Vaxcyte, Inc. (PCVX) Earnings Call Transcript & Summary

Good morning. My name is Ashley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vaxcyte VAX-31 Phase I/II Adult Study Results Conference Call. [Operator Instructions] I will now turn the call over to Andrew Guggenheim, President and Chief Financial Officer of Vaxcyte. Please go ahead, sir.

Thank you, operator, and good morning, everyone. I'd like to welcome you to Vaxcyte's conference call to discuss top line data from the Phase I/II study, evaluating the safety, tolerability and immunogenicity of VAX-31, our investigational 31-valent pneumococcal conjugate vaccine or PCV, designed to prevent invasive pneumococcal disease, or IPD, in healthy adults aged 50 and older. I am joined today by our Chief Executive Officer, Grant Pickering; and our Chief Operating Officer, Jim Wassil. Earlier this morning, we issued a press release announcing these data results. Copies of this and our other press releases, latest corporate presentation and SEC filings can be found in the Investors and Media section of our website. Before we begin, I'd like to remind you that during this call, we'll be making certain forward-looking statements about Vaxcyte, which are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those referred to in any forward-looking statements. For a discussion of the risks and uncertainties associated with these statements, please see our press release issued today as well as our most recent filings with the SEC, including the risk factors set forth in our Form 10-Q, the quarter ended June 30, 2024 and any subsequent reports filed with the SEC. With that, I'll turn the call over to Grant.

Thank you, Andrew, and we appreciate all of you joining us today. On behalf of the entire Vaxcyte team, I am immensely proud to report that the Phase I/II study evaluating VAX-31 in adults has delivered phenomenal results. We believe these positive and decisive data further validate the potential of our site specific carrier-sparing platform to deliver best-in-class broadest-spectrum pneumococcal vaccines that provide protection against both currently circulating and historically prevalent serotypes. The unprecedented results from the VAX-24 adult Phase II program validated our underlying hypothesis and set the stage for VAX-31 to potentially transform the category. Based on the data we are sharing today, we believe VAX-31 is positioned to set a new standard of care with the broadest coverage and to raise the bar on immunogenicity. These results give us confidence we can avoid the trade-offs that other sponsors have been required to make to chase coverage. This would represent a profound shift for the pneumococcal vaccine category. When we began this mission over a decade ago to build an important vaccine innovation company, we set out to make a meaningful difference in protecting human kind from the consequences of bacterial diseases like invasive pneumococcal disease. Today marks a major milestone on the path towards potentially going beyond what any other company has done in this field. I am tremendously proud of our entire team and the achievement of this defining milestone. Our agenda for today's call will begin with me describing the highlights of these results. I'll then reflect on the potential opportunity these data present before handing it over to Jim to take you through the study results in detail. Finally, I'll pick back up with some concluding remarks on our strategy and next steps for our PCV franchise. I'm honored to announce that VAX-31 exceeded all expectations. In our view, the data clearly supports the potential for VAX-31 to become the best-in-class pneumococcal vaccine with the broadest serotype and disease coverage. With respect to safety and tolerability, VAX-31 was well tolerated and demonstrated a safety profile similar to Prevnar 20, or PCV20, across all doses through the full 6-month evaluation period. In terms of top line immunogenicity, VAX-31 showed robust opsonophagocytic activity or OPA, immune responses for all 31 serotypes across all 3 doses, each of which could be advanceable to Phase III. At the middle and high doses, VAX-31 met or exceeded the OPA regulatory criteria for all 31 serotypes. And for the 20 common serotypes, VAX-31, in most cases had GMRs greater than PCV20. Additionally, for all of the 11 incremental serotypes, VAX-31 showed superiority at all 3 doses. So effectively, it's a clean suite for the program. Based on the strength and clarity of these results, we have selected VAX-31 to advance to an adult Phase III program. Our VAX-24 adult data were stellar, but these VAX-31 results make it crystal clear, it is the program to advance into the adult population. With this decision, we plan to submit a package to the FDA for an end of Phase II meeting and then initiate the VAX-31 Phase III adult pivotal non-inferiority study by mid-2025, and announce top line safety tolerability and immunogenicity data in 2026. As I said, we're in the very fortunate position that all 3 doses in this study could be advanceable to Phase III. We're going to continue to analyze the study results, and we expect to select either the middle or high dose for Phase III. We also intend to pursue breakthrough therapy designation for VAX-31 in adults. In the infant population, we plan to advance both the VAX-24 and VAX-31 Phase II programs in parallel. The VAX-24 study in this population is fully enrolled with over 800 infants and we plan to initiate the VAX-31 infant Phase II study in the first quarter of 2025 following IND submission and clearance. We believe these data provide important insights into the full potential of our PCVs in adults and infants and are excited to turn over the next data cards for these programs. We are also further encouraged by these data as they indicate additional headroom to develop next-generation PCVs beyond 31 to the extent warranted. The pneumococcal vaccine market remains a major $8 billion category as the disease continues to be a major driver of global morbidity and mortality despite current vaccination efforts and is expected to grow significantly for several reasons. The infant segment has and is expected to comprise the majority of this market, yet the adult population is projected to be the primary driver of growth as more countries adopt PCV recommendations and usage expands in younger adults. These results and the foundation we have carefully built have positioned us to advance our PCV franchise to potentially disrupt what has consistently been a crucial vaccine class, both societally and financially. With that, I'll hand it over to Jim.

Thanks, Grant. I'm exceptionally proud to review these results with you all today. Over the next few slides, I'll review the study design, disposition and demographics, tolerability profile, full 6-month safety data and top line immunogenicity data. As Grant said, these data are phenomenal. Before I get into the details of the results, however, I'd like to reorient you on the design of this VAX-31 Phase I/II study. The study was randomized, observer-blind, active-controlled, dose-finding study designed to evaluate the safety, tolerability and immunogenicity of a single injection of VAX-31 at 3 dose levels: low, middle and high, compared to PCV20 in 1,015 healthy adults aged 50 and older. Subjects were screened and then randomized into 4 arms, either 1 of the 3 dose levels of VAX-31 for the comparator arm PCV20, subject to monitor for safety and tolerability at month 1, serology was taken and immunogenicity was assessed. Subjects continue to be monitored for safety through month 6 of the study. All serotypes in the low, middle and high doses were dosed at 1.1, 2.2 and 3.3 micrograms, respectively, of polysaccharide except serotypes 15 and 22F, which were dosed at 1.65, 3.3 and 4.4 micrograms, respectively. PCV20 was dosed as per their approved label at 2.2 micrograms per serotype except for serotype 60, which was dosed at 4.4 micrograms. As is consistent with other results of these clinical studies, including our own, this study had a number of key outcome measures. In terms of safety and tolerability, we looked at both solicited local and systemic events through day 8, unsolicited adverse events and laboratory parameters through month 1 and serious adverse events or SAEs, new onset of chronic illnesses or NOCIs, and medically attended adverse events or MAAEs through month 6. For immunogenicity, we primarily looked at the OPA geometric mean titers or GMTs, as well as the OPA geometric mean ratio, which compares the OPA GMTs of VAX-31 to PCV20. OPAs are considered a measure of the functional antibodies generated against the pneumococcal polysaccharide capsule and are an important regulatory endpoint. In addition, we looked at fourfold rise in OPA titers and IgG geometric mean concentrations, all at month 1. I will now walk you through the study disposition and demographics. Compared to other studies in this field, we had a high proportion of subjects to advance to the safety and immunogenicity population. The study enrolled 1,015 subjects spread evenly amongst the 4 arms, all the subjects doses were included in the safety analysis and a very high proportion of subjects were included in the immunogenicity evaluable population was between a 96.4% and 97.6% including rate and only 2.4% of subjects discontinued the study. With respect to the demographic, we stratify based on age sex, race, height, weight and BMI. These measures were generally well balanced across cohorts and similar from both the safety and immunogenetic population. As is typical in vaccine studies in this age group, female participants slightly outnumbered males, but importantly, the female-to-male ratio was consistent across cohorts. Moving on to safety and tolerability. VAX-31 was well tolerated and demonstrated a safety profile similar to PCV20 at all doses studied through the full 6-month period. In terms of severity, reported solicited local reactions included redness, swelling and pain were generally mild-to-moderate and resolved on their own within a few days. Furthermore, incidents of severity was consistent with what we had seen with both VAX-24 adult Phase II study. Subjects were monitored for solicited systemic reaction consisting of fever, arthralgia or joint pain, headache and myalgia or muscle pain. Reported solicited systemic reactions were generally mild-to-moderate and resolved on their own within a few days. Incidents and severity were also consistent with what we had seen in both VAX-24 adult Phase II studies. The full 6 month data -- sorry, the full 6-month safety data include monitoring of TEAE, MAAE, NOCI and SAE, reported cases were similar in the VAX-31 arms and to PCV20 across cohorts. We saw no related SAEs in terms of reported cases of all monitored events, there were no clustering of cases and what was reported was consistent with what would normally be expected in this population. Before I jump into the immunogenicity results, let's briefly revisit the present regulatory criteria for PCV. For the 20 serotypes in VAX-31 common to PCV20, the criteria for success of achieving non-inferiority is defined as the lower bound of the 95% confidence interval of the OPA geometric mean ratio being greater than 0.5. For the 11 incremental serotypes unique to VAX-31 that are not in PCV20, there are 2 superiority criteria. The first is defined as the lower bound of the 95% confidence interval of the difference in the proportion of subjects with a fourfold rise in OPA titers being greater than 10%. And the second is the lower bound of the 95% confidence interval of the OPA geometric mean ratio has to be at least twice that of the comparator. Turning now to the results for the 20 serotypes common with PCV20. Shown here are the GMRs for the VAX-31 low, middle and high doses. In these forced plots if the point estimate is to the right of the line at 1.0 then the GMT for VAX-31 for a given serotype is greater than that of PCV20. If it is to the left of the line is lower than PCV20. And if the 95% confidence interval for the point estimate crosses into the gray box below 0.5, then the serotype missed on the non-inferiority criteria. And starting with the low dose in the forced plot on the far left, 18 of 20 types met the non-inferiority threshold. The OPA geometric metric mean tires were numerically greater for 8 of the 20 serotypes, which means they had a GMR greater than 1.0 and 3 serotypes achieved statistically higher immune response. Turning to the middle dose. All 20 serotypes met the noninferiority threshold. 13 of 20 serotypes had a GMR greater than 1.0 and 5 achieved specifically higher immune responses. And at the high dose, like we saw in the middle dose all 20 serotypes met the non-inferiority threshold with 18 of 20 serotypes having a GMR greater than 1.0 and 7 serotypes, which had achieved statistically higher immune response. The incremental serotypes unique to VAX-31 and not in PCV20, all 3 doses met the superiority criteria for all 11 serotypes with participants meeting the regulatory threshold for fourfold rise in antibody titers as well as GMRs exceeding the 2.0 threshold. These incremental 11 serotypes have the potential to increase coverage substantially to more than 95%. The OPA GMRs stratified by dose reflects a consistent dose-dependent response for the 20 serotypes in common with PCV20 with a clear trend of increasingly greater OPA GMRs for VAX-31 from the low to middle and the middle to high dose. In terms of the incremental serotypes, a dose-dependent response is also evident. I'd like to point out that given that the scale of the horizontal axis is based on the incremental fold increases in GMR, small changes here represent significant increase in antibody titers. While OPA is the primary immunogenicity criteria in adults, we also looked at IgG GMC for the 31 serotypes. The IgG data indicated strong consistency with the OPA titers and as previously highlighted with the OPA GMTs, a dose-dependent response can be seen with the IgG titers as well. And before I turn it back over to Grant, I want to take a moment to reiterate why developing a broad spectrum PCV matters. Despite widespread use of effective vaccine, the global impact of the disease remains significant and is associated with high case fatality rates and antibiotic resistance. As a result, the public health community continues to affirm the need for a broader spectrum vaccine to prevent IPD. Based on these data, I believe VAX-31 has the potential to answer this need. Grant?

Thanks, Jim. Great job. As we conclude today's prepared remarks, I want to highlight some key takeaways. VAX-31 has the potential to set a new standard of care with the broadest serotype and disease coverage while raising the standard for immunogenicity. As Jim shared in detail, we could not be more pleased with today's results. These data further validate that our site-specific carrier sparing platform has the potential to deliver the broadest spectrum PCVs that provide protection against both currently circulating and historically prevalent serotypes. In light of these data, we look forward to a number of important anticipated milestones for both the adult and infant indications. We have selected VAX-31 to exclusively advance for the adult population and expect to initiate a Phase III pivotal non-inferiority study by mid-2025, following an end of Phase II meeting with the FDA and announce top line safety, tolerability and immunogenicity data in 2026. We plan to initiate the remaining VAX-31 Phase III studies in 2025 and 2026 and submit a BLA subject to the results of these studies. For the infant population, we plan to advance both VAX-24 and VAX-31 in parallel. For the VAX-24 infant Phase II study, which is fully enrolled we remain on track to announce top line data from the primary 3-dose immunization series by the end of the first quarter of 2025, followed by top line data from the booster dose by the end of 2025. For VAX-31, we plan to initiate an infant Phase II study in the first quarter of 2025, following an IND submission and clearance and announce top line data from the primary 3-dose immunization series in mid-2026, followed by top line data from the booster dose about 9 months later. Before we conclude today, I'd like to pause and reflect on this moment. This outcome reinforces our confidence in the potential commercial opportunity, and we are committed to taking the right steps to capture it. Today, we are entering a new chapter for Vaxcyte as we transition from upstart to potential powerhouse and our aspirations quickly transition to obligations to make this vaccine ubiquitously available to protect human kind. With that, let's take some questions. operator?

[Operator Instructions] We'll take our first question from Roger Song with Jefferries.

Great. First of all, congrats for the stellar results today. And so a couple of questions from us. Maybe the first one is related to the immunogenicity. So since your -- even the mid-dose is showing much stronger immunity compared to mixed dose VAX-24. Maybe can you just let us know, given this very strong data, what are the potential drivers for your VAX-31 showing such a strong immunity, and then how would you comment on your comparator's performance?

Congratulations. Obviously, very gratifying. To your question, yes, looking at that middle dose, I guess the first thing we should note is that across both the VAX-24 and VAX-31 Phase II programs, we have the same comparator, Prevnar 20. And yes, we did look to see whether or not there was a shift upward or downward across the immune responses to Prevnar 20 across these 2 different Phase II programs. And we were pleased to see that if anything, the immune responses for Prevnar 20 in this study were slightly higher than what we saw in the previous 2 Phase II studies for VAX-24. So the difference is not a reflection of a reduced comparator. So I think that's one of the key things we wanted to ensure. So as to explanations for how these results are as strong as they are, I think we point to the underlying platform. We have something different than the others with our site-specific conjugation technology. And how they've preserved across an even broader spectrum vaccine is something we're still figuring out, but it's a wonderful situation to find ourselves in. Jim, anything to add to that?

Perfect answer.

Awesome. So maybe quickly on the safety. So maybe you can give us some comments on the numerically difference compared to PCV20, understanding your dose is different and a slightly dose response for the reactogenicity, and how should we think about your baseline population, probably in terms of the age group will have some impact for your -- the reactogenicity profile.

Thanks, Roger. This is Jim Wassil. I'll take this one. In terms of the safety, this is local reactogenicity. The safety was very similar across all cohorts. So in terms of reacting now, you do see maybe a slight difference in a few parameters, but none of those were statistically significant and in terms -- or clinically relevant, in my opinion. Vast majority were mild, some moderate, very, very few severe, and that was well balanced across both all 3 VAX-31 study arms as well as PCV20. And the final thing I'll mention is that you go back and look at the rate of reactogenicity of VAX-24 to that of VAX-31, they are very comparable. So we don't see any visible increases, albeit they are 2 different studies that we're comparing, but we don't see any material differences between 24 and 31 to say that we would have an increase in reactogenicity with VAX-31. So we feel very comfortable that this is a clinical profile that we can move forward into Phase III in commercial lines.

Excellent. Yes, we don't see a real difference between the VAX-24 and 31. Maybe last one from us is, as you moving to having -- at the end of Phase II meeting with the FDA? And then one of the key topic probably will be the Phase III dose, given your mid and the high dose, both pretty promising. How would you -- what is the criteria for you to kick the Phase III dose moving to the Phase III for the adult.

Yes. I'd say the first thing to point out is we are characterizing these data as top line results. Although we do have the full 6-month safety data included and we refer to it as top line because there are some analyses that are still forthcoming including the age -- the prespecified age cohort cuts. So we'll look at the totality of the data as we move toward a decision. Obviously, using less material to drive the immune responses creates an efficiency but creating higher immune response I think as long as we didn't see any safety delta, which Jim has just pointed out, is also attractive. So we'll be sorting through that. It's a high-class headache to have 2 clear winning doses, and we'll just have to work through that over the course of the fall and engage with the FDA on that.

We'll take our next question from Jason Gerberry with Bank of America.

Congrats on our end. Just following up on the question about dose selection. As you go into an phase II meeting, how much of -- the high dose, obviously looks extremely compelling. How much of this is getting some of the added immunogenicity worked into label claims. So for example, like superiority, just wondering the different factors that could push you towards selecting the high dose? And how much of that really comes down to what maybe you can get in a competitive label. And then I know that at some point, maybe there's a plan to look at cross protection against different serotypes. I'm wondering, is there a lot of competitive in value -- competitive value in keeping this type to the chest, so to speak, with GSK working on a 30-something and perhaps keeping a few cards in your back pocket. Just kind of how are you thinking about analyzing different strains for cross protection and when we can get an update there?

Yes. Thanks, Jason, probably split this one. I'll start and maybe Jim will pick up on the back end as it relates to some of the cross reactivity for incremental strains over and above the 31. But as to the question, as related to statistical superiority, I guess the first thing to acknowledge is this is pretty rarefied air. When we saw the results for VAX-24 and seeing as many common serotypes for VAX-24 relative to Prevnar 20 showing statistically superior responses was very gratifying and extremely rare, right? In the instances where other sponsors have developed broader spectrum versions of PCVs it's almost always going to the opposite direction. There's really only one exemplar where there was a single conjugate in the 15-valent PCV that showed statistically higher results. So this is not where others have found themselves in. To be sure, to the extent we see these results repeated in Phase III, the immunogenicity data is routinely shared in the package insert. So at minimum, those immune responses will be evidenced and the stats will be a part of that incorporation. So yes, I think the expectation is that this is meaningful. This has been what has hamstrung key decision makers is the falloff in immune responses in the process of chasing broader coverage. So we showed it with VAX-24 broader and better immune responses, and we've done it again with VAX-31. And candidly, we weren't really expecting that. We knew broader was possible but to actually show broader and better once again with a 31-valent vaccine covering 95% plus of the circulating disease is beyond gratifying. So that's kind of our thinking as it relates to that. In terms of competitive intelligence, yes, this is obviously a critical foundational category for the incumbents. And so I think there will be quite a bit of consternation and we want to be careful, but at the same time, we want to be forthcoming and clear with our constituents. And I think you see a lot of that in today's release. But where we can be more careful, we will be. Jim, any comments as it relates to kind of thinking forward about cross reactivity. We know it's possible and...

Well, I think it was nice to see when the vaccine has got approved that there is a clear regulatory standards that they were able to use to get a claim for coverage based on cross-reactivity or cross-reactive antibodies. We are going to obviously look at our data very carefully. We're going to test it with some of the strains that we believe are serotypes that do have cross reactivity and we'll assess whether or not we can meet that regulatory threshold or not and we'll make a proposal to the FDA with our end of Phase II document. But I wouldn't go into detail as to which of those we're going to be looking at just for competitive reasons, as you mentioned.

Got it. And if I could just squeeze a follow-up. And how are you guys thinking based on this data regarding the often elusory idea of getting an ACIP preferential recommendation just on this data profile if you're able to recapitulate that in pivotal Phase III?

Yes. I mean we've seen this play out at the ACIP both in the infant setting and in the adult setting over the past couple of years. And if you take a look back at those conversations, they're really struggling with the sacrifices that are being asked of them to trade coverage for either loss of coverage on important historically circulating strains or significant reductions in the magnitude of the immune responses. And obviously, the lower they are at start, the lower they'll be over time. And so I think for the ACIP, it's been clear at least in the infant category, they debated whether or not to give a preferred recommendation out of the gate for Prevnar 20. Half of the voting members said, "Yes, let's do it now. The other half said, no, these immune responses are too low, let's wait and watch. So it's clear that there is that opportunity if you're not asking them to make a substantial sacrifice. So I think it's something that is definitely in the offing, if these results hold up, certainly in the infant category with the pending results. In the adult category, that's the trade-off that was debated over the course of the summer, was substantially increased coverage of strains that are circulating today really set up expectations where, frankly, Merck was guiding to expect a preferred recommendation. They didn't get it and the very clear explanation from the ACIP was we're losing coverage on 10 of the historically circulating strains that have the best fitness to cause disease in people. And at least one of them was already circulating in this moment. So that was a trade that the ACIP was not willing to make and that's what resulted in a joint recommendation. So in the case of VAX-31, we've got 10 percentage points on top with VAX-31 relative to the 21-valent for Merck, a 10 percentage point delta was the same delta that Prevnar 20 had relative to the 15-valent from Merck, and they have 98% market share. So that alone would be enough to potentially substantiate a preferred recommendation. But then when you add to it, not only the improved immune responses that we're seeing but also the continued preservation of coverage on those original 10 strains that we've been productively paranoid about for quite some time, I think you end up with a really compelling set of arguments that no sponsor has had to date. We still have some work to do to get there. But based on today's data, I think we're feeling very good about the possibilities for us.

We'll take our next question from Jonathan Miller with Evercore ISI.

Congrats on the data. I would love to ask about the expected replicability in infants. Given your ability to hit superiority on so many serotypes in both middle and high dose in the adults, do you expect that to translate to infant studies, should we expect to be seeing superiority results there as well when we get 31-valent data there in a few years? And would you expect to see that the -- would you expect infant requirements dose to be similar in adults? Or would -- given the different reactogenicity burden in infants, would you expect to see a different choice of dose in infants versus adults when we finally get that data?

Yes. Thanks for the question, Jon. I mean this class of vaccines has had really clear continuity across the responses in adults and infants. There's not an instance of a vaccine that's been effective in adults not being effective in infants. That said, we do see a fall-off in the magnitude of immune responses as these broader spectrum vaccines have been developed. And we believe that this carrier sparing technology could have potentially improved benefits in infants only because of the mere fact that the infants get four vaccinations whereas adults only get one. And so the cumulative amount of carrier is obviously 4x that in infants than what adults are exposed to. So to the extent this is an advantage that's driven by that sparing of the carrier, there's the possibility that, that could widen the advantage. We'll have those results soon enough in the first quarter with VAX-24. That study is taking the same 3 doses that we had taken into Phase II for VAX-24. So we'll see the dose response soon enough for VAX-31. We're still in the ballpark of the similar doses to what we had read out for VAX-24. And I think based on the data today, we're not expecting any significant changes. We'll have a bit of time to lock that down, but I think the expectation is that we would move these same 3 doses into infants like we did with VAX-24.

We'll go next to Dave Risinger with Leerink Partners.

Yes. Thanks very much. So I just wanted to add my congrats, Grant and team on the exceptional results. It's wonderful to see your vision and execution pay off, so I had some different questions. Maybe I'll just go one by one, if that's okay. So Jim, can you just discuss the SAEs in a bit more detail if there's any color that you can provide on the nature of them?

Sure. So in terms of SAE, I had mentioned previously, they were balanced across the VAX-31 cohorts as well as the PCV20, so very similar numbers. In terms of what we saw, these SAEs, none of them were deemed to be possibly or probably related to the vaccine and they were events that would be expected or typical in this population. You're talking about things that would be normal and would be diagnosed in a population above 50 years. No clustering of any cases of any kind as well. So we feel that it's very, very clean.

Great. And then with respect to the age differences between the arms, they seem like very slight differences. But I received a question about whether you can comment on the fact that the middle dose median age was 58, PCV20 was 60. And for the high dose, the median age was 59. Obviously, PCV20 was 60. Could you just comment on that and your initial takeaways.

Yes. There wasn't that much of a material difference. Those are median ages, not means. And so you get a median that is more around it. So in many cases, these numbers, when you look at the means we're closer than you would think, even if you take the extreme example, we're talking about overall study difference of maximum 1 to maximum 2 years. So we think that it wouldn't have any material impact in reading the results.

Right. And then maybe, Grant, can you comment on your decision to start the VAX-31 infant trial in the first quarter ahead of even generating the results from the VAX-24 infant trial in the first quarter.

Yes. Thanks, Dave, for the question. I appreciate the congratulations. Yes, I think our feeling is that these data are so clear and we do have the range all the way down to a 1.1 microgram dose, which, as you recall, was the lower dose in the VAX-24 program. So we feel like we got it covered. We think there is a higher probability that the lower doses could be effective and adequate in the infant population. So we feel good about this range that we're taking in. So that's the decision we've taken. And given the magnitude of this market opportunity, we don't want to lose what could be a couple of quarters to wait for what we think is a low probability outcome that we'd take a different course as it relates to dose, and I should point out just a bit of incremental -- sorry, Dave, is to acknowledge that there have been other pneumococcal conjugate vaccines, studied in infants having shown that 1 microgram can work at admittedly much lower spectrums of coverage. So there is more than just a hunch that a low dose could possibly be adequate. So we feel like we've got the right doses to take forward and we'll see.

And you'll use 3 doses for that VAX-31 infant Phase I/II?

Yes, definitely.

We will. We believe that having the chosen doses that we're moving forward will give us the great amount of information to be able to decide on the dose to take forward in Phase III.

Excellent. And then just finally. So the data today obviously represents significant additional platform validation. So could you please remind us about your plans to leverage your technology to develop additional vaccines?

Yes. Thank you, Dave. Indeed, we definitely feel like this is further validation for the platform. One of the very nice discoveries coming out of this data is that we knew going into this study with the VAX-24 results, we had headroom to add incremental strains. Obviously, we've proven that now with this VAX-31 data, but once again, we find ourselves in the enviable position to see additional headroom yet. And so VAX-31 covers 95% in the U.S. of the circulating strains in adults. In Europe, it's even slightly higher. It's 98% of the circulating disease. So in this moment, there isn't really a good motivator to try to develop a broader spectrum vaccine over and above the 31. But we all know how this space works when an effective vaccine is used widely, the incorporated strains are taken out of circulation almost entirely. And in their place, incremental strains can find a foothold. So understanding that cycle and understanding the headroom we have, it really does warrant a measure of preparation for a third-generation vaccine for which we will ensure readiness. So it's hard to not acknowledge that, that could be an important part of our pipeline going forward. But over and above the pneumococcal conjugate vaccine franchise, we have had strong conviction about our Group A strep conjugate vaccine that is approaching the clinic. We expect to guide in the not-too-distant future when we expect to have that clinical program up and running. And that is a massive untapped opportunity where this disease is very much evidence in adults. In fact, even slightly higher rates of invasive disease relative to pneumococcal disease. And I'm talking about prior to the introduction of PCVs in that market. So a big opportunity to prevent a substantial amount of disease in adults and a very significant problem in infants as well -- not infants, sorry, in children, and a massive global issue with downstream effects from untreated Group A strep infections. So we are very excited about that program. That will be a key investment for us and is absolutely underwritten by the same site-specific conjugation technology that we possess. So those are a couple of examples. We have at least one other broad-spectrum conjugate vaccine in mind that we've been working on, but yet to unveil. So yes, we believe there are quite a bit of additional targets that we can go after and produce an organic compelling pipeline with our platform, not to mention a few protein-based vaccines that are noted in our pipeline as well. So yes, a very exciting moment for us, and we believe a pipeline that can have durability.

We will take our next question from Salim Syed with Mizuho.

Congrats on the data. A few from us as well, if you don't mind. I guess the first one, when you're thinking about the comparator here for the Phase III trial, could you perhaps give us your framework for whether you plan to use PCV20 versus V116? Or is there a scenario here where you would include both just to make it super easy and clear for ACIP and just market participants. And just given where some of the titers came out today in the data, are there any serotypes that you would view as riskier if you were to use V116, to preface that from our math, it looks like 11A, 12F and 17F, would be the ones to watch if you're comparing to V116, would you agree with that?

Yes. First of all thank you for the congratulations, Salim. I appreciate the question. I guess what I'd say is we have had an opportunity to eyeball the results of the other alternative vaccine in the adult class, the 21-valent from Merck. And we don't see anything that would give us pause as we could imagine a comparative study. That said, it's been clear at least from a regulatory perspective that, that is not an expectation. So the fact that we've now had this continuity across comparisons to Prevnar 20, the market leader it would make most sense to stay the course on that, but we'll be evaluating that. We'll be having those conversations with the FDA and regardless of the outcome, I think we're extremely well positioned and confident.

Okay, Thanks Grant. And then with regards to the plans for entrants, totally understand no plans to pick one right now, VAX-24 or VAX-31. But is there at some point you think a point here where you do pick one? Or do you just think it's the higher ROI? And it sounded like you may have alluded to that earlier that it's just better for you here to develop VAX-24 all the way through market. And then even if VAX-31 has a little bit of a time gap, you would just come after the VAX-24 is already on the market? Or is there a way that you can minimize the time between the two, where you feel like you can come out with the VAX-31 prior to VAX-24 getting to market?

Yes. I mean we said that, at least in the adult population, the transition from VAX-24 to VAX-31 does not come with a time penalty. So that makes the choice to pivot to VAX-31 quite easy. In the infant indication, we're not in that position in this moment. So as you know, with the VAX-24 Phase II data reading out next year, it's got a couple of year head start on VAX-31. To the extent we could imagine or deliver an outcome where we could close that gap, then with the right data, VAX-31 would be an appropriate pivot. But that time delta is material enough that it warrants this parallel processing of the 2 programs. This is the largest component of this category with probably 5 to 6 -- or $6-plus billion in annual sales. So the opportunity to bring a broadest and best-in-class vaccine to market earliest is something we can't pass up. So that will be the plan, but we are going to move as quickly as practicable with VAX-31. And if there's an opportunity to catch up, then that would be a wonderful outcome.

Okay. And just one on safety. Jim, I know you mentioned there's no clustering of events, but it does look like perhaps there's some dose dependency from -- looking at Slide 18, right, were: 0.8% in the low dose; 1.2%, middle dose; and 2.0 in the high dose. Just wondering, reading too much into that or if that's accurate. And I'm just curious if you could also just give us a little bit more specificity what exactly were the SAEs that you were seeing?

Yes. So I would say 0.8% to 1.2%, that was one additional SAE reported. So I'd say with such low numbers, it's hard to make any conclusions with the randomness of data. And just to give you a flavor, 2 of these were fractures. One was deep vein thrombosis, I can go on, but we have no concerns over the SAEs in terms of degree of relatedness with this vaccine.

Okay. And just last one for me, if I can squeeze one in. On the serotypes that were incremental, it looks like there's a fair amount of range on those. Can you maybe just comment on that? And is there any reason why 17F looks like it came in, I guess, the lowest. Is there anything in particular watch for here on 17F.

Yes. No, I would say there's no concern on 17F in our Phase II. With our OPA, we had an upper limit of the assay that was validated. Any results that were above that were cut off. So we didn't get credit for the additional responses. In our Phase III, we've already validated the assays to extend that range by about almost too large difference, so what was a limitation was because 17F actually responded so well that it went above our assay capabilities and we've rectified that for our Phase III.

We'll take our next question from Seamus Fernandez with Guggenheim.

So just one question for the team is the advantages of the 31-valent serotype, particularly in the pediatric setting. I know in adults, it's very clear. But I think we've talked about some key serotypes that you think could bring a material advantage in the pediatric setting in particular, especially as it relates to a label that you may be able to pursue for otitis media over time. Obviously, breadth is one thing, but indications could add, I think, incremental potency to your sustained leadership position over time. So just interested to hear a little bit of a thought process there. And then just the other question that I had, just a clarification on your manufacturing -- established manufacturing capacity and where you feel you'll be in sort of 2028 where we are kind of predicting the potential launch. And again, let me echo my congratulations. You guys actually beat our best case scenario. Thanks for doing that.

So Seamus, thanks for the question, and I appreciate the atta boy. Yes, I mean, the pediatric indication with VAX-31, it does incorporate a few of the strains that are driving otitis media, which is an additional indication that these vaccines have over and above invasive pneumococcal disease and then community-acquired pneumonia. So yes, it does substantially broaden the coverage. And so it does make VAX-31 just as compelling, I'd say, in the adult space as in a similar light as in the infant space. That said, VAX-24 very clearly has a best-in-class profile. And obviously, we've seen substantially improved immune responses in addition to the expanded coverage. That's only furthered with VAX-31. So we feel like we've got a winner in either one, but VAX-31 is just that much more emphatic and has this secondary impact in otitis media. Jim, do you want to complement that?

Yes. Yes. I would just say that 35B in particular, causing 15% of otitis media in the U.S. so you get a huge increase in coverage. And it's almost -- the incidence is almost like 1 to 1 for every infants gets these otitis media cases. So not only are we going to expand invasive disease for 35B, we have 16F, we had 23A, 23B, all of those can contribute to invasive disease and antibiotic resistance strains. But in addition, with the ubiquitous otitis media, having that incremental coverage where we almost more than double the coverage of otitis media versus PCV20, I think that's going to have a huge medical benefit.

And to your question about manufacturing and readiness there, I think we've been clear that given the strength of the VAX-24 data, we have believed we have had a winner in our hands. And obviously, we feel only that much better about our competitive profile with these VAX-31 data. As you are aware, we'll initially be launching out of exiting Lonza infrastructure, we'll be using that material to fuel the adult market. the infant market will trail. We've already begun the construction, outfitting and bringing online a dedicated manufacturing facility with Lonza. We're well on our way to bringing that facility online. And we will be doing everything we can to do that as quickly as practicable to ramp supply not as we imagine the infant indication coming online, but as we come to grips with the potential to have such a leadership position in the adult market, not only here in the U.S., but as other countries are beginning to universally vaccinate adults. We expect that to continue and that's been with inferior coverage with the incremental coverage going up. So substantially over and above what has been recommended, which has been Prevnar 20. We would expect that adoption of adult vaccination to only accelerate and we want to be at the ready to supply that. So yes, we're going to be doing everything possible to do that to make that transition to the larger capacity facility as soon as practicable.

And Seamus, this is Andrew. I'll just add on the Grant's comment to everything we said as we prepare for initial launch in the adult population and then a later launch in the infant population. An increasing proportion of our spend over the next few years will be to build and stockpile inventory in anticipation of and to support those potential launches. And as Grant said, our confidence in that commercial opportunity, frankly, to both populations is only growing as a result of today's data.

We'll take our next question from Louise Chen with Cantor.

Congratulations on the data. So I had a couple for you. First, I wanted to ask you about the potential opportunity to lower the age for adult PCVs from 65 plus to 50-plus. And then secondly, just wanted to also ask you in terms of your manufacturing, if you were to get a preferential recommendation, what is your plan to have enough to supply the entire market? And then lastly, just on the international opportunity, how do you plan to pursue that with -- would you do on your own? Or would you look for a partner there?

Thank you, Louise. Appreciate those questions. Yes, we all know that ACIP had a very vigorous debate this summer in June about lowering the recommendation from 65 and up for universal vaccination of adults here in the U.S. And there is a very clear movement toward the desire, recognizing the benefit of vaccinating adults at younger ages. It was clear that they're struggling with the choices that they have. I think it was clear that it's only a matter of time. And when we saw our data we're clearly in a position to give the ACIP what they were looking for, which was an opportunity to broadly vaccinate this population without sacrificing strains that have been problematic historically. So we believe it's coming. When it will come is still a matter of question. They noted that they would be taking up this debate as soon as their October meeting, so we will be watching that very closely, and we feel extremely well positioned to give them what they want. Whether or not they'll wait is a matter of question, but we know when this vaccine becomes available, it will be extremely well positioned to take advantage of the needs of that age range. And then your second question was if we were to get the preferred recommendation, what would that impact have on capacity. We have been anticipating the sort of penetration associated with a preferred recommendation. We took that into consideration as we sized this facility with Lonza, so this would not be a change of plans to be preparing for an outcome like that. So we think we're well positioned to rise to the occasion of that demand. We would not be able to meet that out of the existing infrastructure at Lonza given that it's shared with other sponsors. But as we transition to the dedicated facility we'll be able to rise to the occasion across both populations. So we'll be working to bring that online as soon as practicable. As it relates to the international markets, we fully possess all of these vaccine candidates in all territories and have all rights. We are very much looking to bring these vaccines to as many in this -- in human kind as possible. We believe we are extremely well poised to deliver on that. But we will be open minded about at what point are there other folks who might be able to help us penetrate certain territories that we might not get to on our own. It certainly won't be any of the major territories that we think about who comprise the primary drivers of revenue, but there will be certain territories that may be a bit more challenging, and we'll be thoughtful about how to ensure we bring this vaccine to as many folks as we possibly can.

We'll take our next question from Joseph Stringer with Needham & Company.

Just a follow-up from us on manufacturing. From a CMC and manufacturing and maybe a cost of material perspective, is there a significant difference between the VAX-31 mid- and high dose? And how would all of those factors factor into your decision on dose selections for the adult Phase III?

Yes. Thanks, Joey. Thank you for the question. Yes. I mean this is a class that by virtue of the details that had been shared over time, it's pretty well appreciated that the cost of goods on these vaccines is not insignificant, but relative to the benefit they confer, the price that is easily justified creates quite a good return on a relative basis for cost of goods. The bottom line is that the societal benefit is massive. So no one needs to feel guilty about this actually turning into a good business because the macro effect is so valuable. But yes, the less material is obviously less expensive. So that is one consideration. But in the scheme of things, it will not be something that would trump the benefits of, obviously, longer-term better outcomes for those vaccinated with our vaccines, but it will be one consideration that we consider. And obviously, in this business, you never want to give more material than is required to deliver on the outcome that you're seeking. So we'll be taking all those things into consideration as we make the final decision on dose to advance the Phase III.

We'll take our final question from Tara Bancroft with TD Cowen.

Apologies for any background noise, I am in the airport. But my question is, I guess, given the strength of the data that you reported, wondering how this might change your powering assumptions for the Phase III? Like what would be a good benchmark for size that you're looking for, for this trial? And then along those same lines, do you have any expectations for enrollment time lines, like would it be similar or faster than the Phase II given the strength of these data.

Wow, Tara. I thought you might be calling on an air phone as I thought you were going to be in the air. Yes, this is actually one of the nice surprises with this data set. Obviously, we had provided some guidance as it related to expectations for the VAX-24 pivotal non-inferiority Phase III study based on the conversations we've had with the FDA. We have said that, that study was going to be, at least the sample size was going to be driven by the powering to show statistical superiority versus the positive control. We find ourselves in a position where the treatment effect in terms of the GMRs and the statistically significant improvements are all very similar to what we are working with the VAX-24 data. So it's a bit early to say with precision, but I'd say the ballpark expectations on sizing of that study will be pretty similar to what we had been thinking for VAX-24. It will depend on which dose we select, obviously, and we still have some incremental data forthcoming. But I'd say, at this stage, we'd expect them to be pretty similar. We've been saying somewhere around 750, give or take, per cohort for a Phase III study to the extent it could edge up slightly. Of course, recall, we have to have at least 3,000 subjects exposed to our vaccine in the BLA program. So even if we were to push up those subjects, it wouldn't really necessarily add incremental subjects to the total package. So it's just a matter of where those subjects come from. So yes, I think pretty similar to what we had been thinking, give or take. And then with regard to enrollment, we think this will be the same target population that we had been expecting for VAX-24, so this we have said will be the longest to conduct of the Phase III studies that we'd expect in the program. But nonetheless, starting it in 2025, understanding that there will be some incremental studies starting later should allow us to have that data readout in a similar time frame. And we've said for the VAX-31 Phase III pivotal non-inferiority study that it would start by mid-next year and read out in 2026. So at that point -- at this point, that's as specific as we've gotten.

And there are no further questions at this time. I'll turn the call back to Grant Pickering for any closing remarks.

Excellent. Thank you, operator. I'd just like to thank everybody for joining today. And on behalf of all of our Vaxcyte colleagues, we want to thank everyone for their continued support. This is a very exciting day for the company, and we look forward to advancing our PCV programs further. Thank you very much.

Thank you. And this concludes today's call. Please disconnect your lines at this time, and have a wonderful day.