Michael Ryskin. I'm on the Bank of America Life Science Tools and Diagnostics team. For our next chat, we're excited to host Guardant Health. We're joined by Co-Chief Executive Officer Helmy Eltoukhy and Mike Bell, Chief Financial Officer. Helmy, Michael, thanks so much for being here. Really appreciate you taking the time.
Yeah, great to be here.
Forum will be a fireside chat. If you've got questions, throw up your hand and we'll call on you to speak anyway. Maybe we'll start with sort of a high-level question. You guys just reported first quarter, just a couple of days ago, really strong beat, you know, broad-based, nice raise. Talk through how the quarter played out to your expectation of where things came a little bit better, and how you're taking that going forward.
Yeah, I mean, I think it's been exciting to see us sort of lean into the three S curves that we're embarking on in terms of utilization, adoption, certainly therapy selection. We've been doing really well, and that I think is I think the Smart Platform is the gift that keeps on giving and that continuing very strongly. You know, there's a saying in diagnostics, therapeutics, that how you start the experience, how you finish. Having strong first quarter in therapy selection, rest of the year. MRD, you know, I think we've done lean into that. Obviously they're pushing longitudinal testing, pushing in the indications we're in and had a very strong start in therapy monitoring. We're very excited about where that is going. Up to 100% therapy areas added.
I think pretty impressive given sort of how much curve they accepted. In field, with screening drives really excellent results. I think this shows the power of what they believe the fact it's been a quickly from the new standard of care meaning over the. Yeah, you don't often get signs of like very fast growing sort of back S curve company. It's all coming together. I think religion, division.
Maybe we'll just build on that in terms of taking that into the full year.
Guide raise, you know, you raised the guide by more than you beat. You updated some of your assumptions for oncology for Shield. Sort of what gives you confidence in that momentum continuing, and sort of maybe you could deconvolute the guide raise, like what are the biggest drivers of that, Mike?
Yeah. I think yeah, we're really pleased with the Q1 performance. It, you know, it enabled us to raise our guide for the full year. There's two key drivers of that guide raise. One is oncology volume, and secondly, it's Shield volume. You know, on the oncology volume, really the key though is Guardant 360 and really the strength that we're seeing, I think Helmy was talking about it with the Smart Platform. We started Q1 very strongly, and I think again, it just gives us a lot of confidence going into the rest of the year. We know we've got, you know, additional catalysts with new waves of Smart Apps through the year.
Specifically on the Reveal side, again, we saw good traction with MRD, but we were very pleased with how therapy monitoring is tracking. We launched that in Q4. It was incredibly strong in Q1. Again, I think the strength that we saw just enabled us to have a lot of confidence for the remainder of the year. With Shield, you know, we talked about the momentum in March. We see a lot of catalysts starting to come into play. We're seeing better rep productivity. We're adding to the number of reps we have. Throughout the year, we expect that additional number and the increased productivity to drive continued volume growth. We initiated our Quest collaboration towards the end of Q1.
You know, that's still early days, but the signs were very, very positive. You know, we think that's gonna be a contributor for the remainder of the year. You know, as well as having a strong HPC marketing campaign. Last year, we added to that in Q1 with a lot of DTC initiatives. Again, that's very early days, but the initial sort of response that we're getting for that again looks very strong and we're, you know, we're continuing that DTC campaign into Q2. I think we see a lot of catalysts on the screening side, and again, that gave us a lot of confidence to increase our volume guide. Of course, you know, the volumes driving for those products are driving the revenue increase.
Maybe, sticking on screening and Shield. You know, you raised your both volume and revenue assumptions for the year. Kind of, you know, if you just do the math real quick, you kind of talk to maybe 10,000 tests sequential quarter-over-quarter through the year. You know, as you talked about, you know, Quest in the second half, sales rep productivity, are those the big pieces driving that? Is that more of a second half dynamic? Sort of like, is there upside to that 10,000 per quarter jump? Just sort of like degree of conservatism on that, and what are the key drivers of that step up?
You know, well, I would say that that sort of, on average 10,000 a quarter, we're very confident with that, with that, quarterly cadence. We've got a lot of experience now from the prior year, and we know how sort of the seasonality works, that gives us confidence. And again, you know, probably the key driver at the moment of the volume growth is on the sales rep side, as it has been for, you know, the last sort of 12, 18 months as we're adding new reps and those, you know, tenured reps are starting to get more and more, sorry, better and better, productivity. They'll continue to drive it in the near term.
I think, yeah, we would look at, you know, the impact of Quest really starting to kick in the second half. Similarly with the DTC, I think that'll start to really kick in on the second half. You know, on top of that, we've talked about this a lot, but we're expecting ACS guidelines to come in the relatively near future. That's not in our guide at the moment for 2026. If and when that comes, you know, we see that that can be a positive upside. Initially on the volume side, it'll enable us in those ACS states to open up to patients under 65 and drive more of the commercial volume.
We see that, you know, the revenue impact of that coming more into 2027 because it'll take time for the commercial payers to come on board and start paying us. Again, we see that as being a potential upside to our guidance for the back half of the year.
Okay. All right. Maybe on the topic of ACS and, sort of, you know, reimbursement or ASPs, you know, you came in a little bit higher in the quarter for Shield than you expected. I think you're projecting something like $775 for the rest of the year, which is, you know, relatively consistent with where you were before. There was a little bit of a catch-up dynamic there. Can you just talk about how that played out in the quarter and just sort of the mix component for Shield and how that factors into the guide?
I mean, since launch, we've had this real focus on reimbursable tests. The Medicare age population where we're getting paid, you know, $1,495 Medicare fee for service with the ADLT rate, and we're getting very good payments from on Medicare Advantage payers. That actually, you know, keeps continuing to get better and better. That's what drove the out of period true-up that we had for screening in Q1 and also in Q3 and Q4 of last year. That's going incredibly well. You know, as we open up with Quest, as we've got the DTC campaigns going, and then potentially, as ACS kicks in, we're expecting to see more and more volume come from the under 65s.
We've put a lot of friction in the system previously to sort of prevent that, but I think we'll just relax that. Our expectation on ASP is initially that's gonna tick down the ASP because we'll get more commercial zeros initially. Effectively, we're opening that up because we're expecting, as particularly with ACS guidelines, to start getting better commercial payments. It'll be an initial tick down, but over time, it's gonna ramp back up as the commercial payers start to pay us.
Do you have a sense of the timing on that, in terms of how long until it ramps back up? Is it really dependent on ACS, or is there, you know, do you assume like a 12, 24-month gap, or just sort of walk us through the bridge back up?
Yeah. You know, some of it obviously is gonna depend on the timing of ACS guidelines. I think, you know, we think probably it'll take around 12 months to really get to a position that where we wanna be with commercial payers. You know, there's probably gonna be some payers that early on start to pay us. We're fully expecting it'll take time. We've got a very strong team, reimbursement team that's got good relationships with pretty much all of the key payers, and we've built that up over time from the oncology side of the business.
Yeah, once we get into guidelines, I think, you know, that team will go into full effect and, you know, we'll be having a lot of dialogue with those payers and, you know, 12 months is our sort of expectation, but hopefully, we'll be trying to sort of bring that forward as quickly as we can.
Okay. All right. Let's chat a little bit about therapy selection. Helmy, in your, in your opening comments of maturity in that business, I mean, that's certainly been a talking point for a while. They, you know, grow in competitive noise, you know, really strong growth of, you know, maturation or saturation in the business.
Yeah. Liquid biopsy sort of therapy selection. We think the market has so much more room to grow. When you think about patients living longer, like every patient progression that's there, different lines of therapy, the guidelines and clinical practice really requires essentially doing another genomic profiling at each progression since the cancer is changing. Frankly, that is not standard practice right now. I think very few patients are getting tested multiple times, and that's something that I think is a huge catalyst and huge driver of frankly, you know, pretty significant growth multiples over where the market is today. Secondly, you know, still a lot of patients aren't getting even an initial comprehensive profiling, especially on the liquid side.
I think, you know, that's where, you know, I think you see outsized growth there as well. I think what's exciting is that a lot of the growth we're seeing is really, I think, predicated on the, what we believe to be superior product market fit we have with this new Smart platform, and the fact that we're seeing sort of share gains as a result of that, as well as we seem to be sort of sucking up more than our fair share of market growth as well, at least on that initial time point, that sort of zero to one moment. That bodes well for us continuing to lean in on moving the market from one to sort of, you know, N number of tests per patient.
Yeah, so it's been exciting. The pieces are all coming together with You know, you can think of the tip of the spear as Guardant360 Liquid for us and the smart platform, but that sort of brings along our tissue platform. It brings Guardant Reveal for therapy monitoring along for the ride and creates this really nice flywheel and synergistic effect between these products.
You mentioned share gains. Is that across the board? I mean, obviously, tissue's still really, really early in terms of ramp-
Yeah
you know, how much are you seeing the, like you just discussed, you know, being able to leverage both?
Yeah, I mean, I would say speaking more for liquid, I think tissue is still probably too small. It's probably in the weeds in terms of exactly where that's coming from.
You know, we're excited for, you know, really this next chapter as we get FDA approval for Guardant360 Liquid, as we continue to lean into therapy monitoring more. We feel it's gonna be increasingly harder to use multiple sort of providers for, something that you'd rather see a holistic and unified view of, with each and every patient.
Okay. Now, I mean, you touched on therapy monitoring, maybe let's go there.
Okay.
Is that starting to matter? Is that starting to show up in numbers, seeing things? It's still very early, but you seem to be having really good traction there-
Yeah
talk about what you're seeing there.
Yeah. We've, you know, we're just one full quarter now in terms of the launch of therapy monitoring. It's, you know, we think it's gonna be a pretty large indication in general when you think about million plus cancer patients under sort of a late stage therapy, each of those patients sort of needing to be monitored, needing to be potentially switched to another therapy. We think it's a really nice sort of prompt for leaning into progression testing as well. If, you know, you see a number that you're following for that patient, you see ctDNA levels going up, then it's pretty clear that patient needs to be tested for new mutations for potentially new therapeutic options.
We think the, you know, the sum, you know, the sort of the sum is greater than sort of the individual parts there, in the sense that, like, you know, these tests really work together really nicely.
Okay. You talked a lot about on the quarter in your last couple quarters about, you know, Smart Apps and the contribution there and the benefit you're seeing to the platform. Seems like that's having a bigger and bigger impact over time.
Yeah.
Just talk about, you know, the uplift you're seeing there and where do you think that trajectory could take you.
Yeah. Ever since we launched the Smart platform in 2024, we've seen just kind of a steady sort of, you know, accelerated growth rate for 360 Liquid, and that continues to this day, and we see that continuing, I think, into 2026 and beyond. You know, so the nice thing about the platform is that we're continually amazed by the capabilities that are unlocked by not just having this differentiated chemistry, but by then the data that we're accruing as we have hundreds of thousands of samples, well more than 500,000 methylation profiles. As we use more and more data to train some of these new algorithms, the resolution we can see, the some of the performance capabilities we can see continuing to grow quite exponentially.
We're very confident. We have dozens of new applications under development, I mean, even just, you know, this weekend, team was emailing me with like new applications that we didn't think were possible that suddenly are working now. Obviously, this is being accelerated with some of the agentic AI capabilities and our ability to sort of increase the velocity of exploration we can do with multiple agents looking at, you know, sort of like different analyses. It's a great time. I think our thesis that he or she who has the most sort of biological data will eventually win out is playing out. We've been sort of heads down focused on building the sort of data acquisition engines in Guardant360 and Guardant Reveal and Shield.
Now with like the whole AI revolution, it's made our ability to sort of take all of that data and analyze it in a streamlined and very cost-efficient way, you know, all the more powerful.
Okay. Are you know, a little stuck on that topic? Are you leveraging that today already? Is that starting to manifest already? Is that sort of like a future trajectory?
In terms of AI, I guess?
Yes.
I mean, it's been transformational for the company. I mean, there's a huge shift from, you know, obviously we were always tech forward coming from, you know, the engineering space and so on and from Silicon Valley, but really to rebuild the stack in a sort of AI native fashion across the different divisions in the company, from legal to HR to operations to obviously, like, our software. You know, I think something like 50% of our software is written by, you know, AI now and produced. This has been the case for many quarters and for over a year now. You think about, like, you know, just the logistical burdens, administrative burdens that are required in the healthcare space around billing, reimbursement, and appeals.
You know, the level of automation we have now has been really fascinating and really exciting. Same thing on the regulatory side, being able to put together regulatory submissions much more quickly, making sure you double and triple-check that with consistency and coherency that can be sort of aided by AI, I think has been really transformative in terms of the velocity by which we can move across these different divisions. You know, on the R&D side, the informatics work, you know, our 10X engineers have become 100X engineers, frankly.
The fact that, you know, you have individuals who are really good at algorithmic development, but maybe didn't have the bandwidth to sort of harden the software or build, like, you know, very hardcore kind of software deployments can do that now, like, very easily through a agentic fashion, I think, has given, you know, a number of individuals, frankly, unforeseen superpowers in terms of being able to move much more quickly.
Okay. I mean, so far I think we've touched on a lot of the positives from the quarter and recent trends. Let's just run through some of the, a little bit more negative data points real quick. I mean, one is the SERENA-6 AdCom was a lot of focus on the quarter, maybe a little bit too much of a focus. Now that you've moved past and we had a little bit of time to digest it, just what do you think are the more practical implications, both near term for SERENA-6 specifically, but also for, you know, future opportunities along the same vein?
Yeah. I think the silver lining there was that, you know, I think to every single person on the committee there was, I think, supportive and believed that ctDNA testing was the future of oncology. I think, you know, sort of the, their North Star is still alive and well, I think, you know, despite, you know, the mixed decision there. I think you had a number of the sort of key KOLs there also very supportive of this sort of new paradigm, which I think was great to see. I think, you know, the SERENA-6 was, you know, never really the primary sort of avenue to get to this sort of modality of longitudinal testing and adaptive management of disease.
It was really revealed for therapy monitoring as our sort of number one plan of attack of making that new vision, that new reality a standard of care. I think we're off to a really good start. Obviously, we have some submissions for reimbursement in flight with IO and chemo, and we'll have a number of other ones as we accrue more data. I think regardless of how camizestrant sort of turns out, we think this is a future that is very much in the near term and one that we can make happen, like, just within the capabilities we have within our own company.
Okay. Another topic during the quarter that got a lot of attention was CLFS, more broadly, I think across the entire diagnostics universe. You know, not even necessarily as much on Guardant, but certainly spilled over into that as well. You know, where do you sit on that debate, and why do you think, you know, you're insulated and, you know, not necessarily impacted by that?
Yeah. I think there's a lot of confusion around that. You know, I think, you know, from what we see that it was a discussion of sort of different practices of some of the different MACs in terms of how they adjudicate claims. You know, and I think MolDX has, you know, sort of been proactive in that discussion in terms of, you know, some of the positive assessments that are required, technical assessments and submissions, you know, positive LCDs and so on. Obviously, you know, we're squarely within that MAC. We actually think we're less sort of affected than most. The other piece is, you know, most of our products are essentially going to national CMS.
We're sort of above the fray, I would say to some extent. Shield obviously has a national coverage decision. Guardant360 CDx does. Soon, Guardant360 Liquid, you know, will too, as we get through FDA approval. You know, I think there was confusion around that and ADLT and so on. Again, this is really something that is a very different conversation than anything around PAMA, which is really in the realm of sort of legislative action, and we don't think is under any kind of risk at this point.
Okay. The last one that we had some questions on immediately post the result was you had a little bit of a update in the 10-Q.
About civil investigation in Florida, you know, doesn't seem to be a huge concern, but just talk us through why you're not necessarily worried about that and so maybe any background you can give there.
Yeah. You know, I think in this industry it's one of those, we look at this as sort of normal course of business, I think. These come every now and again. I think, you know, a lot of our peers you'll see have had those sort of CIDs over the last few years. We had one back in 2022, you know, list of questions which we answered. Nothing, nothing came of it. You know, we take these things of course very seriously. Of course we'll work with them and respond accordingly.
You know, it suffice to say we have a very strong compliance program across Guardant that we're actually very proud of. You know, based on that, we don't look at this as an issue. Again, we'll take it seriously, but we don't see it as material or a specific issue for, you know, for us to deal with.
Okay. Maybe in the last couple minutes left, wanna ask a couple sort of big picture thematic ones. Kinda debate that emerged during dinner last night that I thought was really interesting was sort of the, you know, where diagnostics fits and especially, you know, cancer care continuum diagnostic fits in therapeutics in the world today. You know, you've been fighting this fight for more than a decade now. It's sort of the, this question of value of diagnostics versus the therapeutic. You made a, you made an interesting point earlier in talking about SERENA-6. You talked about, you know, increasingly people do view ctDNA today as the future of oncology, and there is a paradigm shift.
Sort of where are we on that curve, and you know, is that, is progression along that curve of the understanding of the importance of diagnostics, is that at the end of the day what's underpinning the strong growth you're seeing in oncology? Is that conversion of, you know, that paradigm shift really what we're seeing play out now?
Yeah, look, I think diagnostic companies for probably decades have been saying that, you know, they're not getting the true value they deserve, that they inform decisions. They should be more value there. You know, the reality is that 70% of clinical decisions are informed by diagnostic testing today. They are essentially the lion's share of how physicians make decisions on patients. When you think about this sort of wallet share, you know, across the board and, you know, people sort of wring their hands around diagnostic testing, frankly, all of Medicare diagnostic testing is $8.3 billion compared to $1.7 trillion-$1.8 trillion in terms of total Medicare and Medicaid spend.
You know, we're sort of stepping over dollars to grab pennies when we, when we think about like, you know, optimizing the price of diagnostic testing when, you know, we have these massive boulders of cost when you think about these $100,000 costs, you know, of therapeutics that are out there or even $1 million cost of therapeutics. Any other industry you measure twice and cut once. For some reason we think we wanna save like a little bit of money, you know, $2,000 to then misutilize $100,000 drugs. I think we just have to take a step back and look at the totality of the picture. You know, and I think it'll happen. You know, there's just no industry where data is not king. I mean, financial industry, tech industry, everywhere.
You know, I think historically diagnostics have been pretty simple. They've been sort of very unidimensional in terms of the type of data that you're getting out of them. When you have these broad tests where the potential utility of the test is way greater than its current utility, that's where I think you get these like big step shifts in industries. That's what's starting to happen now, and especially in our industry, I think is the one that's leading the charge here. I mean, we're gonna have one exabyte of data very soon, like in our portfolio, and there's just this nice sort of snowball effect in terms of like greater and greater utility that we can sort of glean and provide to physicians.
Yeah, we're very much I think on sort of our way to I think correctly shifting the value proposition towards diagnostics.
Okay. Mike, maybe one for you. You know, continue to make strong progress on gross margins, and you've got some nice operating leverage and volume leverage as you were moving through the year. At the same time, you're still making a lot of investments in commercial sales force, and you know, continue to make invest in R&D. Just talk about the, you know, the balancing opportunities there of investments versus margin expansion as you go towards, you know, EBITDA breakeven, free cash flow positive.
Yeah. you know, at the moment we're sort of balancing that by taking screening separately, and then we take the rest of the business. If you take the rest of the business, you know, from sort of middle of last year, that was free cash flow positive and adjusted EBITDA positive. For the full year this year, it's gonna be, it's gonna continue to be so, in fact, very quite strong adjusted EBITDA and cash flow in 2026. I think we're getting the balance right of reinvesting in the right areas of R&D and sales and marketing across the sort of oncology and biopharma business, 'cause we still wanna support innovation, and we still want to support top line growth.
I think we're making the right sort of balance there. On the screening side, you know, this year, same as last year, we're investing heavily on the commercial build-out. We want to take as much advantage of this first mover position that we have. We want to ramp up the sales field team as quickly as possible. That's what we're doing. We're reinvesting every sort of dollar of incremental gross profit back into the sales and marketing line. That's gonna continue until we get to a certain level of scale. We're very confident in 2027 that on the screening side, we'll reach an inflection point where we've got to that scale on the commercial build-out.
Incremental gross profit as we're deriving that then can start to drop down to the bottom line. You know, we're still, even with these heavy investments across screening, we're still committed to being breakeven by the end of 2027, and very confident we'll do that.
All right. Maybe just quick closing remarks. Helmy, anything specific you wanna call out? I mean, again, really good progress, really good start to the year, but just sort of concluding thoughts or, you know, what do you like to leave investors with?
Yeah, I mean, I think the numbers speak for themselves. Very strong quarter, everything sort of firing on all cylinders. Yeah, I think it bodes well for this sort of next chapter of Guardant's growth.
All right. Well, thank you.
Thank you.
Thank you very much.
Thanks.
Helmy, Michael.
Thank you.
Thank you for being here. Thanks, everyone.
Thanks. Yeah, pleasure. Thanks.
[Break]
All right. I guess it's quiet. We'll probably get going then. Thanks for joining the session with Moderna Therapeutics. Thanks for attending the 2026 Bank of America Healthcare Conference. My name's Ryan Shanahan. I'm a Senior Biotech Analyst at Bank of America covering Moderna. I'm pleased to be joined by Lavina Talukdar, Head of Investor Relations. Lavina, thanks for being here.
Thank you so much for having me. That was the best pronunciation of my last name.
I've been practicing for, just for this. Maybe just to start, you know, you've got four approved products, you've guided to revenue growth for 2026, you've already beaten your own reduction targets ahead of schedule. I guess is 2028 still the break-even target, and is this now maybe conservative? I guess what are the key variables that could accelerate or delay this?
Yeah. Great question. Thank you for asking it. We did guide to up to 10% growth in 2026. There are two contributors to that growth that, you know, I would focus you guys on. Increased growth of mNEXSPIKE, which was approved last year and participated in the fall 2025-2026 season, as well as our strategic partnerships in the U.K., Canada, and Australia, where we have very good visibility to the growth coming from those three markets, owing to the fact that we've built facilities there and those facilities have been online since 2025. The full year effect of those contracts or those strategic partnerships come into play in 2026. We've also, as you just highlighted, beaten our costs guidance that we gave for 2025.
The beginning of the year, we guided to taking $1 billion out of our infrastructure costs within Moderna. We came in at taking out $2 billion in cash costs. Already ahead of the game, 1Q, we are on track to meet our cash cost guidance of $4.3 billion for the remainder, all of 2026. What we can control, we've been really controlling. There are factors that aren't necessarily fully under our control that will contribute to growth in 2027 and 2028 to ultimately get us to that break even. Those include approvals. I mean, we do have a flu PDUFA date coming up later this year, which I'm sure we're going to talk about. The data there looks great.
We're working very well with the FDA, there are approvals that will also play into that growth, reaching that growth, as well as continued cost containment. For 2027, we've guided to $3.5 billion-$3.9 billion in cash costs, another reduction in 2027. Those are the things we'll control and make sure that we do get to that break even in 2028.
Okay. I believe intismeran is not contemplated in the break even. That would be an additive.
Intismeran, we're expecting to hopefully see data from the phase III study. There are approval timelines that go into effect as well, as you know. We do think there's a possibility we'll see the approval there in 2027, the first year of launch won't be a meaningful contributor in 2027 to get us to the 2028 break even. Hopefully will be some sales from intismeran as well.
Okay. Maybe circling back on flu that you mentioned. You've got your PDUFA date later this summer. It got an RTF, and then that was pulled back. Marty Makary is resigning. Not saying that there's a direct line to be drawn there, but it did create, I guess, some uncertainty around the U.S. revenue build here. I guess, what are your expectations around, you know, when this could become available in the U.S., and, you know, how do you sort of see this playing out in terms of approval sequentially, thinking about a combo in the U.S. as well?
You're right. There was some uncertainty with a change in administration. Every year, any time there was a change in administration and changes at regulatory bodies, one should expect some uncertainty. I think 2025, when we entered 2025, there was a tremendous amount of uncertainty that we had to deal with, yet we got through 2025 pretty well. We had three products that were approved, and we came in at the higher end of our guidance that we gave on the third quarter earnings call. I would characterize that as Moderna really having a strong collaboration with reviewers and scientists at the FDA, including, you know, those that are higher up as well. To see some more of that continue in 2026 is something that we will try and stay ahead of.
Going back to that very strong relationship with, you know, FDA, the career FDA folks that are there, I think is testament to us navigating through some of this uncertainty. Coming back to flu, as you mentioned, we do have an August 5th PDUFA date. We're on track to hopefully see what that result is in terms of a thumbs up or a thumbs down on the approval. The data speaks for itself. We showed 27% better vaccine efficacy versus the standard of care there. We're hopeful that August 5th is when we'll see that PDUFA date go positively for us. That will be another data point that suggests that our relationship with the regulator is pretty strong.
Okay. I guess, how have your interactions with the agency evolved over the past year? I guess, are there any near-term PDUFA timelines or review interactions that, you know, are being affected in practice?
As I just mentioned, it's been a pretty collaborative two-way street with the FDA. Other than to say that we have that PDUFA date on August 5th, there isn't much more to say on that. I think the collaboration is something, you know, that I just talked about is one that, you know, we're pretty proud of.
Okay. In terms of, I guess, sentiment, and this is going to be a Hantavirus question.
Cool.
Moderna's technology has always been, or has had the capabilities to be kind of first mover for any emerging pandemic. I feel like that's just being reiterated with hantavirus. Obviously, you had something in the works, I think, since 2024, I believe. Maybe you can just speak about that program and sort of what we're seeing, Understanding that it's still sort of a evolving situation.
Yeah. You're right. We do have an early program, it's preclinical, that's in collaboration with the U.S. Army Medical Research, as well as through our mRNA Access program. We've allowed for access to our technology to major institutions around the world. In the case of hantavirus, it's with Korea University. They have an innovation center, hantavirus is one of those viruses that, you know, the WHO ranks as high potential for becoming an epidemic pandemic. The whole realm of pandemic preparedness is what mRNA Access is also trying to accomplish through that program. This early stage program that we have, I think could be something that gives us a leg up should hantavirus turn into something a little bit more serious than what we're all reading about in the headlines.
I mean, we see a lot of things in the headlines about Hantavirus. Is this another COVID? I mean, it's a fundamentally different virus in terms of the R0 and spreadability and how it's transmitted. I guess, how are you thinking about this as being a potential, you know, public disaster like COVID was? Is it maybe something that's a little bit more isolated?
That's a great question. I think we're still learning a lot about hantavirus. There is some speculation that there is human-to-human transmission once somebody does have, or is infected with hantavirus. It is particularly from rodents, is my understanding, 'cause they're the carriers of the virus, and once you have exposure to you know, their excrement, then it could be something that you have to worry about. We have heard, you know, from recent headlines that there is a possibility of human-to-human transmission. All of those things, I think, are gonna be what regulators and health agencies around the world monitor. And we'll continue to monitor that as well. The key point you brought up, which is being ready for something like this, is what where the world is today.
owing to what happened with COVID, and having a technology like mRNA technology as well as an early program in development, again, preclinical, that gives the world a leg up on potentially avoiding something like a major pandemic.
Yeah. Yeah
in COVID.
Well put. I want to circle back sort of on the European combo approval. That was a recent positive update for the company. You know, the European market does have the potential to be a large growth driver with the pandemic era contracts expiring. I guess, you know, with mNEXSPIKE and COMIRNATY approved in the EU, how are you sort of seeing the European market evolving in terms of your up to 10% revenue guidance this year? When does the combo kinda add to that top line growth?
Yeah, great question again. For 2026, we do not have mCOMBRIAX contributing to, or even mNEXSPIKE from the EU contributing to the 2026 top line, and so you shouldn't expect any contribution from the EU for 2026 growth at up to 10%. You did mention the competitor contract that lapses later this year, and so it will make 2027 an open opportunity for us, and it's a fairly large respiratory vaccines market in the EU. Based off of demand, we believe the COVID market is $700 million in sales for the EU, $1 billion for flu.
Roughly $100 million or so for RSV. We'll be entering 2027, as you just mentioned, mNEXSPIKE is approved in the EU, mCOMBRIAX, the first approval in the world for a combination flu plus COVID vaccine, is also approved in the EU. We have RSV approved. The flu standalone program is actually being reviewed by the EU regulators, so we may be in a position to have that product approved as well, and that would be our fifth product that's approved globally. It gives us two things. One, the competitor contract lapses, so the market opens up for us. We'll have a full portfolio to offer the EU territories, we're looking forward to competing in that market.
As of the end of 2025, sales from the EU was less than $100 million, so even if you assumed a fairly modest penetration or market share in the EU, you would see still meaningful growth coming from the EU once 2027 hits and we're competing in that respiratory market.
Okay. Great. Appreciate the color on the timing piece. I guess when we think about the launch preparedness in flu, this feels like kind of bread and butter for you guys, but it's kind of an established market, right? Whereas RSV was like you're building that out, COVID was like the pandemic funneling into an established market, but flu feels kind of like the first established market launch. How should we sort of think about the trajectory there, and how does this get positioned versus, say, you know, some of the approved flu vaccines?
You're right, flu is a competitive market. We feel we're entering that market with a very strong profile in our vaccine. I'll remind everyone, we showed roughly a 27% relative vaccine efficacy, relative to standard flu vaccines that are on the market. That already positions us pretty well for that enhanced market, for that highly vulnerable population, older adults, and people who have medical issues that might want a little bit better coverage in their flu vaccines. We'll be entering that market, which wouldn't include the standard flu vaccines, a little bit more limited in terms of who's competing there. Given the profile of this vaccine, plus having it be part of a portfolio of vaccines that we'll be selling to our customers, I think will position us well for that market.
It's a fairly large market, the flu vaccine market. It's $6 billion worldwide, with the U.S. making up, you know, roughly half of that. We look forward to the launch. You're right, it's competitive, so we'll see what we can do there.
Okay. Okay, great. I do want to shift gears and ask about oncology now. We're all eagerly awaiting the intismeran adjuvant melanoma update. The five-year data look pretty compelling, roughly a 50% reduction in relapse or death. I think this is kind of the context for the ASCO presentation later this month. For the phase III interim, expected later this year, I guess, what is the sort of statistical framework? What are the hazard ratios that give you early success versus, you know, continued blinding?
Our partners, Merck and Moderna, have not discussed the statistical plan for the trial, I'm unfortunately not going to be able to say anything about that. We do think on timing, it's going to be in 2026, and that's been the guidance all along. We look forward. We're just as anticipatory and anxious about that data and want to see that data as all of our investors are as well.
Okay. I think the phase II-B show, showed a median RFS of like 19.4 months, if I'm remembering correctly. Would that be kind of a win?
The phase II data-
Yeah
an absolute home run. That would definitely be a win. Is it the hurdle you need to have in a product that could be successful on the market at the end of the day? Probably not. I would like say if you looked in the sea of other oncology products that are approved, you'd often find hazard ratios of 0.8 as products that are approved, and that's oftentimes in relation or with a control arm, with placebo. Not an active comparator. Which a hazard ratio of 0.8 means there's a 20% reduction in an event or death happening. In the case of our phase III, at the end of the day, if we, you know, had a 0.8 hazard ratio, would it still be a meaningful clinical impact for patients?
We believe so, because it's on top of a very good active comparator in KEYTRUDA. That would still be a meaningful result for patients.
Okay. That's helpful. I guess, in a few weeks at ASCO, you'll have, like I said, five-year data, I believe. Anything specifically that you think, you know, bodes well or sort of informs what we should be looking at from the phase III?
We've already released the top line data of RFS, and we said the hazard ratio was sustained at the five-year mark as well. You know, a 49% reduction in having a recurrence or dying if you get the combination of intismeran and KEYTRUDA. That already kind of tells you. You know, when I get that question, Alex, I often think to myself, other than the durability, now out to five years, continuing to see that hazard ratio, which we all know and is gonna be presented at ASCO as well, can you glean any more from that phase II?
I feel like the phase II result in and of itself at three years and the top line at five years kind of tells you a lot of why we're, and our partners Merck, are excited about potentially having that phase III readout. Is there anything more you'll learn? I know that outside of the Kaplan-Meier curves, and this has already been released with the abstracts, there will be some translational data. This is speaking to the mechanism. We've announced is fully enrolled and has been now fully enrolled since the second quarter of 2025. It is one, as you mentioned, where KEYTRUDA also works.
A lot of the development programs that are under this broad development program within intismeran is to really exploit that synergy, if you will, with INT plus KEYTRUDA, because we do believe there's that synergism in terms of how the two act together or, you know, behave together. KEYTRUDA has shown positive results in RCC as well. It felt low risk to go after that type of a tumor because KEYTRUDA has shown a benefit already. If this is true synergism with intismeran, then we would expect to see that follow through in RCC and all the other cancers that we're developing this intismeran program in. Despite being less tumor mutation, having less tumor mutational burden, we do think that's one that could be interesting.
It's a phase II randomized study, as you pointed out, an N that is nearly twice the N of the phase II in adjuvant melanoma. In terms of whether or not it serves as a registrational study depends on the strength of the data and also conversations we have with regulators. We're looking forward to that data readout as well at some point in the future.
Okay. On your 1Q call, you disclosed that your partner, Merck, recently launched a new study in stage one lung cancer. That's basically the very earliest population in combination with KEYTRUDA. I guess, does this, in your view, kinda signal confidence from Merck in the program or continued confidence? Obviously, they've been confident in it.
Yes.
You know, how should we be thinking about this new study start in the context of all the other studies you have ongoing?
Definitely continued confidence because it already was a very broad development program. As you know, this is our third non-small cell lung cancer study that we've started. I think it does speak to how committed Merck is to this intismeran program. It is a 50/50 joint venture with Moderna. They're splitting the costs and resources, all of that, evenly with us. The other thing I'd say from, you know, personally, I'm actually super excited about this study because it gives intismeran two opportunities to win. What do I mean by that? This is a three-arm study where you've got in one arm intismeran plus KEYTRUDA, in one arm intismeran monotherapy, the final arm, the control arm, of placebo. Because in s tage one non-small cell lung cancer, the standard of care is watchful waiting.
After you've resected the cancer, you're just waiting for a recurrence if, hopefully it doesn't happen, but if it does happen. You've got now two active arms with intismeran in it, so two opportunities to win in that study. I'm super excited to have the ability, through this study, to offer patients active and proven, through at least the phase II studies that we've conducted in adjuvant melanoma, to show meaningful clinical benefit with intismeran plus KEYTRUDA. It's as well as intismeran by itself. It also speaks to another thing that, you know, both Merck and ourselves have been pointing out, which is the safety profile of intismeran and the combination of the two, intismeran and KEYTRUDA. There isn't any overlapping toxicity that you see oftentimes with other IO/IO combinations. You just don't see that with intismeran plus KEYTRUDA.
That offers us this ability to move earlier into the earliest stages of disease in the case of non-small cell lung cancer in the Stage I setting. The risk-benefit there is something also that I think is another reason why Merck and ourselves felt very comfortable moving as early as we did.
Okay. That's helpful. I want to ask about mRNA-4359. This is your 100% owned cancer antigen therapy going after IDO and PD-L1. The IDO component of that we haven't seen for a little while, but it shows some pretty encouraging, I guess, initial activity at ACR earlier this year. I guess, maybe you could walk us through sort of the emerging profile for that therapy. I guess, what sort of efficacy signal would be sufficient to move this into pivotal study?
Yeah. Great question. You're right. This is wholly owned by Moderna, off-the-shelf antigen therapy, cancer antigen therapy. We are targeting epitopes of both PD-L1 protein as well as epitopes of IDO1. The mechanism that we're using, I know when I speak to investors about IDO, they recall the small molecule approach, back several years ago that did not actually have a successful readout. Here, we are teaching your T cells to look for epitopes of IDO1 as well as PD-L1. We've learned a lot from INT and how we can teach your T cells to look for neoantigens in the case of INT. Here, it's epitopes of those two proteins.
The data we've seen so far, and we've now turned over the cards from the phase I study at ESMO last year, we showed some pretty compelling early, still early data in highly refractory patients. People who have had multiple rounds of therapy, some three lines plus. There we were able to show close to two third overall response rates in a highly refractory patient population. Most recently at AACR, which is what you asked about, in the phase II portion of that study in frontline melanoma patients, we've seen the ORR now of 83%. 11 out of the 12 patients, or 10 out of the 12 patients have now had a meaningful response rate. Again, very encouraging. This is still, you know, a handful of patients of data.
I think if David Berman, who just joined us here at Moderna, were here, he'd say he'd want to see a little bit more quantum of data in a few more you know, many more patients, to actually then move this forward. We're running the phase II, so let's see if this data consistently holds up as we've been finding with this program, then it will be ripe to move into the later stages.
Okay. Great. Maybe in the last minute that we have, I want to ask, in terms of the burn vis-a-vis investing today in the Moderna of the future, do you feel like you've rounded a corner on that kind of seesaw of trimming expenses to a point where now you feel confident in, you know, building out the pipeline further or doing external BD or additional partnerships? I guess, what are sort of where are we in that continuum leading up to 2028? I guess, what are the investments that you're comfortable making today to build Moderna for the future?
Yeah. What a great question, and I'm gonna probably take more than one minute to even answer it. The key thing to note that, on that kind of rounding out on the cost side, many of the phase III that we ran up until, you know, the last one that we'll be doing in the infectious disease arena is the norovirus vaccine study that also has a readout in 2026, by the way.
Once those phase III are done, that cost is largely behind you because the maintenance cost for infectious disease vaccines is probably 10%, maybe 15% of sales, a lot more manageable. That large cost that you needed to make in order to get the product on the market is behind you. In oncology, the cost of a late-stage development program pales in comparison to infectious disease vaccines, phase III studies costs. That's largely driven by the N, the number of people you have to have in your studies. In infectious diseases is tens of thousands of patients. A phase III in INT is 1,000 patients. Even though the cost per patient might be a little bit higher, the number of the N in those phase III studies are so much lower that you can handle the cost.
If the future for us is now going into cancer as a big therapeutic area and other therapeutic areas that don't require large clinical studies like infectious diseases do, and now we have this commercial portfolio that's coming to market, all of the R&D costs associated with that is behind us. We still can now invest without the quantum of investing being as large as it should be for infectious diseases and have a plethora of opportunity from oncology and other therapeutic areas going forward.
Okay. Very good. With that, I know we're over time, really want to thank you, Lavina, for the great conversation. Thanks everyone for attending.
Thank you.