That is going to be generating revenue. So that's very exciting. We'll talk about that in RSV. You just got back from ASCO, a long week at ASCO, talking about the pipeline and with a particular focus on the INT adjuvant melanoma data, three-year data. So that's pretty exciting. And obviously, a lot going on with financial guidance and trying to get Moderna back to a profitability standpoint and setting the stage for the next few years of growth. So maybe I would take the opportunity to ask you first, from a high-level perspective, the guidance this year, starting from a high level, 2024. You have guidance. Talk about the inputs in that guidance, the confidence in hitting that guidance, with a particular focus on what I think is the wild card, which is RSV.
Financial guidance and your approval with RSV, and how much is RSV going to contribute this year?
Terrific. Well.
It's your guidance.
Good to see you, Mike, and thanks for having us.
Yeah.
Thanks for your coverage and videos, including your new song. Appreciate it.
Very good. Very good. Next one, I'll get Moderna into the lyrics.
Appreciate that. Thanks, everybody, for joining and your interest.
Yes.
Yeah. So in terms of the guidance, maybe I'll just go through the categories that we've talked through in the past, which is our APAs, which we came into the year with $1 billion that we said. And we've learned our lessons on the APAs in the past in terms of not always being followed through. So we're hoping that perhaps there's a little upside there, but we're fairly balanced on that.
Clarify that. So in your APA guidance, that you've taken some handicap to that.
Correct.
Such that in prior years, if they didn't all come through, that would have been a miss.
Right.
But this year, 2024, because people have said, well, no one is going to give all of it, you've already actually included some of that discount into that.
Exactly. So if I go back to 2022, when I stepped into the role in September, we had estimated $21 billion of sales from APAs in that 2022.
Right.
We came in at $18 billion and deferred $3 billion into 2023. So there is this notion that deferrals can happen, and I think we've accounted for that in our guidance.
Okay.
The second category is the U.S. sales. Everybody is watching vaccination rates. I'm sure we'll talk about COVID. We've assumed a pretty flat market year-over-year because it has declined, and we're hoping we've hit a base. Perhaps there's reason for optimism of increasing vaccination rates.
Can I comment on that one?
Sure.
So U.S. COVID, so APAs is outside the U.S. You've commented that you've been more conservative on some of that if people don't follow through. On U.S., you expect equivalent or flattish year-over-year jabs.
That's right.
On there, people feel like, well, each year it gets a little bit lower. So is that a risk? You think it might actually be better? Talk about.
Yeah.
Why would it be better or why would it be lower?
Yeah. So maybe I'll talk about the long term for COVID. Who knows exactly what will happen in 2024 and 2025? But I think if you just look at the health burden of COVID, and we just actually, about 5 minutes ago, published a report, an annual report on COVID and our belief in what we think is driving the rates of vaccination rates and the disease. But if you look at the long term, if you look at the health burden versus flu, hospitalization rates, particularly in older adults, are 5x what it is of flu. And the vaccination rates are about a quarter or half of what we actually see versus flu. So if you have 5x hospitalization rates and half to a quarter from vaccination rates, it just doesn't make sense in the long term from a health burden perspective.
So again, I don't know exactly what will happen in 2024. It's obviously a politicized topic, but long term, I think science prevails here. So that's what I mean.
I hear you on that. Despite the fact that hospitalizations are 5 times higher, the vaccination rate is much lower. That doesn't make any sense.
It doesn't make any sense.
There needs to be probably better promotion or an understanding by the public to do that. Just to be clear, though, while you're guiding flattish, people feel like jobs may go lower, but you feel that it should be at least flattish.
That's what we're assuming in our $4 billion guidance.
How about RSV? So RSV.
That's the third category. Yeah.
Congrats on the RSV approval. A lot of nervousness that happened around that, but it did happen on the Friday. And so talk a little bit about your approval, the label, how competitive you feel, and how much will that contribute to your guidance this year?
Yeah. So it is nice to have a second product. It's wonderful to actually be able to sell a second product and not be a one product-only company. So in terms of maybe I'll round out the guidance then and answer some of those questions. So round out the guidance. The last $1 billion in the $4 billion was both RSV and other countries that didn't have an APA already signed for COVID. And we said that that combined was about $1 billion. We never guided an RSV-specific revenue target. But in terms of the product, I mean, we think it competes extremely well. We think from an efficacy standpoint, it is equivalent to the competitors. We think the presentation is terrific.
In fact, yesterday I was on with a retailer, the CFO and the head of the pharmacy group, and they are very encouraged by PFS and what that can mean for how they deliver RSV. We're encouraged by that and hope to be very successful.
So, since not everyone knows the acronym, so you guys, naturally, are on the phones, hitting the phones with major pharmacy people who are going to be purchasing this, and that you're having a good conversation and that the prefilled syringe, one-step process. I think the one step is thaw it.
Right.
Then open the cap.
Should already be thawed.
Should already be thawed. Then one step is open the cap. Can you compare and contrast how that would be with the two other players? It's GSK and Pfizer.
Correct.
I've actually literally pulled down the instruction manual on this and tried to do it. Kudos to these who do all this because they got to do it 10 times a day. My point is there is multiple steps. Now, that said, when we looked at it, GSK and Pfizer have sort of gotten it down to sort of like four steps. Like one of them, I think Pfizer is nine steps, but then they turn nine steps into four steps by literally just changing the numbers of the orders. I swear to you, it's nine steps, which have gone to four steps.
I've read it.
If you count the steps, it's still nine steps. Can you just compare and contrast? Because four steps doesn't seem that hard. What does that mean?
I mean, it's a lyophilized product, so you have to mix it and swirl it and then take a jab and make sure.
Measure it out.
Measure it out. And so that is prone to error or breakage, and that is cost. And if you talk to the retailers or any customer for that matter, they have two things that they care about. One is their ultimate cost. And that's not just the price of the product. That is how we deliver on time. That is the number of returns, making sure that they have the right amount of inventory because it takes money and time to actually have a return. And they're also interested in how do we increase vaccination rates and marketing the product. So that's what we're spending on. We have a lot of creative ideas to drive vaccination coverage.
And so when you combine the PFS and being, I think it's one-fourth the amount of time it would take to actually administer or deliver a dose, as well as our marketing efforts, that's why we think we are competing pretty well and have good relationships. And we proved that a little bit with COVID. So in the U.S., we had 50% market share last year, thereabouts. And that was our first time actually ever competing commercially. So we're encouraged by that, and we hope that continues going into RSV.
So again, getting into the nitty-gritty, but this is happening right now as you guys are on the phones. You're having contracting conversations. Literally, contracting is critical to getting this done. How does that work? It's basically three, four, five major pharmacies, CVS, Walgreens. They're on the phone trying to allocate the volume this year for the winter to the three different players?
That's exactly right. So we think there's 8 relatively large retailers, and then there's a long tail. And so we are now talking to those now that we're able to sell the product. Beforehand, we could only talk from a medical perspective on what the product would look like. But now we're actually contracting and talking about, hey, what that share looks like, what's the price look like, and hope to resolve that in the coming months.
How does what should our expectation be from a share and price perspective?
I'll talk long term. It's a bit TBD for 2024. So long term, I mean, we see no reason why we shouldn't be equivalent share in the long term, based upon all the reasons I just talked about. So that's, let's say, 33% share since there's three of them. In the short term, we'll see. Again, did well from a COVID perspective, but that was one competitor. We are obviously third to market right now. They were here for the last year. So we'll see what that turns out in the short term, but in the long term, we are very encouraged.
Okay. And also coming up is the ACIP meeting later in June. What should our expectation be for Moderna's recommendation? And importantly, I believe you may present the further second season data. And what should Wall Street's expectation be around what that looks like? And does that matter for how you think about whether Moderna will be a single shot or every two-year shot and how that plays into the profile of your drugs? So ACIP recommendation and what should we expect?
We are expecting and hoping to be on par with our competitors from an ACIP perspective.
Which is one jab.
One jab.
For people above 60.
60 years old.
Yeah.
Correct. And then over time, we will bring additional patient populations to market. So that's in the future, but this year, over 60 years old. And so we believe we'll be on par for all the reasons I talked about, efficacy. In terms of the durability, I know there was some data out around our 8.5-month time period, but that was because when we performed our trial, it was in the midst of a very severe RSV season. And when you look at the data after 2 years and you look at the efficacy drop or the antibodies, we think we're very much similar. No trial is perfectly comparable, but we think that there's no reason to believe that our product will have any differentiation versus the other two from a durability perspective.
Can you help put everyone on the same page? So people see the 79.84 or whatever the exact number was in the first analysis, and then there was 8.7 or whatever month follow-up. I don't want to get too much in the exact calendar year, but is that second season or that was just eight and a half months complete the full season plus some summer months, which is magic.
Exactly. Yeah.
There is not second season data in there.
Correct.
The second season or the second winter, that data has not been seen by the public or Wall Street. Will that be at ACIP?
That is our hope.
If you were at 84, 79, 64, what would it look like then if you go to the second season? Because it's almost like one hand behind the back. If you already started at a lower number because you were in a very difficult breakout season, which you did your primary analysis, GSK and Pfizer did their primary analysis in an easier season. So when you drop 10% or 15%, they start from a higher number. You have one hand behind the back because you started your first season at a very difficult level. So falling 10% or 15% technically could put you below 50%. How do I interpret that?
Yeah. So I mean, we look at antibodies and what the amount of antibodies are there after two years. And I think those will remain strong. We hope those will remain strong. And so I think we've seen about a 20-point efficacy drop for our two competitors. And we see no reason that our data wouldn't be something similar to that.
So 79-ish after the first season falls 20 points like others. So that should fall to like 60 or high 50s.
Correct.
Okay. And that's still above 50, and that's still the similar type of numerical result drop. And so do you believe that your injection or that the ACIP is going to move to an annual, or are they going to keep it every two years or three years, or would there be different recommendations for different vaccines? And that's kind of confusing to people.
Yeah. I hope that it wouldn't be different recommendations if we're seeing the same durability. So that answers that part.
Durability defined by antibodies.
Antibodies and efficacy over time. In terms of I think ACIP could move to an annual booster based upon some amount of waning efficacy, but that remains to be seen. They'll have to see that over time. That could simplify things for people, for consumers, for the healthcare system, that you don't have to measure which season did you take it, which season did you not take it. But right now, obviously, it's every other year, and we'll see what happens.
Now, if I may push on that a little bit, because GSK and Wall Street have seen the numbers, which is that in the last ACIP, GSK offered two injections, and they offered one injection. When you compared those, literally, they were both like 56% in the second season. By the way, they were 56%. You were 80%-60% in the same winter season, by the way. You're actually higher. But the point was that whether you gave someone two jabs or one jab, it was basically the same for GSK. I have gone through a long debate, and I was actually corrected by my GSK analyst, but that is totally true. That is why GSK people and others believe that GSK is going to be at least in every two years, and their third-year data is coming.
Why would you say it's going to be annual if it's pretty clear that GSK is at least in every two years?
It would mostly be if you believe in the convenience of it, I think.
Convenience thing.
It's still 58% or 56% versus 80-ish%. It's still a drop. So I think it would have to be a recommendation that says the convenience matters and that 20, 25-point difference matters. But again, we don't know. We're not guessing. We're just saying that there is a chance that it could be an annual boost.
Okay. Then lastly on RSV, to close out, the number of RSV jabs last year, I think, was 10 million-ish. I believe that there are around 60 million-ish people above 60, ballpark. So that's one-sixth of the market has been vaccinated there. Do you believe that approximately the same number of 10 million should still get vaccinated for RSV this season? Some people believe, oh, all the people who are above 60 years old, yeah, they want to get vaccinated. They got it. The next season, year two, although there's greater awareness of it, that's like a second-tier level of people above 60 who didn't have to get in the first season. What would Moderna's view be on the types and the numbers of jabs for the market? Higher, lower, same.
We looked at all those possibilities, and that's what went into our billion-dollar guidance in both RSV as well as on international COVID. I think the short term is difficult to predict, but like you said, I think we're very encouraged by the uptick. I think in the long term, it certainly should be much more than 10 million total out of those 60 million. Whether that's going to 20 million, whether that's going to 30 million, whether that's going to 40 million.
And then after re-vaccinate.
Exactly right. And re-vaccinate. So we're not trying to predict exactly whether it's 10 million or not this year, but I certainly think that the education and awareness is out there and that the burden is necessary.
Okay. Well, the good news is even though you have $1 billion, the Wall Street consensus is around $280 million, which is at $200 bucks, not very many jabs. I think $200 bucks times 1 million is already $200 million.
That's correct.
That's 1/10 of the market share.
Correct.
Okay. Decent math. That's not a very big number, 1/10 of the market share in the consensus.
That's correct.
Okay. Let's transition away from that. One last question. What is going on in Europe? So Europe's a big market.
Yeah.
Let me ask you two points. You can expect to file. Are GSK and Pfizer expected to be there? What about COVID European tender? Give us an update overseas.
Have filed with EU for RSV and a few other markets. I think that will continue. I mean, we prioritize the market based upon size. In 2025, we'll continue to file in other jurisdictions as well. So I think it sets up a kind of a long-term growth.
Those wouldn't be for this winter season.
Not for this winter season, more for winter. Exactly. So I think that sets up, to your point, the $200 million or $300 million. We believe there's a long-term growth here. And I think we said our peak sales would be in the $2-$3 billion range. That includes other patient populations as well. That's not just 60 and above, but I think it's.
Merck. Could that opportunity be?
That one doesn't seem to be on. Is that working? All right. Keep going. So that's in that. That is probably in that. We knew that Brazil was not going to be here. We knew that RSV. What could the size be? Clearly, Brazil hit the press, so that's great. We'll see how many ever get there. That was a Pfizer-only country. I was.
Your comment was Merck's comment. Optimistic about the program and remained in some sort of dialogue with the FDA. Can you characterize what the conversations are around or what would they be expected to file or what they would want to file, or do you just have to wait for the full data?
I think, yeah.
You're confused.
So I'm not going to get into too much of the FDA and regulator commentary. I think we've been very clear about what our belief would be, what would be necessary to actually file for accelerated approval, and that was three things. One was the phase two data being durable, and we believe that has been evidenced now through the data we released at ASCO. I mean, we released it a little bit earlier, but also at ASCO. We can get into that data, but it's quite strong after three years. The second is the phase three enrollment, which is progressing nicely. There were some comments made at ASCO by some investigators on what % enrolled we are, but.
Can you give us that for fair disclosure?
I would just say that we are encouraged by the enrollment. Oh, the disclosure of what that person said.
That's a good question. It's on the.
One of the investigators said that we were 80% enrolled.
80% enrolled.
On the phase 3 trial, which is about 1,100 patients.
Wow.
In total, 80% would obviously be a lesser number of that. So we're not commenting. We're not confirming, denying that. We're just saying that there has been great enthusiasm for, and which is encouraging just for the product, how quickly it is enrolling, and we're excited by that. And the third is manufacturing readiness. We purchased a facility in Marlborough, Massachusetts, just outside of Boston, to set up a commercial facility solely for INT. All of the patients and drugs that we've made to date have been out of Norwood, Massachusetts, which is our R&D facility. Obviously, we could have made the commercial product there, but we are taking the long-term view here that a new commercial, fairly sized facility is the better approach for patients. And it has a ton of capacity to continue to grow out.
We will put in 1 line, which can serve a certain amount of patients, but it can take up to 7 or 8 lines in that facility. We started that in March of 2023, so we are, whatever that is, 16 months along.
So this is a new facility. This will be making INT, and you do need to get CMC and FDA inspection on this factory in order to do that. Now, that's for approval. There's certain steps in order to file that you would need. It's not getting a full sign-off is for approval. There are certain steps to at least file. They would have to have certain CMC requirements.
We have to believe that we are inspection-ready.
I see.
We're very far along, but not yet done.
What about this public commentary? So if we're going to trade public commentary tidbits, that Peter Marks apparently has said that AI-based drugs are complicated, and the FDA is not necessarily ready to review or approve those. Can you characterize this idea of AI drugs and what you think, or maybe what Moderna thinks or put into context that comment versus the idea that technically you do use an algorithm?
Algorithm.
I'm not saying it's an AI algorithm, but there's an algorithm that for each patient, it is a different mixture of the antigens such that every product is different. Now, in TILs, just had Iovance 30 minutes ago, that is also a personalized thing where every product is different. Yours, every product is different. How is the idea of AI versus just, no, maybe it's more TIL-like?
Yeah. I think it's an algorithm, not necessarily AI. I think AI can fluctuate, and you don't know the science behind the algorithm necessarily, whereas I think it's different here where you actually do know the algorithm, and it obviously kicks out different neoantigens for individuals.
But there's a computer algorithm, and that is applied to everyone. Now, Lavina looks like she wants to say something, or Lavina wants to say something, maybe we let her.
Feel free.
You want to use the mic right here or here?
Yeah. So just wanted to highlight that the Peter Marks commentary was really talking to a future state AI-driven product, which would learn. The algorithm would learn when there's a lot of data in thousands, hundreds of thousands of people, where we could then tweak that algorithm. At this very first phase 3, the algorithm is exactly the same as the phase 2. It's static, and so there isn't any changes. So given your example of some of the other personalized products that have been approved, FDA does have experience with that.
Right. I kind of analogized it more TIL-like. There's an algorithm to how that is done. Every product is different. AI is this idea that, oh, next year, the same INT, the algorithm has changed. You don't know whether it's going to kick out. And so that we don't have efficacy on that based on the change in algorithm. Thank you for that. So thank you very much, Jamey, for walking through all that. That's an exciting time period as you go on. Let me one last thing. Avian flu?
Avian flu.
Avian flu.
Avian flu.
That deserves 60 seconds.
Yeah.
Are you with that?
Yeah. We're in a phase 1/2 trial, and I think we should have a readout in the not-too-distant future. I mean, the burden is unknown.
There is data coming on Avian flu in patients to vaccinate.
Correct.
That press release could be coming.
Correct.
Okay. Thank you guys very much. Appreciate it. I know you got a busy day today.
Thanks, Mike.
Thank you.
Thanks, everyone.