Good afternoon, everyone. Thanks for being here. Welcome again to TD Cowen's 44th Annual Healthcare Conference. My name is Tyler Van Buren, Senior Biotech Analyst here. For this session, it's a privilege to have a fireside chat with Moderna. And from Moderna, it's my pleasure to introduce Stephen Hoge, President. Stephen, thank you very much for being here.
Thanks for having me, Tyler.
If you guys have any questions during the fireside chat, feel free to raise your hand. I'll do my best to get them asked. We're going to start with COVID, even though it's becoming a smaller part of the story, I feel like we have to start there. To level set, you guys have mentioned that you'll have $4 billion of vaccine sales guidance for 2024. It'd be great if you could start just by briefly breaking up those components for us.
Yeah, for sure. It is good to be back here with you again. So thanks again for having us. Naturally, we'll talk about COVID. So the $4 billion, there's really three big buckets to it. The first is U.S. sales. I'm sure we'll talk a little bit about vaccination rates in the U.S. because it is a big driver for us as a business. The second is we have a number of advanced purchase agreements. These are multi-year agreements or even current-year agreements where governments outside the U.S. will purchase for their whole populations or portions of their populations. And then the third, and this is a little bit newer from last year, is we do see some markets where last year we weren't commercializing. Europe is an example where there's been an issued advanced purchase agreement-like agreement, joint purchase agreement from the European Union.
There are opportunities for us to enter into new agreements and then therefore commercialize there.
Okay. And I guess following up on U.S. sales specifically, COVID vaccinations, I believe this past season were around 40 million and it was 50 million the prior season. Yet the guidance assumes roughly $2 billion of U.S. demand-driven revenues versus $1.7 billion in 2023. So how do you guys expect to kind of maintain or potentially actually increase COVID vaccination rates in 2024?
Yeah. So, get to the U.S. point. I think it's an important one. But overall, one thing I want to say on the first point is that if you look at our $6 billion, a little over, $6.8 billion revenue, about $6 billion product sales last year, about $4 billion of that came in the second half. And as we know, kind of in the middle of the year, we really transitioned to what we think the endemic market will look like. So I do think that $4 billion representative. Now, on the question of the $1.7 billion of that, that was U.S. There were a number of things about the U.S. launch of our product and our competitors' products that were a little suboptimal for respiratory vaccination.
Probably the most obvious is that they were approved because it was the first year of them being approved a month later than flu vaccines. Traditionally, people get their flu vaccines starting in August. Really, September is a big month. October is a big month, and then it tapers out. In the case of the COVID vaccines, because they were really rolled out at the end of September, we lost that whole month. We were still selling, as you'll see from the publicly reported data, the IMS data and others, that we were still selling in December and November. And so in some ways, we lost a month of that season. And we do see it as an opportunity. It's almost 20%-25% of the selling days.
And we also lost a lot of people, we think, that came in to get their flu vaccine early in the season, quite motivated, and maybe for whatever reason, didn't make it back to the pharmacy or the doctor's office for that booster. So we see upside in the current year because there's going to be approvals, we think, much more in line because it'll be a second year with the respiratory vaccines. And if you listen to public health officials, whether regulators or CDC or others, everybody's trying to align those things and really treat these more the same going forward. The other thing I'd say is that those same public health officials, CDC and ACIP, which make the ultimate recommendations of who should receive the vaccine, that also happened later last year because it was the first year.
But if you look at the ACIP meeting just this past week, there's much more now. Normal course, standard, people who will get this booster, high-risk people, as was recommended last week, should get it twice a year, 65+. And so we think that more normal, standard messaging will allow people to prepare and ultimately provide better vaccination coverage, which is really what public health and we want to achieve.
Okay. Yeah, that's great color on that month. I mean, obviously, if you guys are able to increase it or certainly maintain it this year, I think it's reasonable to assume that that will continue. But last year, I was impressed by the fact that you guys increased the market share from 37%-48%. I don't think people were necessarily anticipating that, especially given the fact that the share was pretty consistent during the pandemic. So how were you able to take share from Pfizer once it became a commercial market?
Yeah, well, 48% is good. It's putting it in the middle. We always hope to do better. But I think a number of features. One, we always thought we had a really strong product, great efficacy, great profile, even the prefilled syringe that we're provided. We thought we'd answered a lot of questions. The structure of the market before was actually all government purchased, and in many cases under multi-year agreements. And so to some extent, the distribution and market share was never a natural market share. It was the share that existed as a result of those agreements. And again, remember that in 2021 and 2022, we were supply constrained. Essentially, our products were being shipped globally to many markets, and there were some limitations on what we could offer.
I really think that the 2023 experience that you just referenced is the first natural market that's existed. Maybe not surprisingly, it sort of emerged as currently a roughly 50/50 split between players. We'll keep working that out against each other, I'm sure.
Okay. By the way, we had a vaccines panel the other day, and the KOLs did say that the prefilled syringe is a big deal, which is a good segue into RSV, where you guys will have the prefilled syringe. And there, Pfizer has definitely got outcompeted as well by Glaxo. So from this first season, what do you think are some of the key reasons why Glaxo has done so much better than Pfizer and RSV?
So we weren't commercializing and in the market, we weren't talking to customers. So I really couldn't give you any insight. I do think that some of the things that you just referenced, we think are strategically important and have informed our strategy. So I'd underscore them, which is the overwhelming majority of the RSV vaccine market is going through the retail channel, pharmacists, the same people doing flu and COVID. And that makes sense. And those are places where labor and prep time matter. And if you think about how busy your pharmacists are, when any of us have been in CVS or Walgreens or any of the pharmacies around the world, even smaller, you see huge numbers of lines, you see a lot of work.
If you can decrease the labor input that people have to put into delivering the healthcare, you're going to get better outcomes. Prefilled syringes are part of that in our case. But I would note that Pfizer had a 9-step process with 2 different prefilled lots of things that had to come together. GSK had a 4-step process. Steps really correlate with labor. Obviously, a prefilled syringe is a 1-step process. We think we will help with a pain point that exists there. There are other things that happen, contracting, developing the market, obviously marketing activities. Obviously, I don't have any insight there into how that worked out between the two prior competitors and the customers.
Okay. You referenced the recent ACIP meeting. I listened to it. In my opinion, it seems like they always want more data and they're fairly noncommittal to come to conclusions. But I would love to hear what some of the highlights were for you from the meeting.
Yeah. A few things. I think if you pull all the way back, clearly there's a view that RSV is a real burden of disease, and there's a desire to get more people vaccinated against it. And there is debate about what's the best way to accomplish that and how do we position the recommendation. But if you're looking at the percentage of people that ACIP would really like to see vaccinated against RSV, we're still in the early stages, 10%-20%, and trying to push that up. I think the second thing is there's a view that RSV vaccines, like flu and COVID vaccines, are going to wane. The timing of that waning is the open scientific debate. And I think we need to all produce data to support it.
But for that reason, it makes some sense, this isn't nearly surprising, to get your booster, to get your vaccine closer to the actual respiratory virus season. And I think that that was something that I heard start to emerge in conversation. None of that should be terribly surprising. That's how flu works. That's how COVID works. And we think RSV will work that way. There is a question about, obviously, the frequency of boosting. And I think that that will take more data to resolve. But I think there is general acceptance that it's not one and done because you're seeing these 20% decrease between years, between many other products over time in the vaccine efficacy. And obviously, that's something you can fix with boosting, we think. I think the last thing I'd say is there's obviously a healthy discussion on safety.
Because anytime you're making a recommendation of a vaccine, benefit-risk is important. And I think there is abiding concern on, fortunately, very rare, but still signals of GBS that have emerged in the other two companies' trials and is present in some of the follow-up data. It does not change their recommendation of the benefit-risk. These are fortunately very, very rare events. But it is something that will continue to be a topic of discussion as they firm up their recommendations and get more, maybe even prescriptive and suggesting that certain populations really absolutely should. And hopefully, over time, we hope that is a pretty broad recommendation. We're quite pleased that so far, quite fortunate so far in our clinical studies, we have not seen a GBS signal. But at the end of the day, it's a place that I think ACIP and public health will continue to monitor closely.
Okay. Also on our vaccines panel, the KOL said that all three vaccines have enough durability to cover the season. Do you think it'll be annual dosing or every other year dosing for the vaccines?
So the correct answer to that one is it's really for public health to decide because they have to also decide from a health economic perspective, what's the right answer for them. If you just ask it purely from, do I believe that boosting annually will increase antibody titers? And do I think that's the right correlative protection? Yes, I do. But I don't think that that's the only factor that goes into a determination. So is there incremental efficacy and therefore prevention of RSV from an annual booster or even a two-year booster? Yes. I believe the data is starting to support that. Certainly, when you look at the antibody waning and correlative protection data across all three companies, I think there's evidence of that. But the ultimate recommendation is a recommending body, NITAG in the United States, at CDC and ACIP.
They have a number of other factors they'll want to look at too, which is, what's the incremental benefit of that?
Yeah. What's the approximate level of protection in the second season versus the first season for most of the vaccines? It's a fraction, right?
Incremental.
Sorry, like vaccine efficacy or protection in the second season versus the first season?
Yeah. So if you look at really all three, what you see is as you progress six months from a primary analysis or into a second year, you see maybe a 20-point drop. Generally, you're thinking in the 80s down into the 60s. In one case, you're thinking in the 60s down into the 50s. But it's a meaningful decrease in efficacy. It is completely correlated with the decline in antibody levels. We think those antibody levels are ultimately doing most of the protection in respiratory viruses. Again, you can look at that glass half full, glass half empty. I think last year, ACIP looked at it glass half full, which says, wow, we still have 50% efficacy in this second season. That's really good. Maybe we don't need to do anything more. I think over time, that will continue to wane.
And then there's the question of whether 50 versus 70 or 80 is the right objective.
Got it. So just to wrap things up, you guys reiterated your belief that the RSV market in the elderly is $6 billion-$8 billion. And I guess this year, Glaxo and Pfizer did what, just over $2 billion or around $2 billion-ish? So I guess it needs to go up 3x-4x. And that is primarily through just increased penetration of people getting vaccinated. What do you think are the most important factors to increasing vaccination rates in RSV?
Yeah. I think like the COVID situation, it was the first year. The recommendation was a little bit permissive. They wanted to go generate more data. But I think we still saw a really good uptake. I mean, I think in many ways, that $2 billion market that you just referenced really was a positive surprise in the opportunity. It certainly supports if you trend that thing out and say over the next few years, we're going to drive towards that better vaccine coverage rate, you can imagine how $6 billion-$8 billion starts to become a reasonable estimate. I think the things that will support that over time as a market opportunity will be vaccine coverage rates.
And I think that is about firming up those recommendations, getting clearer on which populations will benefit, and maybe moving out of things that sound more like we recommend, but talk to your doctor, to where we are with flu and COVID, which is really there's a benefit here. You should go do this. And I think that will drive us more towards hopefully flu-like coverage rates. But I think appropriately, public health will take the time to decide when they think that the data is there to support that. It's still early days. The other thing that will happen is reboosting. Of the $2 billion of sales that happened last year, how many of those people are motivated consumers? And in talking to their doctors, say, you know what, I've got a bunch of other medical conditions. I don't even want that difference in efficacy.
I want to be protected. They'll come in for RSV vaccines. Because the more this becomes annual, the more that really will just grow.
Yep. Okay. Let's move to flu. So for flu, what is the nature of the ongoing FDA discussions? And what do you have to sort out prior to a filing by your end?
Yeah. So a couple of things I'll say. We're talking to many regulators, not just FDA. And because those are all different stage of conversations, and obviously, we want to get to a common view across, I don't want to get into the details. We haven't discussed about what the details of those things are. But conceptually, the kinds of things that we talk about in pre-submission meetings is understanding what data is necessary to support the file, what durability or what duration of follow-up, whether it's safety or efficacy or otherwise, are necessary to support that filing. And if there are any other questions on comparator or other work that we need to do, that we make sure we get that done. We moved very quickly last year.
If I point to the phase III studies that we ran, we pivoted, as you know, to a second-generation flu vaccine that included improvements in the B antigens. In the middle of the year, ran the study, and then actually announced the result, I think, by September. But it's important. That was a day 29 endpoint. That's not six months or 12 months of follow-up. And importantly as well, we wanted to support that with more data looking at other comparators. And so we actually—it's on clinicaltrials.gov, but we had follow-up groups that we enrolled in that study. So it's an ongoing clinical program. And in some ways, we are building the best data set we can to address the questions with regulators. But I'll reserve the privacy of those conversations for now.
Understood. So flu, I mean, clearly, you guys were there at the beginning of the formation of the COVID market. You're there very close to the beginning of the RSV market. One could argue taking share of a growing market that's being established like that is a little different from something like flu. It's more mature, segmented, kind of entrenched players. So how do you guys plan on taking share in flu over the long term?
Yeah. So there's a mid-term, long-term component. And I think I'll start with the long term was your question, but I think we can get to the mid- to short-term. On the long term, we hope we have the best product, full stop. We need to generate data that shows that. And over time, we need to demonstrate that there are advantages to messenger RNA platforms that have already shown up in COVID vaccines that actually can be present in flu vaccines. What are those advantages would be? We've talked publicly about our ongoing research. We've actually shared some data on multivalent flu vaccines. So changing the strain selection so that you have a more diverse set of strains, and you get, we think, better protection against the circulating strains. A 1011 program has 2 H3s, for instance. Also, making later strain selections. It was interesting.
The whole WHO group and folks are debating where we are going to make COVID strain selections in the sense, I think, in the communities is going to be in May, and that May or June, like it was last year. Flu is happening in February. And everybody knows there's no reason why that's better than doing later. And so over time, we hope the ability to make later strain selections better matched, and particularly in mismatch years, potential for better performance. So we do believe we have the right platform for respiratory vaccines. And we do believe that over time, those things will long term will help build that story with data that we have generated. I think in the short to mid term, at the end of the day, you're contracting on a portfolio.
The three big high-volume vaccines that are moving into many channels, and a lot of this, as we said, is the retail channel in the United States and other places, is other channels. But in the United States, retail is, it's COVID, it's flu, and it's RSV. We expect to be maybe the only, maybe the first player to have all three, and therefore can solve a portfolio problem. We will have all three in prefilled syringes with very similar sorts of labor and other benefits. Over time, we think, or in the short to mid term, we hope to compete by actually being a pretty good service provider and maybe a partner of choice for the retail chain.
Why is it apparently relatively easy for you guys to have prefilled syringes for your vaccines and difficult for the others?
Well, again, I can't speak to what others' challenges were because I don't know. But I can talk to our advantage is that all of this works on the same platform technology. It's essentially the same four ingredients at the same manufacturing facility, as you know. And therefore, for us to do a prefilled syringe is something that we can do across all of our platform. Once we've solved the technology problem once, we actually then just roll it through. There are different platform technologies out there. Things like recombinant protein, things like the RSV vaccines that are recombinant protein, sometimes other viruses, they sometimes have to be freeze-dried. It's called lyophilized. And that requires reconstitution. When you freeze-dry something, you have to put the solution back in. And so obviously, that becomes a limitation because that's a feature of the product.
Okay. To round out the respiratory vaccine discussion, the 1083 next-gen flu/COVID combo reading out later this year, what do you need to show in that to have confidence in filing for approval?
We have to demonstrate statistical non-inferiority against both of the comparator vaccines. That's our COVID vaccine and flu vaccine. We're also looking at enhanced flu vaccines in different populations. So it's pretty straightforward from an immunogenicity perspective. There's criteria out there. They're the same sort of non-inferiority criteria that have been established elsewhere. The lower bound can't be below 0.67. Point estimate has to look favorable. We saw that in the phase I/2 data that we shared earlier. So we're optimistic that we'll see that in the phase III. The second thing is we have to show good safety and a favorable reactogenicity profile. At the end of the day, our goal, and this was the data that caused us to move forward into phase III, is to present this as a convenience option.
So what we'll be looking for in the phase three is safety data, reactogenicity data, and the immunogenicity data. If it looks like where we are in the phase one two or any sort of non-inferiority to the two shots, we think we will have the product that we've always wanted. We'll move forward to filing.
You think it's possible you could have it ready by the 25, 26 season, or by the end of next year with the so you could have both the combo and the flu monotherapy?
For sure, it's possible. I think we have to be realistic that there's a number of conditionals in there. And so let me just make sure I'm clear. Obviously, the data has to be positive. There has to be not any concerning signal that requires further follow-up, like letting the study run another three, six months, whatever that would be. Regulators will have to agree on the submission timelines. And we'll have those same sort of meetings we're having with flu. And then, of course, we have to get those submissions done. And the review process probably needs to be expedited. It doesn't necessarily have to be record-breaking. But there has to be a public health view that this is worthy of some acceleration in order for it all to happen in time for the launches to be in a good part of 2025. We think that's possible.
We think all those things are possible. And again, if you look at different markets could have different answers to that. I think we have a good degree of confidence. But there are a bunch of conditionals out there. Step one for us is get the data. And then we'll clarify step two, three, and four.
Okay. But you said it's possible, so.
It is possible.
All right. Okay.
Mathematically. It's not like you have to believe in something. You don't have to believe in something that's unprecedented. It's just a bunch of things have to happen very efficiently.
Understood. Oncology, individualized neoantigen therapy. On the earnings call, you noted that you guys need to have enough follow-up discussions with the FDA. phase III needs to be sufficiently enrolled. You need to finalize or have the Marlborough manufacturing facility set up. So where are you at on those fronts?
Right. We've been talking about you and I have been talking about INT for a bit. Yeah. So again, I'll be a little bit coy because we haven't got it on some of those specific time horizons. But I think we all see the durability data as, oh, that's exactly what we would have hoped. And with that confirmation of durability and now past three years, really, the statistics getting pretty unequivocal in that durability data, we see a real benefit and a real need to lean in. The enrollment of the phase III is the next big step, right? And so we're making great progress. It is enrolling quickly. We and our partner, Merck, have not communicated publicly about the timeline on that. But if you were to ask what does great look like?
What does our ambition look like without a guarantee of where we're going to be? When in this population, folks have enrolled similarly sized phase III studies really aggressively. Think about what BMS did or even what Merck has done and some other stuff. 12, 18 months is something that's been seen. But more normal can take a little bit longer. So you can assure yourself that we're aiming at as aggressive as possible because we think we need to do this. But that's not a guarantee that we'll get there. And we're still in the early part of that window. So we're working hard. And we want to be we want to be successful in enrolling the study quickly. But lots more updates throughout this year, frankly, as we do that. On the manufacturing site, I think we've been similarly working hard to establish that site.
You know this, but more broadly, this isn't a product you can make anywhere. So individualized medicine, you make it for one person one time. It is scaling down, not scaling up or scaling out in the way that traditional pharmaceutical manufacturing work. And it has to operate for the economics to be really attractive. It has to operate incredibly efficiently. So what we prioritized starting well over a year ago was that we don't have a product to even intend to launch until we build a purpose-built facility that can operate incredibly efficiently with favorable economics and can deliver high-quality products. And that is the licensed facility initially for the world to launch. We've been working on that. We made great progress. We bought the Marlborough facility. It's up and running. The shell's there. Anybody who drives by can see it.
There's lots of activity and people in it. We're completing out that manufacturing. Our intention is to qualify that site and bring it in line to our clinical research. We are very aware of wanting to align the timing on both the phase three and the site. But we're still on both of those in the beginning of that exercise. And we don't want to make any firm commitments yet. And so we'll keep updating as we go through the year. But we're making really good progress on both fronts. And we're actually optimistic that we'll make substantial progress this year.
Understood. Yeah. If I'm not mistaken, you guys started that trial last summer, right? July, maybe. And so 12-18 months would be by the end of the year. If you can get the facility done by the end of the year, that'd be a great outcome.
I think getting these things done by the end of the year would be a great outcome.
Yeah. Awesome. So Adjuvant Melanoma opportunity, what's your latest thinking on the magnitude of that? I mean, obviously, Keytruda's, what, on average, $150,000 a year. You guys aren't obviously going to guide the pricing. But how do you think about the opportunity for you guys in Adjuvant Melanoma?
I think when we start to see the benefit that you're seeing, where you're seeing a hazard ratio reduction that's as good or better than what you see with Keytruda alone, it's important to say these products are going to be different, right? And so they're different products. They're additional. And we hope that that incremental hazard ratio will provide an argument for a similar health economic benefit. We'll have to show that. But if you look at what, for instance, Keytruda, our partner's product, or other PD ones are doing in the adjuvant melanoma context, it's $2 billion. And that gives you a sense of the kind of benefit that we're providing and the kind of opportunity that we hope we have or the economic opportunity that we hope we have with our partner, Merck, for providing that health economic benefit.
Without going into all the RFS rates for the audience, I believe the combo versus Keytruda had a better hazard ratio than Keytruda versus placebo, right?
Correct. Yeah. Yeah. So our Distant Metastasis-Free Survival hazard ratio was 0.35. It's a 65% reduction. And the related distant metastasis or death, the hazard ratio on any relapse that can include a small local relapse, so that's happening a little more frequently, is 50%. So we're seeing pretty dramatic reductions in the residual burden of disease. And you're right. Those numbers are trending better than the prior placebo comparator.
30 minutes is not enough time, unfortunately. We weren't able to get to the phase three CMV trial readout by the end of the year, which is an exciting opportunity, as well as the orphan programs and several others. Just maybe you could wrap up by discussing what you think is the most underappreciated aspect of the story by investors right now, even if that is the phase three CMV program.
Well, it could be the CMV. I think if I were to point out one thing is what you said up front, which is Moderna still there's a lot of talk about COVID, COVID vaccination rates, where are we going to be this year? How are we going to make that revenue? But if you look at just the phase III pipeline and the near-term filings for approval, even just across what we're talking about, and we didn't get to CMV, and we didn't get to other programs that are in pivotal studies now, including some rare disease stuff, we're moving into them very quickly.
I think the underappreciated thing is to the extent to which that we have used the last 3 to 4 years to dramatically diversify and expand this pipeline to a scale that we think in the next years, very shortly, months to years, starts to demonstrate the power of this platform. And we'll turn us into a very, very different-looking company. The news flow alone is going to be all non-COVID in the pharma pipeline side. And so we're pretty excited by that. We know it's a show-me year for us, both on the commercial side. We got to do it again. And hopefully, a little bit better with our and then add RSV to it and on the pipeline side. But we actually think we're in a really strong position strategically.
That's great. Thank you for the awesome discussion.
Thank you.