Good afternoon. Welcome to Barclays Global Healthcare Conference. My name is Gena Wang. I cover biotech. It is my great pleasure to introduce our next presenting company, Moderna. With us today, we have Lavina Talukdar, as SVP, Head of Investor Relations. So Lavina, I think we don't need to have an overview. Everyone knows Moderna very well. I will start with COVID revenue, regarding 2024 guidance. You know, you do give a guidance of $4 billion total revenue, and within that, you have, say, $1 billion is from a COVID APA, and there are $2+ billion in U.S. revenue, and an additional $1 billion is ex-U.S. COVID plus the RSV and the international COVID, right?
Maybe starting with APA, how confident we are with this $1 billion that will be executed in 2024?
Well, thank you, Gena, for having us. I'm delighted to be here. And you're right, so we gave guidance for COVID this year of $4 billion in total, and that includes, just as you said, international contracts signed with a number of companies that amount to $1 billion. And those are signed contracts, so we'll be delivering against those contracts in the second half of this year for that fall season in the Northern Hemisphere, mostly. The second bucket is a revenue guidance of about $2 billion in the US, and that is to similar kind of uptake to what we saw in the 2023 season for US COVID sales. And then, that third bucket with additional international COVID sales plus RSV makes up the remaining $1 billion.
And in that international COVID bucket, you see, we're having conversations with other countries not included in the APA that we talked about earlier. And that includes the EU, for instance, with who recently opened up a tender process that we said we would be participating in. And that tender process is for up to 36 million doses for up to 4 years each year. And so that process is still very early currently, but that would be an example of what would go into that bucket. And then also, as you mentioned, whatever our revenues are for the RSV launch later this year.
Good. So maybe I'll start with the EU, since you brought up, you know, 36 million doses up to four years. Is that every year, 36 million?
Well, up to 36 million.
I see.
So, you know, in all fairness, it could be 0-36 million doses. And when we know what that process looks like, 'cause it's still early, we've, you know, we're participating in it, it's all early. That's the update that we have at this point in time.
Okay, and that will be every year?
Every year.
Okay. You know, what could be the pricing like in the EU compared to the U.S.? During pandemic time, I think that their price is actually higher than the U.S., right? From the commercial perspective, we have $130, right?
29 for the U.S.
Okay, yeah, and net price maybe in the $90 range.
We haven't said what the net price is.
Okay.
It's just based on the contracting season.
Mm-hmm.
You know, typically, within the vaccine space, you can assume anywhere between 30%-50% discount off of that list price-
Mm-hmm.
-in the U.S. market.
Mm-hmm. So then if we use that price as a benchmark, how the Europe price will be like?
So this is a tender process.
Mm-hmm.
You know, pricing comes into that play, that conversation as well. We haven't said anything.
Mm.
But it's safe to assume that it's not gonna be near the U.S. price. Yes, it's safe to assume that it's not gonna be, like commercial pricing in the U.S.
So if we use Pfizer price, because they were being launched in Europe, right, even 2023. So, like, would that be a good benchmark for your price as well?
With that, we haven't really given guidance, and we've said anything about what that tender pricing may look like. But as a fair assumption for modeling purposes, you should think pandemic-like pricing, plus or minus, some percentage.
Okay. So that will be like $30, plus, minus $35, plus or minus?
During the pandemic period, ex-US APAs were ranging anywhere from the low $20s to the high $20s, low $30s.
International. Okay. Okay, so that would be a good benchmark starting point. Okay, good. And then for the US part, last year, if we look at the 2Q , that's $1.7 billion. So what makes you confident this year is going to do more than $2 billion or around $2 billion?
So good question. So last year, the number that you see, reported as revenue from the US also includes our assumption or estimate of return reserves. And since it was the very first year that we were entering the commercial market, we took a pretty conservative stance in terms of what those returns may end up being, which is, again, all packaged into that $1.7 billion in revenue. So as we gain more experience in terms of what, you know, level of shots were actually used in the marketplace, like we saw last year, we could get to a more, which reality, you know, closer to the real return number.
And over time, that should get even more stronger in terms of the predictability of those returns, which could get us to, you know, closer to the $2 billion, and that's just kind of mechanical. The other important thing to note is that public health officials in the U.S. have been pretty disappointed with the uptake of COVID vaccines, given that the burden of disease for COVID is still 3-4 times higher than the hospital patient rates and burden of disease versus flu or RSV. And so, as a result, I think there's gonna be a big push from public health authorities to get the message out there and really educating people on why it's important to get your annual COVID vaccine so that we could see vaccination rates kind of trend up. Is it gonna go where flu is today, this year?
Unlikely, obviously, but it could trend higher.
Okay. And then you did say you have a very conservative in terms of, you know, reserve, return, reserve, right? So can you share the numbers of that? And I know it's in the 10-K, right?
It is in the 10-K, and the number in the 10-K that we've shared includes a return reserve, but also some additional fees in there as well. But the vast majority is for return reserve, and it's in excess of $500 million.
You think about this year. If you now have a much better understanding, what is the real world, you know, the realistic return?
The reserve.
Yeah.
So we're still gonna be collecting data this year as well to see how this season goes as well. Over time, it should get stronger and stronger. I can give you, you know, what that return reserve is. Over time, we'll get a better sense of it as more and more years go by, and we have additional data. But I can give you a proxy for flu, and typically in the flu market, return reserves can be in that 10%-20% range.
Very helpful. Maybe also ex-US, what additional countries do you think that there could be potential upside other than Europe?
Yeah, we just talked about the EU tender.
Yes.
We are in active conversations with other countries around the world. Some examples include, you know, regions in the Middle East as well as South American countries. Japan is also something that we look at, despite, you know, I think everyone knows this from our Q4 call, we weren't very pleased with the performance in Japan last year, but it is still a potential for this year.
Okay, good. Now another important component is RSV. So maybe I will talk a little bit more on that, you know, also, since ACIP meeting, and I just share updated data with the GSK and Pfizer using their own analysis. CDC did analysis season one, season two, the data would look very different from the clinical trial data, and they did see smooth trial from GSK, you know, the data after season two, actually efficacy, VE rate is much lower than Pfizer's. Previous, every also thinking GSK is the best, Moderna may be the second, and then the lowest will be Pfizer. Now, when we look at it, actually now the dynamic change. So maybe from your perspective, you know, like how do you see, you know, your RSV data, also shared at ACIP meeting in February?
Will CDC also do similar analysis on your data? What is your expectation for approval? I know the PDUFA date is in May.
Sure. So the ACIP meeting that just took place, at the end of February, did review some data from our competitors. I think the best way to think about it is that when all three of the vaccines went through the 2022-2023 season, where we saw an unusually strong RSV season, every single the vaccine saw a drop of roughly 20 percentage points. And that can be due to the very strong force of infection during that season. And so the best way to look at the data by, really kind of background is of when trials were enrolled, what seasons the original cuts of data were done in, is the neutralizing antibody titers.
And when you do that, from what we've seen from some of the competitors, as well as our own neutralizing antibody titer level, those graphs really look like they're on top of each other. So at day 29, for instance, all three vaccines show an 8- to 10-fold increase over baseline for RSV neutralizing antibody titers. And then at month 12, they all kind of are around that 3-fold higher than baseline level. So that particular analysis on neutralizing antibody titers will probably be the best way to compare, because none of these studies were done head-to-head, and cross-trial comparisons are very difficult, would be the best way to kind of look at the data. And so far, it looks like all three competitors are showing similar neutralizing antibody titer curves.
Mm-hmm.
In terms of your other question on, you know, the PDUFA date, that we remain confident that we will be approved and in time for the June ACIP meeting, which will then allow us to get to market by the fall of this year.
So now, you know, giving the update, I know that's also up to CDC discussion. Like, do you foresee this as a once every two years vaccine, or do you think it's actually giving, I think the CDC did their own analysis, and the data slightly different from clinical trial data from all, you know, most companies. So since the VE dropped so much in the 23% range, like, do you think that actually CDC will recommend once a every year dosage?
So you're right, that is a CDC ACIP recommendation. And I think what they'll do is collect data-
Mm-hmm.
Before making a decision on frequency of vaccinations, and that can come in a number of forms. So as I was just talking about, the neutralizing antibody titers, I think would be one of the ways that they would collect the data to try and figure out a correlate of protection. And so to what level of antibody does, do you then get a vaccine level of X, for instance? Once they've established that correlate of protection level from the data from ourselves and competitors, I think that will help them decide on the frequency of vaccination. And so they may set a level of 60% or 50%. You know, it really is up to them.
And that level of antibodies is when, you know, depending on when you get to that level of antibodies, I would say this is when it makes sense to have another vaccination.
Mm-hmm.
So there's that data. I know that, some of our competitors have shown revaccination, you know, at 12 months. We're also running a study of, revaccinating participants from our phase 3 study at 12 months, and also at 24 months. So as those data come in, that will inform the best decision on, vaccination schedule RSV. So it doesn't feel like there's a rush to do it, you know, either at the next it could potentially come at the October ACIP, but it could also move into 2025. And the rationale for why you could wait that long is, you know, the penetration into the U.S. marketplace right now, it's really just 10%.
So you still have 90% of the partial population or the market, that it doesn't matter what that vaccination schedule is, because it would be the first time they're getting it this year, for instance.
Okay. I know you don't have a real world experience yet, but have you seen any Guillain-Barré syndrome in your clinical studies?
Yeah. So no, we have not seen any GBS in the phase 3 study. But also, we ran a co-administration study where we were testing our RSV vaccine, co-administered with our COVID vaccine in one arm, and then another arm, we were co-administering our RSV vaccine with a marketed flu vaccine as well. And so we also didn't see any GBS in that study either.
Okay. Now, since you know you are very close to, you know, approval, how's your launch preparation there? I think there is some pushback on how could Moderna compete with GSK and Pfizer both has a very big footprint in the vaccine space, put the COVID aside?
Sure. So but, you know, the experience in COVID does actually help in the RSV setting, because it is the same, commercial infrastructure, the same people, that we'll be speaking to, in that retail pharmacy space. So our experience in COVID is highly leverageable for RSV. And having delivered for our customers in the COVID, first commercial COVID season last year, I think builds up these strong relationships that we have made. And in the retail pharmacy area, which, you know, is at least 75%-80% of the market, it's a good starting point, to have those strong relationships, when we're going into this RSV market.
How many doses will you prepare, you know, before, like, the season starts?
So the good news is that before the season starts, we should be through contracting, and we'll have a view on, you know, what the contract will yield in terms of volume that we need to make. So, as in the case of COVID, we only really needed two months' notice, if you will, in order to fulfill supply needs in the market. And I think it'll be similar for RSV. We'll have a view into what the contracts look like for 2024, prior to actually launching the product, and we should be able to, you know, meet the supply needs.
So what would be your ideal? Of course, you know, the larger market share is better, but what would be like realistic market share you think you will gain, given, you know, second to or third to the market, to the market of the two drugs already on the market?
I think it would be fair for people to assume a third of the market. Obviously, we wanna do better than that, but being the third player on the market, and again, as you pointed out, pretty big, big companies and competitors, a third of the market is a good assumption. Obviously, we wanna do better than that.
Okay. Now move on to flu. Maybe any update before any, any conversations, maybe about the approval path for, you know, based on the current data?
... So we're still in discussions with regulators around the world, really. And since we're in the midst of those discussions, we typically don't even talk about, you know, discussions with regulators, but our intention is to file once we have, you know, those discussions conclude. But let's see where those discussions go.
Okay. So when will be the time you will share, the update with us?
As soon as those, you know, discussions kind of wrap up, and we have a sense of what the next steps are, we will, you know, share that information.
Like, are we talking about 2Q or?
In 2024 , you know, we should have a view in 2024.
Mm-hmm. Okay. So will not give more color than that. Okay. I think now we have another question, more like commercial perspective. Like, where do you see that, you know, if fast forward, you have a flu or RSV and a COVID, three vaccines, like, what would you think will be the major uptake? Do you think the combo, if you have available of a combo, would help you gain additional market share, or you think that each individual, that will be sufficient?
Yeah, that's a great question. We actually are big believers in the combination strategy for a number of reasons. One is the combination does offer many benefits to different stakeholders. So for a payer system, for instance, eliminating the administration fee for you know an injection or a vaccination is something that you know with millions of doses could be very meaningful in cost savings for the medical system. Most people don't wanna get two shots if they can get one and be protected from two or more viruses. And then physicians like it because compliance is very high with combination vaccines. So we do think that the combination strategy is one that will help us gain market share. It could also be margin improving because you have two vaccines in one vial or one prefilled syringe for instance.
And that is, as you know, the fill finish or the glassware is the most expensive part of the manufacturing process. So we're very much excited about that combo approach.
Good. Maybe switching gear on your cancer vaccine program.
Sure.
So any potential, I know, you know, through your Merck partner, is enrolling melanoma phase III studies. Is there any sense how soon that phase III enrollment could complete?
Well, we're very pleased with how enrollment is going so far, and I think that's part of commitment that both Merck and Moderna had to really stand up that study as soon as possible. We've been enrolling that study now since the summer of last year, and as more sites come online, you know, typically enrollment gets better and better. So we're pleased with how enrollment is going there. I think that presenting some of the data at major medical meetings like AACR and ASCO really gets the word out there in terms of what we've seen from the phase II studies thus far. So there's a lot of buzz in the medical community as well. So we're very pleased with how it's going thus far.
If you were to use a proxy, 12-18 months is typically what it has taken some of the other checkpoint inhibitors to enroll their studies, and that was against placebo, where this is against an active comparator and the standard of care. So somewhere in that range is when we're hopeful to see full enrollment of our phase 3.
Okay. So which means sort of the, could the end of 2024, the complete enrollment could finish?
It could finish, yes.
Yeah.
Hopefully, the end of twenty-
I think the reason I'm asking is, because one of the conditions you could file accelerated approval is complete enrollment of ongoing phase 3, and of course, the manufacturing status, durability data you're collecting. So maybe manufacturing part, you know, how ready you are, and then that translate. The next question is: How realistic or how soon you thinking you could file accelerated approval?
So in the minds of Moderna, there are really three things we were waiting for to even ask the question for accelerated approval. And that was, you know, looking at that second cut of data, which just happened at the end of last year, that really speaks to the durability of INT. So that's, you know, if you wanna consider it a check mark, data looks great, so check there. The FDA actually wants to see the phase 3's up and running and substantially enrolled.
Mm-hmm.
Not necessarily full enrollment-
Mm.
but substantially enrolled, which is a subjective term, but as I said, the enrollment is going well, and we're pleased with it. And then the third is really a Moderna hurdle, if you will, where we wanna make sure that in the event that we do have accelerated approval, we wanna be able to supply the market. So what we've been doing with our Marlborough facility, which was one that we bought for the purpose of INT build-out, this was spring of last year. For a good part of the last year, we've been building that facility out. So there are stages that, you know, the executive committee looks at, and so far it's been going pretty smoothly, you know, getting through the stages we want to get to.
As soon as we get to a level of manufacturing, you know, completion around the Marlborough facility, that's when we think we'll be in the best position to approach regulators about that accelerated approval, which again, could potentially happen in 2024.
... Okay, so that could be as early as 2024 completion. Okay, great. I know we don't have too much time left. I do want to ask one question that I get lots of investors, especially our shareholder, ask, and I wanted to urge to ask this question, is that how you can cut your burn, so that you can turn into profitable a bit early, you can have extra cash reserve? I know right now you have a very strong cash position, but, you know, the revenue is trajectory at giving how much you spend for the R&D cost. So is there a way to cut the cost? And how much actually the R&D cost is essential, say, for the late stage clinical development?
Yeah, so all very good questions, and so let me unpack that. We did say to, to the street that we're aiming to break even by 2026, and that's really predicated on a number of things, which is we'll look at what the revenue line looks like at that point in time. Our R&D costs are, for this year, $4.5 billion. And if you assume that the R&D costs for next year and the following year, that makes sense, you know, and like what we've done in the past. And so that $4.5 billion, most of it, you know, a good portion of it in 2024 and 2025, are committed to like larger phase 3 studies that are either ongoing, ready, or in the plans. And so, in 2026, however, less of it is committed.
So we could then look to prioritize our pipeline, pace it out, you know, defer some programs, really depending on what that top line looks like, if it's necessary. We could also look at partnerships for the pipeline and even project financing. So there are multiple that we can get at making sure that, that promise of breaking even is something that, you know, you've got to know that we take very seriously for 2026.
That's very good. Thank you very much, Lavina.
Thank you so much for having me. Thank you, everyone.