Ladies and gentlemen, thank you for standing by, and welcome to Moderna's conference call. At this time, all participants lines are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during this session, you'll need to press star one on your telephone. If you require any further assistance, press star zero. I would now like to hand the conference over to your speaker today, Ms. Lavina Talukdar. Please go ahead, ma'am.
Thank you, operator. Good morning, and welcome to Moderna's conference call. Today, we will discuss the award from the Biomedical Advanced Research and Development Authority, or BARDA, to accelerate the development of mRNA-1273, our vaccine against the novel coronavirus. You can access the press release issued yesterday evening by going to the investors section of our website. Today on this call, we have Stéphane Bancel, Chief Executive Officer, Stephen Hoge, President, Tal Zaks, Chief Medical Officer, Juan Andres, Chief Technical Operations and Quality Officer, and Lorence Kim, Chief Financial Officer. Before we begin, please note that this conference call will include forward-looking statements. Please see our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements.
We undertake no obligation to update or revise the information provided on this call as a result of new information or future results or developments. With that, I will now turn the call over to Stéphane.
Thanks, Lavina. Good morning or good afternoon, everyone. Thank you for joining us. I propose that I'm going to quickly summarize a few key points of last night's press release, and then we'll take your questions. I would like to cover two themes. One is, of course, BARDA and the BARDA grant, and two is a quick clinical plan update. On the BARDA front, let me start by thanking the BARDA leadership, the administration, U.S. Congress, and U.S. Senate. As many of you have followed in the last few weeks, the government has moved very quickly to enable several bills that were partially funding BARDA through HHS.
As you know, we have been working in the past with BARDA for the CAR grant, which was, of course, very helpful to know the leadership of BARDA and for them especially to get to know the Moderna team, the capabilities we have, the platform, our site. We are very thankful and humbled by their support. As you saw in the press release, the grant that is up to $483 million is going to be a big accelerator to the development of mRNA-1273. The grant covers basically two chapters. One is the development of mRNA-1273 up to that includes the multiple studies that will be run, and of course, the material that will be prepared by Juan's team to run those studies and all the cost and preparation of the BLA readiness filing and so on.
The second component of the award is very critical for our ability to supply as many doses as we can, as fast as we can, in parallel to the clinical plan, without waiting for the de-risking from a typical phase I, phase II, phase III. BARDA is awarding some considerable capital so that we can work on the manufacturing process scale-up, so that we can increase our scale in production as fast as we can so that we can maximize the output. We're very thankful for their willingness to fund the development plan. Because of the magnitude of it, Tal and the team will be able to really partner and interrogate as much as we can different subpopulation and really scale quickly the size of those studies to potentially speed and the velocity that we would not have achieved alone.
The ability to invest that risk is also, of course, extremely enabling, and we're thankful for the government to be willing to take such risk so that we can maximize the potential success of this product. As part of this, we've also announced that we will be adding up to 150 new team members to Moderna to make all that work happen between now and the end of the year. As you can imagine, mostly in clinical development, clinical teams, clinical operation teams, regulatory teams. Also teams in research for assay development and so on, process development for process scale-up, and so on. On the clinical plan update, which we communicated in the original phase I, which as you recall, was three healthy adult cohort, young healthy adult, 18 to 55 years old.
We are announcing that it's fully enrolled at the 25, 100, and now 250 microgram. We are announcing that we are expanding to 6 additional cohorts. 3 cohorts in an older population, 51 to 70 year old, and yet another 3 cohorts in an older population, 71 year old and above. As you can appreciate, we are eager with the NIH who is running the study to learn as much as we can from a safety standpoint and immunogenicity standpoint in different populations. Given the different population that are most vulnerable to a virus. Our plan is still to start the phase II study in the U.S. in a future time frame.
With that, I would like to thank our teams who are really working around the clock and now have been working seven days a week for three months, because we know every day matters in this fight against this virus. I would like to thank our partners. Dr. Tony Fauci team at NIAID have been really wonderful to work with, both in preclinical work and in the clinical teams, and of course, the BARDA teams, who are very happy to have this new partnership with them. With this, we'll be happy to take any question that you have. Thank you.
Thank you. As a reminder, to ask a question, you'll need to press star one on your touch-tone telephone. To withdraw your question, press the pound key. Again, if you would like to ask a question, press star one. Our first question comes from Matthew Harrison with Morgan Stanley. Your line is open.
Great. Good morning. Thanks for taking my question. I guess two things. One, could you just sort of outline where the expansion is going to take place? Is this a physical expansion or is this just more steel tanks, et cetera, at Norwood to be able to scale up? The second thing is, maybe you could just comment a little bit on what has allowed you to expand into older individuals and to enroll these additional cohorts in the phase I study. Thanks.
Thank you. I'll take the first one. Our plans are both. We are going to be expanding in Norwood, the capacity as we scale up. We are going to be expanding also with a partner CMO that we will announce shortly, both in the U.S. and outside of the U.S.
Matt, this is Tal. Let me take your question on the expansion into adults. I think really there's two factors here. One is the totality of data that we've had on our platform, both pre-clinical and clinical. I think the other one is having enrolled fully the adults and being able to look at the safety there, is the primary engaging here. I would defer sort of the granular questions to the team at NIH, and I give them a lot of credit for pushing the envelope here on behalf of all of us.
Thank you.
Thank you. Our next question comes from Ted Tenthoff with Piper Sandler. Your line is open.
Hey, thank you very much. Good morning, everyone. Thanks for the update, continued progress and all the hard work you guys are doing. I'm just trying to get a sense. This is really fantastic to see the government moving so quickly behind you to support your efforts. I want to kind of come back to something we talked about a little bit at the vaccine day, which is sort of how this could emerge as either stockpile or commercial opportunity. My question kind of has to deal with both either overseas government as well as the U.S. government in terms of stockpiling sort of in the first wave. Maybe you can kind of just give some early thoughts on how that could evolve. Thanks so much, guys.
Good morning, Ted. This is Stéphane. That's a great question. As you have observed in the past for different outbreaks, different governments around the world have decided what clinical studies were happening to basically pre-order stockpile product so that in case of success, they have as much product as they can ready to be distributed in their geography. This grant does not include stockpiling. As I said in my remarks, this is really funding clinical development studies and material and the process scale-up. As we potentially enter into discussions of stockpiling with governments at the right time, we will give updates, but this grant does not include stockpiling.
Thanks, guys.
Thank you, Ted.
Thank you. We have a question from Salveen Richter with Goldman Sachs. Your line is open.
Good morning. Thanks for taking my question. With regard to the COVID trial, could you just talk about the dose level and cohort sizes of the six additional cohorts here? If you're not going to higher doses, why not, and what you hope to learn in the older population?
Yeah, this is Tal. Thank you, Salveen. Similar sizes and same dose levels such that we're testing the 25, 100, and 250. Why not go higher? I think it's based on the totality of data that we've seen so far from our clinical trials. If you sort of connect the dots, perhaps the most affirmative one was CMV, you can see a very nice dose response curve at about 180 to 300 there it seemed to plateau. Recall that CMV actually has six different mRNAs in one. Realistically, the amount, because they're More or less equal weight. The amount there is about 30 micrograms, really, if you look at that mid-level 180.
If you go back to the history of our simpler vaccines, the ones that are monomeric in nature, pre-fusion proteins, whether it's RSV, H7N9, H10N8, we seem to be hitting the stride sometimes as early as 25 microgram, up to 100 in the case of H7N9. We seem to have plateaued with a very nice response. I think finally, it was just this week that you saw the Zika data. It looks like it was so long ago now. Already at 10 micrograms we see that we've got immunogenicity. I don't think based on the totality of our expectation that going higher than 250 is likely to be warranted.
Now we'll be looking at the data, and as this has been enrolling on a stepwise fashion, as soon as we get a sense for the immunogenicity, we may choose to go and expand the bracket either up or frankly down. We may have overshot with an initial dose of 25 micrograms. I think based on the totality of the data, we expect this is where we'll land. Your question about the elderly is salient. We have some experience there in our RSV already. That was the first trial that we did with Merck. There was already an elderly cohort there. It's not a prime boost, it's really a boost scenario, but still had elderlies. I don't think our sense was that as far as that antigen and this technology, there was a difference in the immunogenicity we were able to elicit in the elderly.
Great. Tal, if I could just follow up. Do you still expect safety data in the spring and then efficacy data in the summer? Can you just help us understand what you're really looking for here for this to be a positive result?
Yes. I think what we're looking for this to be positive are two things. The first is to demonstrate the ability to induce neutralizing titers, significantly so, consistently so, and to understand the relationship between the dose and the ability to do so. The second element is going to be to try and understand what level of those neutralizing titers is relevant for the expectation of protection. That will rely not just on this trial, but on all the correlative work that's happening in parallel work streams, whether it's looking at convalescent serum or various animal models to sort of connect the dots. If you've got neutralizing antibodies, and this is their quality, and this is their quantity, what is the expectation in terms of protection? That effort is obviously going to be more challenging.
It's just started a couple of months ago, and so we're in the early days of that. It's the combination of these two data points that I think are going to be informative in the first instance for the potential benefit of this vaccine. In the second instance, just looking at neutralizing titers to the degree that we get a sense that those levels are significant, they're consistent, and that they happen in the majority of the population, and we understand the relationship between the dose and the ability to elicit them, that in and of itself should allow us to start trials with clinical endpoints in the late summer.
Great. Thank you.
Thank you. Our next question comes from Cory Kasimov with JP Morgan. Your line is open.
Hey, guys. Thanks for taking my questions. This is Matthew on for Cory. Just to follow up to Salveen's question, for the patients dosed so far in the phase I study, just wondering if you've seen any data to suggest an induction of neutralizing titers in patients.
Hey, Matthew. It's Tal. That's the question we ask every day. It's early days, and as soon as we have a cogent body of information where we're able to share it, I'm sure we will, as will the NIH.
Okay, great. I'm just curious, of the award total, what portion is earmarked for development versus manufacturing?
Yeah, this we have not disclosed, Matthew. This is confidential information between the government and Moderna.
Okay, great. Thanks for taking my questions.
Thank you.
Thank you. Our next question comes from Geoff Meacham with Bank of America. Your line is open.
Hey, guys. This is Alec on for Geoff. Thanks for taking our questions. First question from me. Could you maybe detail how much of the manufacturing scale-up you expect to be covered by the BARDA grant? Will this funding get you through the completed build-out, meaning you'll be able to then produce millions of commercial doses? How quickly do you think this will happen?
Let me take this one. What we are doing is scaling up the process in addition to producing in parallel for the clinic. The scale-up that we are going to be completing, the first stage we have already done, which is beyond what we did for phase I. We are going to that one, and that one is in the pocket. The next one is what we're going to be doing in the next few months with this grant, and that will define the scale, which we will replicate in a number of different places as we install the capacity. That would go very, very quickly as soon as we have the targeted scale. Just as a reminder, our process is cell-free, so it is not traditional biotech. We don't need huge bioreactors in order to go and build.
Once we define the target final process, which we are confident to achieve, we will be able to replicate in a number of different nodes.
Okay, great. Thanks. One more if I may.
I would jump in.
Oh, yeah.
I would jump in that the BARDA grant is not funding the replication of those nodes, the build-out of additional capital equipment.
That is correct.
It is meant to fund the scale-up.
Got it. Maybe one last from me. Could you detail the two-year base period of performance, and how much of the $483 million is included in the first two years, and sort of what the gating would be to get the full option exercise for the 5.5 years?
Again, Alec, it's Stéphane. We don't disclose details like that. As you can imagine, this is a typical grant, which is based on success. As you can appreciate, if the vaccine, God forbid, was to fail in phase II, the cost that is earmarked for a phase III, of course, will not be paid. Of course, we'll not want to use taxpayer money if we don't need to. We just gated on success. Those are just the typical gates you will see in this type of work. Nothing more.
Okay, great. Thank you.
Thank you.
Thank you. We have a question from Yasmeen Rahimi with Roth Capital. Your line is open.
Hi, everyone. Congrats on the amazing update that you provided us with, and thank you for your continued hard work against the fight for COVID. Two questions for you. First question is, can you share with us what is maybe the rate-limiting step when we think about taking manufacturing to millions of doses? The second part of the question is, are there any components or elements of the manufacturing that you could outsource, even though you guys are amazing doing everything on your own, just to expedite production? Thank you for taking our question.
Thank you, Yasmeen. Good morning. In scaling up, it's all about integrating the different pieces. There is not one single rate-limiting thing. It is bringing the scale, bringing the equipment, bringing the process. We are doing all of that in parallel, including the raw materials. We are working very close with our partners, suppliers, and contractors to be able to do that. I want to thank them as well for being so close to us. As I mentioned before, yes, we are thinking to expand beyond Norwood. We are starting, and we have the fantastic capability there that allows us to go much faster as we replicate. We are going to be working with other partners, both at the manufacturing end as well as with aseptic agents.
Thank you, and keep up the great work.
Thanks, Yasmeen.
Thank you. We have a question from Hartaj Singh with Oppenheimer & Co. Your line is open.
Great. Thank you for the questions. I also echo the thoughts on all the great work. Just a couple of quick questions. One is on, again, on COVID-19. In the press release, the BARDA director, Rick Bright, is quoted as saying that we could shave off a few months of development in COVID-19 vaccine. Stéphane and Tal, with this scale-up, are you still thinking it's 12 to 18 months, assuming proper clinical development pathway and this crisis doesn't get worse? Do you think that you could actually shave months off of that 12 to 18-month timeframe that people have been thinking about? Just got a quick follow-up on other vaccines.
Thank you, Hartaj. Let me take that. This is Tal. Look, every day matters here, and we're looking at months, weeks, days, in some cases, hours, as my colleague Juan likes to remind me. The reality here is that the pace of development will depend on our ability over time to expose subjects who are at risk of getting infection, and our ability to do that in places where we can demonstrate versus a placebo that indeed there's a clinical benefit. That's at least as far as the clinical endpoints go here. The ability, as I was mentioning earlier to Salveen, I think the ability to demonstrate potential benefit based on antibody levels, we should be able to see that this summer, but that will be very early in terms of development, and the safety database at that point is going to be limiting.
This is a long-winded way of saying that I think it'll take the totality of the understanding both safety and efficacy and a dialogue with the agency to align on what is the minimal data package that should enable us in the context of a benefit risk where the potential benefit is so huge given the unmet need out there, what would be the right amount of data to enable broader use, and how do we, in a stepwise fashion, enable that broader access to the people who need it the most? I think I'm really happy that we have good collaborations with the U.S. government. BARDA has shown up with their experience. They've been set up to exactly think about these kinds of problems.
Obviously, having different arms within the same department, HHS, it's going to have to be a conversation with BARDA, with the CDC, with the FDA, in terms of looking at the data as it emerges. Our responsibility is to demonstrate the clinical benefits, de-risk the safety database as we go along, as fast and as diligently as humanely possible, and that's what my team and I are going to be focused on.
Great. No, that really helps, Tal. With this support from BARDA, does this give any insights into a potential, for example, emergency use? I know that that's been a pathway that the FDA has rarely taken, but might be appropriate in this case. Does this contract give any additional insight into either emergency use based on, let's just say, phase I data, neutralizing antibodies, or not really?
Hartaj, it's a fair question. This is not what the contract deals with. The concept of how one would deploy this is going to depend on two things. The scale-up, which is not part of this contract as I'm sorry, not the scale-up, but the actual supply agreement, as Stéphane had alluded to. The discussion on emergency use is going to be an evolving one that will take those aforementioned parties together with us as the data matures to make that determination. It's on a case-by-case basis, depending on the data and the need that is going to exist at that particular moment. It's very hard to predict today.
Yeah. No, I think that's fair. Last question is just on the other vaccines, with CMV and stuff, with the scale-up going and the tremendous amount of support and focus from Juan's team, just any thoughts on the other vaccine programs? I assume that barring any unforeseen circumstances, the manufacturing and everything there is just going along as needed. Thank you for all the questions.
From a clinical development, absolutely yes. I'll let Stéphane answer the rest of it.
Yes. It's a good question. On the rest of the pipeline, the supply keeps moving. As you know, we tend to be making things ahead. Recall we made another phase II of CMV. We're ahead of starting the phase II. We've already mentioned that we've been already working on the phase III material for the CMV. Thankfully, given the scale of Norwood, we can accommodate the rest of the pipeline as well. We'll have to think, and that's the thing we mentioned, is we have not communicated yet how we plan to expand beyond Norwood. When we'll be ready for that, we'll of course communicate. We are all highly aware that if a vaccine gives good safety and efficacy data over time, every additional dose is going to be extremely important.
The team is extremely focused on how do we maximize Norwood first, because that's really the best way we can have short-term impact, including the process scale-up that BARDA is funding, but also how potentially do we expand beyond Norwood. We have nothing to communicate about that at this stage.
Great. Thank you for all the questions.
Thank you.
Thank you. We have a question from Alan Carr with Needham & Company. Your line is open.
Hi. Thanks for taking my questions. To what extent does this BARDA contract and maybe your COVID vaccine developments overall help Moderna in the long term with respect to other development programs? Is it just around manufacturing capacity, or are you learning certain efficiencies from this effort? How do you think this is going to impact Moderna in the long term, this experience with COVID-19 and the funding from BARDA? Thanks.
Yes. Let me take that one. It's going to impact the company in a tremendous positive manner. The analogy we have within Moderna is that we're going to grow in six months what it would have taken us four years to grow. It will be a bit painful and hard, and that's why we need to also add resources. If you think across the company from a regulatory standpoint, getting ready to file our first BLA, all the learnings that will be relevant to apply to a Zika, to a CMV, to all the other products. Same thing on CMC. As you all know, getting into a phase I is one thing, but getting the organization, the analytical method, and all the documentation and data to be able to file a BLA is another thing.
I think the infrastructure build-up in terms of capabilities around teams, IT systems, and as you know, digitally is very big focus for the company so that we can scale this platform across many products. It's a massive acceleration. We've also been talking about commercial. We should be able in the near future to give some updates there. We have commercial, and the other piece too is around government relationship. Being able to help governments that have thousands of their citizens dying, hundreds of millions of them getting sick, the impact on the economy. We think that being there to help, which is really the mindset we have and the attitude that we have, we want to be very helpful in all those discussions and be part of the solution, as diagnostics company are, as companies working on treatment, and as other vaccine companies are.
This is a big puzzle. We all need to work together. So all this learning across the company, all these capabilities we're going to build is going to be just tremendous for us as we roll out those products. We showed the Zika data on Tuesday that are encouraging in a clinic. This is now our seventh clinical data set in the vaccine front. We presented and introduced in February, a new vaccine that is the pediatric EBV. As we said on Tuesday, on the vaccine day. Stephen's team is working hard to work on the next generation of new vaccine that we wish to move into development at a later date. You have all the other modalities, including the IV systemic sampling.
The acceleration this is providing to the company, while it is complicated and while the teams have to do an extraordinary work because of the time compression, it is massively enabling. If again, everything goes to plan, and there are many ifs that could derail us, as we've talked about, but if we are able to file a BLA, let's say in 2021, and be commercial 12, 18 months from now. As you know, this is very different from the plan before Coronavirus. In the long term, this is going to be tremendously enabling for the company.
Thanks, Stéphane.
Thank you.
Thank you. We have a question from Mani Foroohar with SVB Leerink. Your line is open.
Yes, thanks for taking my question. It's a follow-up on a few of the questions around manufacturing and supply. Obviously, operating at the population, perhaps even one could argue species global scale, but would be necessary to address this should you develop a successful vaccine that's clinically effective, requires a lot of scale. Can you give us a little sense of the trajectory of your cost of goods for a potential vaccine? Does this relationship and investment reduce that? Beyond that, is another $500 million, does that cut your cost in half? Is another $1 billion required? What is the scale required to truly supply the global Coronavirus vaccine end market to the extent that it evolves to be as large as it essentially could be?
Yes. Thank you for the question. Let me take a stab at it, and, Juan Andres, if you want to add anything. The scale-up of a process, as you can appreciate, is an important impact on the cost of goods per dose. Because as we scale the plasmid process, as we scale the mRNA process, as we scale the lipid process, per unit of time in the same room, we should just crank many more doses. All your fixed costs of your labor costs, your depreciation costs, you just fixed. In the same suite for the same amount of time, you can make let's say 10x more product. You can do the math easily, because only your raw material then goes up just because of the quantity you have to make.
The impact across this product line and the rest of the portfolio, because of the platform, is just a massive acceleration of cost of goods reduction. On the scale-out, which is adding manufacturing nodes, as we said earlier on this call, we are working on it. We will come back when we will have more firm plans. We're going to really work hard to shoot for as big as we can.
Thanks. That's really helpful. I'll back it with you.
Thank you.
Thank you. I'm showing no further questions at this time. I'd like to turn the call back to Stéphane Bancel for any closing remarks.
Well, thank you very much, everybody, for joining us. Thank you for your support and your thoughts. Stay safe, everybody, and have a nice weekend. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.