of that study. But the U.S. didn't participate in RECOVERY because we deemed it insufficiently rigorous. And we would look at a study like that. And we would say, well, how could you study the effects of dexamethasone in the treatment of COVID and not track glucose levels? And the British said, we know glucose levels are going to go up. It's not important to track that. What's important is to track the 5 or 10 variables that are going to help inform whether or not the drug is having a treatment effect because in the setting of a crisis, if you want to enroll this quickly and get a result in a timely fashion, you can't ask doctors to input 200 variables. You've got to figure out what are the most important 10 or 20 variables that could be handled within a setting where you're delivering crisis levels of care. And we would have said it needed to be randomized and placebo-controlled and recovery randomized to different active therapy, so it's easier to get patients to consent in enrolling in a trial like that. In the U.S. by contrast...

And RECOVERY was also open label. So I don't think you're using RECOVERY by way of example of a large-scale study where there are multiple constituents that are part of that. So I'm sure you want Ute to comment, but you pointed out we, in the U.S., need to do these large-scale rigorous studies.

That's right. We need to...

It is one of the benefits of having a centralized health care system. I mean U.K. can administer and track, and they've done a very good job in the U.K. of implementing that and with these large-scale studies and follow-ups as well. So it's one of the benefits of not having a distributed health care system that we have in the U.S., obviously, as a U.K. company in the middle of all that.

Yes. I mean when I talked about in the piece that Cameron generously referenced was the -- having an authority -- NIH and FDA having the authority to bias enrollment towards clinical trials that are going to lead to definitive evidence, yield a definitive result. We ended up enrolling literally hundreds of studies on hydroxychloroquine when really we only needed one. And we had -- [ Jim ] talks about hundreds of studies that were done that were never going to yield a definitive answer because they weren't designed rigorously, to Cameron's point. So I think that we also need to understand that in the setting of a crisis, patients are scarce, the time of physicians is scarce, and we need to prioritize those studies with the most promising therapeutics that are designed in a way that they're going to yield a definitive result that's going to answer an important question. But Ute, I want to get you in this conversation. You're in the middle of this. Where do we go wrong and where could we go right?

Yes. I mean, so first of all, when the pandemic came, it changed how we do clinical trials basically from one day to the other. And you made -- before I go to the different things that we need to implement moving forward, I think you made a really important point about data points that we should collect. Because I think what we did before the pandemic sometimes was really looking, I mean, what kind of data can we collect. And we collected significantly more data than we potentially need. Also from a visit perspective, I mean, from all of these different aspects. So the pandemic really gives us an opportunity to look into study designs and identify from a data perspective as well as from a visit perspective, from an assessment perspective that we need to think very, very careful what we actually need to answer the question that we want to try to achieve. So because -- I think that we overloaded sometimes clinical trials and overloaded patients in terms of the burden on sites. So I think there's a lot that we can learn on that aspect from the pandemic, and we need to implement that moving forward. I mean there will be disruptions again. I think the discussion that we had today is going absolutely in that direction, and there will be other viruses. So the way we do clinical trials will not be the same moving forward as it was in the past. And it was long overdue because we did for decades clinical trials in the same way, and we're hesitant to really implement changes also from a technical perspective. So when you think about what we haven't actually achieved before the pandemic and what we have been able to achieve during the pandemic in terms of how we can collect data remotely, how we can implement certain technologies, how we look at clinical trials if there is any possibility of decentralization, complete virtual trial. I mean there are -- from lead virtual trial or decentralized trials are not an option for all therapeutic areas or for all clinical trials. But there might be an aspect in nearly all of the trials that we do where we can do some decentralization or where we can really collect data at home or can use certain technologies to collect those data. And I believe that's a really important point. And we -- I mean we, as an organization, I'd tell you, I mean, we started significantly before the pandemic started and built really mobile platforms and technologies and had discussions with companies about it. But there was really hesitancy to implement those technologies because we just felt uncomfortable to do things differently than they have done it in the last years.

Michael, I think you had a question. George, I'm going to -- we're going to be wrapping up. And George, I'm going to turn it back to you and John to see if you have any closing thoughts since you opened up. Thank you, Ute, for those comments. Michael, I think you had a follow-up question or a question you wanted to ask, and then I'll turn back to George and John.

Sure. Thank you, Scott. And I think the question goes really to all of the panel members and to you as well, Scott. And it's a corollary to a number of the comments that each of the panelists have made. And so my question is correlates or serology as endpoints as compared to hard efficacy endpoints. So of course, we've had companies like Pfizer and Moderna, J&J, Zeneca, Novavax, others running 40,000, 50,000, 60,000 patient efficacy trials. And where do, to the panel members, all including Dwight on the diagnostic side, of course -- where do correlates come into play? Will we ultimately, from a regulatory perspective, get to the point where we can rely on serology, tighter outcomes? And then maybe to Bill's comment earlier, what does that mean both for humeral but also cellular immunity based on T cell? Sorry, Scott.

Ute, do you want to take a crack at that? Or should I turn it back to John and some of the vaccine developers because you're seeing everything? So you might have a good perspective.

Maybe I'll just jump in, Scott, real quick because I think strategic partnering is critically important here, right? And Michael, thanks for teeing that up. I mean we ran a 15,000 subject trial in the U.K., turned around a few months later, ran a 30,000 trial subject in the U.S. with ICON, by the way, and thank you for your support there. So I think clinical operations internal of the organization is critically important and the experience there. But then being able to tap into an experienced organization like ICON to run a 30,000 subject trial in a very, very short period of time, an efficacy trial, multiple blood draws, multiple periods of time over which you have to evaluate thousands and millions of pieces of data, if you will, is important. But you got -- we ran the trial -- our PREVENT-19 Phase III trial in the U.S. was obviously a huge success from an efficacy standpoint, but a huge success from an execution standpoint. And we can't lose sight of the ability to do that and having strategic partners to rely on in order to accomplish that.

Yes, I'll jump in as well. So on that point, I think there's still progress to be made on the regulatory front, Michael, if we've got to use serology and some of these things. Because it's very difficult to get accurate correlative protection, for instance, from serology. You need pretty large databases of people who get the disease even after being vaccinated. And so it's a large amount of work to get those true correlates. Obviously, we use correlates that aren't totally true correlates in flu, and we've done that for years and years. So it depends on the confidence you have in the correlates that you're using. And so it's going to be -- I think that would be an interesting evolution, and a lot of that's going to be driven by the science and regulatory risk that, that entails?

Ute, do you have a thought you want to share on that?

Yes. I believe we just need an open mindset, right, and challenge ourselves with -- we saw things in the last 18 months that we had never thought we can do in terms of how many patients we can enroll in a very short time frame and bringing drugs to the market. So there's certainly an ability that we can do that. So I think we need to constantly really challenge ourselves in finding out what we can do we can do better.

Scott, if I may, just one more quick point. I think an interesting issue popped up with all of the trials that we did where we had people volunteering for these trials in a pandemic situation. A great -- some maybe perceived risk or doing it for the right reason and the right cause. And then we had a significant challenge in getting the health authorities to recognize, in fact, that these people have been vaccinated. And while it was ultimately not up to us to make the decision, the U.K. and the U.S. finally have come around after months and months of being able to allow those people to claim that they have been vaccinated in a successful clinical trial. And I think if we want people to participate in clinical trials in the future, we need to recognize the value of their contribution.

Great point. George, I want to just close out with you. Any parting thoughts. I'll just sort of inject a little anecdote. You talked about your use case and diagnostic testing. I'll talk about another use case that I think Dwight is going to like. This morning, I tested 2 of my daughters. They're going to be going to a small party congregate setting outdoors. So it's a safe environment, but the parents all agreed that they would test their children before they entered this congregate setting. And I actually -- I usually test with the BinaxNOW. I -- this morning, I used some Lucira tests because the parent actually requested a PCR test. So I assume the molecular test was substitutable. So I used the Lucira test, which as you know is a molecular test. So not only are people using testing to diagnose infection, but I think they're using it very -- starting to use it very intelligently, to your point about using it in settings of a hotel or a ship to try to keep infection out of a vulnerable setting. So I think that the use cases for diagnostic testing are just going to change dramatically. And the sophistication of people in terms of how they deploy tests, I think, is -- we've all gotten a real education in an antigen-based test and a molecular test and the distinctions and where the best test can be fitted to the right purpose. And so the whole -- this whole field has changed dramatically as a result of the pandemic. George, any parting thoughts from you?

Yes. Thank you, Scott. First of all, thank you for hosting this. So it's a great session. So not surprisingly, but thank you for doing it. Look, just a couple of quick things on the biomarkers. Before biomarkers get reliable enough and easy enough to use as a regulatory end point, they can provide useful information to companies, right? So if you're trying to reduce something that occurs at a 6% to 8% level, you have to have a certain size of a trial to show that you reduce that. If you have a biomarker that can identify a population, which has that at 30% or 40%, then you can do a much smaller, faster trial to -- not for regulatory purposes, but just to tell you as a company whether your approach is likely to work or not. And so I think there are biomarkers like that, that exist now for therapeutics. And then we have transcriptomic-based analysis that predict pretty much accurately which patients with COVID are going to have a bad outcome and a good outcome. Too complicated to be used as diagnostics at the moment, but maybe if we understand them better, we can develop in that road. But I guess the final point I'd like to make is the virus is going to continue to evolve. I know because there is no question about that, whether it's derivatives of Delta or something else that just surprises us. It is good that we can make vaccines so quickly. We can make boosters, that we can make different vaccines that will treat the variants. I think it's not a losing battle, but it's tough to be chasing the variants, and you're always behind the 8 ball. By definition, you can't develop the next therapeutic that covers them until you know about them and they've already spread enough to be detected. Because actually still a very small fraction of all COVID tests are sequenced, COVID infection. So I think the way to get ahead of this is to develop reagents, both drugs and vaccines, that are virtually variant-proof. That's a higher bar. It's a little harder -- it's not an alternative to the current approaches, but it's something that I think we have to do if we're ultimately going to get ahead of this.

Michael, parting thoughts? Back to you.

I just -- I would just like to thank you, Scott, my friend and wonderful moderator and I think on behalf of the country, maybe even the globe, your service in public health as well. So it's been a joy to have you moderate today. And I want to thank all of the panel members for your participation insights and your importance to making the Global Investment Conference what it is. So thank you all, and I wish you Godspeed with the work that you're doing, the very important work that you're doing. So thank you.