Good morning. My name is Kevin, and welcome to Moderna's third quarter 2022 earnings call. At this time, all participants are on a listen only mode. Following the formal remarks, we will open the call for your questions. To ask a question during the session, please press star one one. Please be advised this call is being recorded. At this time, I'd like to turn the call over to Lavina Talukdar, Head of Investor Relations at Moderna. Please proceed.
Thank you, Kevin. Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's third quarter 2022 financial results and business updates. You can access the press release issued this morning, as well as the slides that we'll be reviewing by going to the investor section of our website. On today's call are Stéphane Bancel, our Chief Executive Officer, Stephen Hoge, our President, Arpa Garay, our Chief Commercial Officer, and Jamey Mock, our Chief Financial Officer. After prepared remarks, we will take your questions through 9:15 A.M. this morning. Before we begin, please note that this conference call will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Please see slide two of the accompanying presentation in 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. With that, I will turn the call over to Stéphane.
Thank you, Lavina. Good morning or good afternoon, everyone. Welcome to our Q3 2022 conference call. Today, I will start with a quick business review of the quarter before Stephen reviews our clinical programs. Arpa will then take you through commercial dynamics, and Jamey will present financials. I will then come back to close before we take your questions. In the quarter, we reported $3.4 billion in revenues. We reported net income of $1 billion and cash investments totaling $17 billion. We now expect deliveries under advanced purchase agreements in the range of $18 billion-$19 billion in 2022 due to delayed deliveries from our fill-finish contract manufacturers, resulting in $2 billion-$3 billion of revenue deferrals into 2023.
In Q3, we had to deal with a lot of complexity, launching two products, 1273.214 and 1273.222 at the same time, and also moving products from 10-dose vials to 5-dose vials. Q3 was actually our greatest ever amount in terms of vials produced and was up over 20% the average of the previous three quarters. Arpa will share more thoughts on 2023 in a moment. In the first quarter, we repurchased over 7 million shares. The $3 billion share repurchase program we announced in February 2022 was completed. Since the start of our first share repurchase program in 2021 through the end of the first quarter, we have repurchased more than 23 million shares.
Our third share repurchase program announced in August 2022 for an additional $3 billion in repurchase is ongoing. Let me now review the pipeline highlights and advances since our last update. I am very pleased with the important progress the Moderna team has made on advancing the pipeline closer to product launches and at the same time including the breadth of the pipeline. We've continued to progress our COVID booster programs and have received authorization around the world for both our COVID 1273.214 program, which targets Omicron BA.1, and 1273.222, which targets BA.4/5. We have, as you know, two respiratory vaccine in Phase III trials as we speak that continue to progress quickly. For flu vaccine, at R&D Day in September, we announced the first Phase III immunogenicity study was fully enrolled.
We expect new data in the first quarter of 2023. As a reminder, we plan to pursue an accelerated approval pathway for our seasonal flu vaccine. We also started a Phase III efficacy study with our flu vaccine, and that trial is enrolling quickly. For Phase III RSV vaccine, we are on track for data within this winter season. We were pleased to announce that Merck exercised their option to develop and commercialize our personalized cancer vaccine, mRNA-4157, paying Moderna $250 million in Q4. We and Merck will share costs and profits 50/50 for this program moving forward. We continue to expect data from our Phase II study for PCV in Q4 this year.
In rare disease, we are pleased to share at our R&D Day that we saw encouraging early sign of clinical benefits above PA and GSD1a and announced a new development candidate for OTC. On slide six, you see our usual snapshot of Moderna in November 2022, showing the breadth of the pipeline. We've now 48 programs in development across vaccines and therapeutics. The company continues to grow, and we now have more than 3,700 Moderna team members. Last week, we were very pleased to announce as a top employer by Science for the 8th consecutive year. We have now 15 commercial subsidiaries globally and a strong balance sheet of $17 billion to fund our continued growth. With this, I will now turn over to Stephen to review the pipeline. Stephen?
Thank you, Stéphane. Good morning or good afternoon, everyone. This morning I'll review our clinical progress. We've launched two vaccine boosters for the current fall winter season to meet different market demands and have received authorizations or approvals worldwide for these vaccines. We previously shared that 1273.214, which targets Omicron BA.1, induced significantly higher titers than 1273 against the BA.1 and BA.4,5 sublineages in a clinical trial. mRNA-1273.214 is now authorized in the United Kingdom, Switzerland, Canada, Australia, the European Union, Japan, and other countries. For mRNA-1273.222, which targets the Omicron BA.4,5 variants, the Phase II/3 study is ongoing, and we expect data later this quarter.
mRNA-1273.222 is authorized in the United States and now also in the United Kingdom, Switzerland, Australia, Canada, the European Union, Japan, and other countries. Now moving to slide 9, I'll review our respiratory vaccines pipeline. I will cover the Phase III studies in detail on the next slide. Here I want to highlight the progress in the earlier stage studies with our respiratory vaccines. mRNA-1020, mRNA-1030 for seasonal influenza is in a Phase I/2 study and is now fully enrolled. mRNA-1345 for RSV is in the pediatric population, is now fully enrolled in a Phase I study. Moving now to our combination respiratory pipeline, where we have made meaningful progress. mRNA-1073, our combination vaccine for COVID and flu, is in Phase I/2 and is fully enrolled.
I'm very pleased to announce that our combination COVID, flu, and RSV vaccine, or mRNA-1230, has also started enrolling in its Phase I/2 study. We announced a new development candidate, mRNA-1045, this one targeting combination of RSV and influenza, and that has started in its Phase I/2 study. Lastly, in our combination vaccine pipeline, we also have a pediatric vaccine covering HMPV and PIV3. That study is ongoing in a fully enrolled Phase Ib study. Finally, our endemic human coronavirus vaccine is in preclinical development along with our pediatric RSV HMPV combination vaccine. Now to review our Phase III flu and RSV programs on slide 10. For flu, our Phase III immunogenicity study in the southern hemisphere is fully enrolled with 6,000 participants, with a data readout expected in the first quarter of 2023.
As we've previously noted, regulators have indicated support for an accelerated approval pathway for our seasonal flu vaccine candidate, pending the results from this study. We've also started enrolling our Phase III efficacy study in the northern hemisphere, and have now enrolled more than 10,000 participants. Timing of this confirmatory Phase III efficacy readout will be driven by flu case accruals in the study and could come as early as this winter. Looking to RSV, our pivotal Phase III efficacy study in older adults has now enrolled more than 35,000 participants. As we've previously mentioned, our primary endpoints in this study are safety and vaccine efficacy. Timing of the Phase III efficacy readout will be driven by RSV case accruals in that study.
As we're now in the midst of a very strong RSV season, we continue to expect that the results will be available this winter season. Moving on to our latent and public health vaccine portfolio. Our CMV vaccine is ongoing in a phase three study. Our EBV vaccine to prevent infectious mononucleosis is in a phase one study, while our EBV vaccine to prevent longer-term sequelae such as cancer and multiple sclerosis is in preclinical. We have two HIV phase one trials ongoing, and our HSV and VZV vaccines are in ongoing preclinical studies. Finally, our public health vaccine for Zika is ongoing in a phase two trial, and our Nipah vaccine is ongoing in a phase one study. Now let's take a look at our therapeutics pipeline on slide 12.
First, I want to note that AstraZeneca notified us that after a portfolio review, they are returning the rights to the IL-12 program to us. They are concluding the Phase I study, and we will then evaluate next steps for the program for ourselves. Second, we're excited that our checkpoint vaccine has started dosing its first patients in a Phase I study. Finally, our partner Vertex expects to submit an IND for our mRNA cystic fibrosis program by the end of this year. We recently shared updates on our personalized cancer vaccine, PA and GSD1a programs at our latest R&D day, and I will talk to those in more detail in the upcoming slides. Now recall at R&D day that we shared data from two rare disease programs.
The first is in our propionic acidemia program, which is a multi-dose study, and as of September, we had accrued six patient years of experience on the drug and administered well over 100 doses. It has generally been well-tolerated, which is encouraging. We've also seen an encouraging trend in the reduction of biomarkers and been observing a numerical decrease in the frequency of metabolic decompensation events, which is also really encouraging given the severity of these events for propionic acidemia patients. In the GSD1a program, we shared an early set of data from the first two patients in the first cohort. The study is a single ascending dose study that runs a fasting challenge in a controlled and safe environment in patients with GSD1a, who are unable to normally fast or go without food for long periods of time without becoming hypoglycemic.
Both patients in the first cohort have demonstrated that mRNA-3745 was well-tolerated and showed an extension of fasting duration and normalization of key biomarkers, including glucose, which we think is very encouraging signal of activity. To close, I wanted to remind everyone that we expect our Phase II results from our personalized cancer therapeutic by the end of the year. The randomized study comparing PCV plus KEYTRUDA versus KEYTRUDA alone enrolled approximately 150 resected melanoma patients with a high risk of recurrence. The primary endpoint is recurrence-free survival. As Stéphane Bancel mentioned earlier, our partner, Merck, exercised the option to jointly develop and commercialize mRNA-4157, and we look forward to sharing that data this quarter. With that, I will hand it over to Arpa.
Thank you, Stephen, and good day to everyone. I will start with a review of sales on slide 16. Sales to the U.S. were $1 billion in the third quarter and were mainly from deliveries of mRNA-1273.222, our bivalent booster targeting Omicron BA.4/5. Sales to Europe of mRNA-1273.214 were also $1 billion and the rest of the world totaled $1.1 billion. Through the first three quarters of the year, U.S. sales were $3.4 billion, sales to Europe were $4.5 billion, and sales to the rest of the world accounted for $5.7 billion. In both the three and nine-month periods, we saw geographical diversification of sales across these key regions. We recognize there are questions regarding the 2023 market and long-term COVID booster potential, and we wanted to walk you through how we are thinking about it.
As we transition into an endemic market, there are important factors we considered in our commercial outlook. These include the ongoing medical need for COVID boosters and the potential size of the annual booster market. We use the seasonal flu market to frame the opportunity, and I will take you through our thinking on that in the next couple of slides. I will also detail some of the factors underlying the transition to the commercial market in the U.S. in 2023. I'll then wrap up the COVID section with an overview of our currently signed contracts and our outlook for additional expected contracts in 2023. Finally, I'll close with a reminder of what's coming in 2023 from our respiratory vaccine franchise and potential launch timings that we shared recently at our R&D Day in September.
Starting with the medical need for COVID boosters, the chart on slide 18 compares hospitalizations and deaths associated with the seasonal flu and COVID over relevant time periods. For flu, we looked back at the past 10 influenza seasons in the U.S. before COVID-related interventions disrupted the typical flu season. For COVID, we looked at hospitalizations and deaths from October 2021 to September 2022, which covers the period of widespread immunity against SARS-CoV-2 and its variants, either through vaccination or infection. We believe this period is a close proxy to what population immunity to COVID could be in an endemic season. As you can see here on the chart, hospitalizations due to COVID during the past 12 months are 3x higher than the 2017-2018 flu season, which represents the year with the highest medical burden within the 10-year period included in the analysis.
The deaths due to COVID are even higher, coming in at a rate of seven times higher than the same severe flu season. This comparison shows the higher medical burden of COVID in a period that we believe more closely approximates an endemic season and underscores the need for boosters in the endemic phase. It also helps frame the potential endemic annual COVID market, which I want to take you through on the next slide. To size the endemic COVID booster market, we start with the flu market volumes. Volume in the annual flu market is approximately 500-600 million doses around the world. The size of the market is highly dependent on the number of doses as well as global price, as shown in the sensitivity table on the left-hand side of the slide.
The prices shown here are purely illustrative to demonstrate a range of outcomes on global pricing. Ultimately, global price for COVID boosters will reflect sales mix and differential pricing across markets. Our endemic pricing will be focused on the value that the vaccine brings to healthcare systems around the world. As we move to an endemic market in 2023, key factors that will impact our volume in the year include the medical need, ongoing viral evolution, recommendations from public health authorities, and consumer motivation to vaccinate. While we believe that volumes in the global endemic COVID market should approximate to at least 600 million doses over time, we believe it is too early to reliably predict the variables impacting the volume of doses in 2023.
Turning to slide 20 and specifically addressing the transition to the commercial market in the U.S., we anticipate a more fragmented customer base, including private payers, health plans, pharmacy chains, individual pharmacies, and physician offices. We also anticipate reduced predictability in orders, seasonality of deliveries similar to flu vaccine deliveries, a shift to full distribution costs assumed by Moderna, as well as other major factors in the U.S., such as shifting to a single-dose presentation and continued innovation and product differentiation. Moving on to slide 21, we summarize the contracts that have been signed so far for 2023. We have advanced purchase agreements for the United Kingdom, Canada, Switzerland, Taiwan, and Kuwait, totaling $2.5 billion. Additionally, we expect deferrals of $2 billion-$3 billion from 2022. These deferrals are from the countries listed on the slide.
Together, these advanced purchase agreements and deferrals total $4.5 billion-$5.5 billion in sales for 2023. Finally, and very importantly, we have a number of countries where we expect additional 2023 contracts to be signed. We are working to secure 2023 orders in the U.S., EU, Japan, Australia, Asia, Latin America, and COVAX. We expect to have visibility into these orders as contracting seasons begins later this quarter and continuing into next year. To summarize the COVID outlook on slide 22, with the continued higher medical burden of COVID relative to flu, we expect the endemic COVID vaccine market could be as large or larger than flu market volumes over time. The U.S. market is transitioning to a commercial market, and we believe we are well-positioned to serve its evolving needs.
Finally, we have established a base of confirmed contracts of $4.5 billion-$5.5 billion in 2023, to which we anticipate adding a number of important orders in the months ahead from key markets, including the U.S., EU, Japan, and others. Now before I close, I'm excited to review the formation of our respiratory vaccine franchise that we highlighted during our R&D day in September. As early as next year, we could be expanding into flu and RSV. As we look at flu and RSV combined with COVID, they lead to more deaths annually than Alzheimer's, stroke or diabetes in developed markets. As Stephen highlighted, depending on case accruals and vaccine efficacy, we could see data from our flu and RSV phase three trials this winter.
We are actively preparing for the commercial launches for these additional respiratory vaccines and will leverage the COVID commercial infrastructure that we are currently building. With that, I'd like to turn it over to Jamey.
Thank you, Arpa, and hello, everyone. It's a pleasure to be here with you today. After two months at Moderna, I am even more excited about our company's future and the role we are playing in bringing a new generation of medicines to patients. For those of you whom I haven't had the pleasure of meeting yet, I look forward to working with you in the months and years ahead. Today, I will start by providing additional color on our third quarter results and capital allocation priorities, and finish with the view on the key drivers on our remaining 2022 financial performance. Turning now to slide 25. Total product sales in the quarter of $3.1 billion decreased 35% year-over-year.
The decrease was driven by lower sales volume due to the timing of market authorizations for our updated COVID-19 booster vaccines and the related manufacturing ramp-up with our CMO partners. As a reminder, we received the marketing authorization for the U.S. on August 31st, for the European Union on September 2nd, and Japan on September 12th. We anticipate that product sales will be higher in the fourth quarter of 2022 than in the third quarter as we continue to deliver against our supply contracts for booster vaccines. Cost of sales was 35% of product sales, compared to 15% of product sales last year.
This includes a charge of $333 million for inventory write-downs related to excess and obsolete COVID-19 products, an expense for unutilized manufacturing capacity of $209 million, and a loss on firm purchase commitments and related cancellation charges of $102 million. These charges are driven by a shift in product demand to our Omicron-targeting COVID-19 bivalent boosters and costs associated with surplus production capacity. Research and development expenses were $820 million, an increase of 57% versus the prior year. The increase in R&D spend continues to be driven by our increasing and maturing pipeline, including Phase III studies for RSV, flu, CMV, and COVID boosters. Selling, general, and administration expenses of $278 million increased by 65% year-over-year.
The growth in spending was driven by continued investments in personnel and outside services in support of the accelerated commercial and overall company build-out. The effective tax rate of 14% compared to 6% last year. As a reminder, we had a net operating loss carryforward of $2.3 billion at the end of 2020, which resulted in a non-recurring benefit to the reported tax rate in 2021. After-tax net income decreased by 69% to $1 billion. Diluted EPS in Q3 2022 decreased by 67% to $2.53. As a result of our share buyback activities, the diluted weighted average share count reduced by 22 million shares to 412 million shares as of the end of Q3 2022, compared to 434 million shares the prior year.
Turning now to the year-to-date financial results on slide 26. Total product sales for the first nine months of 2022 were $13.6 billion, an increase of 26% year-over-year. The growth was mainly attributable to a favorable customer mix and higher manufacturing capacity to fill customer demand for the first half of 2022 compared to the first half of 2021. Cost of sales was 26% of product sales, compared to 16% of product sales last year. The increase was driven by substantial demand reduction from COVAX, as mentioned in our Q2 earnings call, a shift in demand to our Omicron targeting COVID-19 bivalent boosters, and costs associated with surplus production capacity. After-tax net income was $6.9 billion, a decrease of 6% versus prior year.
The decrease in net income was primarily due to higher cost of sales, higher other operating expenses, and a higher tax rate. Diluted EPS decreased by 3% to $16.46. Turning to cash and cash deposits on slide 27. We ended Q3 2022 with cash and investments of $17 billion, compared to $18.1 billion at the end of the second quarter. The decrease reflects the share buyback in Q3 of $1 billion and a federal tax payment of $0.8 billion. The ending balance of cash deposits for future product supply at the end of the quarter was $3.8 billion. Now turning to slide 28. Our capital allocation priorities remain unchanged. Our top investment priority has been, and will continue to be, reinvesting in the base business across multiple areas.
R&D spending was $2.1 billion in the year-to-date September period, a 55% year-over-year increase. We continue to be excited about our mRNA platform and now have 48 development programs with multiple ongoing studies in, now in Phase III. We increased our year-to-date capital expenditures by 88% year-over-year to $308 million as we expand our manufacturing footprint. We also continue to invest in our commercial and digital capabilities, as well as the overall company build-out. Our second investment priority is to seek attractive external investment and collaboration opportunities to further expand the reach of Moderna's technologies and capabilities. We are considering attractive opportunities that enable and complement our platform and take a disciplined approach in evaluating potential outside investments. We are in multiple active discussions regarding additional external collaboration opportunities.
After evaluating internal and external investment opportunities, we then assess additional uses of cash. In the third quarter of 2022, we repurchased 7 million shares for $1 billion. Year-to-date through September 30th, we repurchased 20 million shares for $2.9 billion. In October, we completed the $3 billion authorization approved in February 2022 and began to utilize the additional $3 billion August authorization. Now let's turn to our 2022 updated financial framework on slide 29. We now expect delivery in 2022 against signed advanced purchase agreements of $18 billion-$19 billion, reflecting deferrals of $2 billion-$3 billion into 2023 due to short-term supply chain constraints.
This total includes expected negative foreign exchange impacts compared to the contract value at signing, which we estimate to be approximately 1.5% of sales for the full year 2022, assuming current exchange rates remain through the year-end. Our total cost of sales includes the cost of goods manufactured, third-party royalties, as well as logistics and warehousing costs. We now expect our full year 2022 reported cost of sales to be in the 26%-28% range, driven by the previously mentioned costs incurred year-to-date, a ramp on our Q4 volume, and potentially further charges due to product updates. For R&D and SG&A, we continue to expect full year expenses to be approximately $4 billion, driven by our maturing development portfolio and the global scale-up of our company.
Based on current tax laws, we continue to expect our 2022 effective tax rate to be in the low to mid-teens as a result of benefits from the foreign-derived intangible income driven by our international business mix and stock-based compensation deduction. Finally, regarding capital expenditures, we now expect capital expenditures to be approximately $0.5 billion, slightly below the previous range of $0.6 billion-$0.8 billion, driven by the timing of project completion. This concludes my remarks concerning the financial performance, and I will turn the call back over to Stéphane.
Thank you, Jamey, Arpa, and Stephen for this update. Before opening to Q&A, I just want to review some of the key priorities as we close out this year and look into 2023. For the remainder of the year, we'll continue to focus on delivering our updated Omicron boosters and drive 2022 sales. We are already working on 2023 sales contracts in Europe, Japan, and as you heard from Arpa, around the world. Arpa and the team are also setting up the U.S. team and scaling it so that we can go private in the U.S. market in 2023. We continue to execute on our pipeline. We look forward to be able to present when we have it, the Phase II data for PCV expected before the end of the year.
The team is doing a great job to continue to enroll our phase three study for flu and RSV and CMV, and I'm excited to see the advancement of our rare disease programs. Looking to next year, Arpa and the team and the entire organization, including manufacturing, is preparing for multiple vaccine launches in the year, including commercial COVID market, as well as potential for our therapeutic programs to move very quickly in phase three. Finally, we hope that many of you can join us next week for our first ESG day on November tenth. The virtual event will be available from our webcast. With this, we'd be happy to take your question. Operator?
Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your touchtone telephone. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Salveen Richter with Goldman Sachs. Your line is open.
Good morning. Thanks for taking my questions. On pricing here for the COVID vaccine, Pfizer's guiding to a price of $110-$130 in the private market. Is this in line with what your discussions thus far suggest, and when do you think the private market will emerge next year? Then a second question here. You were talking about some of the cost burden for next year with distribution costs and building out the commercial infrastructure around flu RSV and trials. Could you just give us some directional color on the OpEx situation as we look to the forward?
I can take the pricing question. You know, I'm not in a position to comment on competitor pricing. As we think about our pricing as we evolve from a pandemic setting to an endemic setting, the real focus for us is on ensuring that our vaccines are priced based on the value that they provide to the healthcare system and reflect the cost-effectiveness guidelines that are set by public health authorities around the world. For here in the U.S., that would be ACIP. I think it's important to note that some of the pricing guidance that has been released in the past is really at a gross level, and we do anticipate some discounting across different channels.
Additionally, here in the United States, as we evolve into the commercial setting, it's also important to remember that for all ACIP-recommended vaccines, there is a zero out-of-pocket cost for consumers. From a consumer access perspective, we do expect that the pricing will not be a barrier to uptake.
Salveen, maybe I'll take the cost part of that. Yes, our cost will change in a endemic mode. Number one, there are presentation preferences moving more to prefilled syringe and single-dose vials that I think will be different year over year. We have to continue to invest in bivalent vaccines, as well as Moderna will now pick up the distribution costs moving forward, particularly in the United States. Yeah, our cost profile will change, and we'll come out and update in terms of what that means at a later date.
Thank you.
One moment for our next question. Our next question comes from Matthew Harrison with Morgan Stanley. Your line is open.
Great. Good morning. Thanks for taking the question. I was hoping to ask on PCV, just given that this is a Phase II study, that's proof of concept, a P value greater than 0.05 could be considered a success in this study. So maybe you could just help us think about how you're thinking about a success in the study and then just given that it's an open label study, how much data is available to you internally? Thanks.
Great. Thanks, Matthew, for the question. As you said, it's a Phase II study, but it's actually quite a sizable one. It's 150 patients, and they were randomized 2: 1. 100 patients have received the combination therapy and 50 the standard of care, which in this case is Keytruda. That's actually quite a sizable sample, and does allow for us to look at efficacy. Now, it is a Phase II study, and so we didn't pre-specify you know a statistical threshold that we'd wanna hit. We are looking at hazard ratios across that, and we will get P values. I won't comment on you know a specific P value or hazard ratio at this time. It's premature to do so.
Obviously, we are looking against standard of care to demonstrate a significant benefit over that standard of care. It's just important to note that the study wasn't powered for that at 150 participants. We will be looking to that hazard ratio and the P value as indicative. Depending upon the strength of that result, if it is, in fact, as you said, a P value less than 0.05 and there's a very strong result, we will then make our subsequent decisions about how to proceed forward with development. Obviously, the stronger the benefit in terms of hazard ratio and the lower the P-value, the more we'll wanna move very quickly towards advancing that program.
Thank you. One moment for our next question. Our next question comes from Edward Tenthoff with Piper Sandler. Your line is open.
Great. Thank you very much and congrats on all the progress. Appreciate all the detail on sort of the outlook both for the COVID market and, as we move forward. Question's back to my favorite topic, the orphan diseases. With this proof of concept in hand from the first programs, is there a desire to be expanding the pipeline similar to what you did with vaccines upon proof of concept with COVID? Thank you very much.
Thanks, Ed, for the question. I think the short version is absolutely. You know, in any of our modalities, whether they're cancer vaccines or our infectious disease vaccines or now our orphan disease, where we believe we've achieved a technological proof of concept, where we've achieved what we wanted to in patients, we look to rapidly expand the number of diseases and indications that we can bring forward that technology in.
In the case of, you know, orphan rare diseases, as we shared, we are extremely encouraged by the data across two different diseases using two different medicines that now suggest we have, obviously acceptable safety and tolerability profile, which is, you know, of primary importance, but more importantly for efficacy, we're starting to see really encouraging results in terms of biomarkers or even pharmacodynamic readout that, you know, potential of benefit for patients. Given the strength of those two prior results, we've actually moved quickly to expand our pipeline. We have a number of other programs that are already publicly disclosed and moving forward in clinical trials. Some, including MMA, are already in clinical studies. As I mentioned at our R&D day, we're looking to substantially expand that pipeline of programs.
We announced the OTC program, as one instance of that just a month ago. You can expect that we'll be adding substantially to that. You know, our goal will be to more than double that pipeline in the years ahead as we expand our investments in rare diseases on the back of that de-risked clinical data.
Great. Excellent. Thank you, Stephen.
One moment for our next question. Our next question comes from Michael Yee with Jefferies. Your line is open.
Hi. Good morning. Thanks for the questions. Maybe a question for Stephen. In RSV, we've had two players read out results. I think one is 80% ±; one, 66%± , depending on the endpoint. I wanted to ask you how you view the bar in terms of being competitive and where there is some differentiation opportunity for your RSV vaccine that could read out soon. Talk a little bit about that. Just as a follow-up to PCV, again, just to clarify, Merck had opted in. Can you comment on, I guess, the idea of the timing just before the data, whether they had insufficient information or maybe just talk a little bit about the implications of that opt-in just before the data? Thank you.
Yeah. Thank you for the question, Michael. So first on RSV, obviously, we're incredibly encouraged by the results that have been seen by other vaccines. Given our platform has previously demonstrated its potential in COVID, specifically in respiratory vaccines, we think it bodes well for us in terms of that study. You know, there's a bar that's been established in terms of severe disease, as you referenced, in the 80% range. We are looking at three symptom or, you know, quote-unquote, severe disease. It's hard to compare between the studies. They're not conducted the exact same time, and they don't always have exactly the same definition as you know.
We would absolutely hope and expect that the type of efficacy we're gonna see against severe disease will be on par with, and I would even hope for better, than what's been seen by others. It's certainly been the case with our platform technology compared to others in terms of COVID, that we've been able to see those sorts of potential benefits. I'll also note that we've looked at titers, and we previously shared our titers as well as other companies have from their early clinical phase one and phase two results, and we believe that the boosting of neutralizing RSV titers against both RSV-A and RSV-B that we were achieving was on par. You know, you could always argue perhaps better or worse, but on par with what others had seen.
We're quite encouraged by that, and I think we're looking forward to the RSV efficacy results over this coming winter. Our bar for this is to be as good or better than others have been. In terms of PCV, Merck has opted in, as you said, and I know Matthew asked the question as well. It is an open label study as we previously disclosed, and we have been following events through that study, those that have received the cancer vaccine in combination with KEYTRUDA versus those that have not.
As we've now passed the one-year mark for follow-up of the last patient to be randomized in that study, we now have at least a year of follow-up and in many cases, two-plus years of follow-up across those two different cohorts, those that received combo and those who received standard care KEYTRUDA. That data was known to us and Merck. It's important to note that's an ongoing uncleaned and not primary analysis. While it is open label, the correct thing to do at this point now is to begin the closing process, get all of the scans, review all of the data associated with the clinical outcomes, make sure nothing was missed.
In that cleaning process, then finalize that database and conduct the primary analysis of the study, which is to evaluate the hazard ratio and the statistical significance of that hazard ratio between the two arms. That's actually the process we're undergoing right now, and it's important that before we make a decision on whether that data is positive or negative and the strength of that positivity, how quickly we move forward, per Matthew's question, into whatever the next stage of development are, that we conduct all of the right diligence on those datasets. That's the work that's ongoing right now.
While Merck made their opt-in decision, which was really more calendar and contract driven based on obviously having access to that open label information, the really important analysis, the primary analysis, the one on which we will base our decisions of what to do next, as will regulators and others, is the one that we're trying to conduct right now and is not yet completed, but we do expect that result in this quarter.
Thanks. Very helpful. Appreciate it.
One moment for our next question. Our next question comes from Gena Wang with Barclays. Your line is open.
Thank you. Steve, maybe just follow with your comments on Merck. Just want to confirm that Merck does see the open-label data for the recurrence-free survival rate. Also wanted to confirm that, you know, the control on the PFS model that will be in line with historical data that's in the low 70s, that would be the rate. Also how would you share the data for the PCV Phase II data?
Another question is regarding slide 19, the global COVID market opportunity. Since we expect significant increase in price in the U.S., what is your expectation for the ex-U.S. price change across major markets since you're giving, like, $20-$40 price range?
Gena, thanks for that question. Again, it was not a continuous data set. It was an open label study. Per our agreement with Merck, they had the right to know what do we know about the program at the point in which they had to make their decision about whether to opt in or not. Of course, what we did is we provided them the access to the data of the study at that point in time. As you all have noted, they elected to opt into that program. We are encouraged by that decision on their part. They obviously do have a tremendous amount of experience.
In terms of the control arm, you obviously have the KEYNOTE-054 study, which is their prior registrational studies. They have experience of what to expect in a control arm. You know, I think you can infer whatever you'd like from their decisions to say that they believe it's worth opting into that program and proceeding to the primary analysis that we're conducting right now.
We will obviously be able to compare the control arm, the 50 patients who just received KEYTRUDA as standard of care, against the registrational studies others have done, and actually the many years of patient experience that companies like Merck and others have, just to be confident that in fact, if we are seeing a difference between, we are seeing a hazard ratio difference, that it's not a difference in terms of that control arm, which will bode well, 'cause again, patients were randomized in this study.
Now in terms of the data we'll have and share, at this point, all we'd expect to share this quarter once we've completed the analysis, the primary analysis on efficacy in the study, is just the top line data in terms of PCV, which as I mentioned previously, is looking at the hazard ratio and then a characterization statistically of that. In subsequent and appropriate fora, including you know meetings and otherwise, we will look to then share the fuller data set over time.
Then I can take the pricing question. Your question was primarily around ex-U.S. pricing and our expectations. A couple of factors are coming into play here. The first is the timing of where and how quickly ex-U.S. markets are going to be shifting from more of a central procurement pandemic setting to an endemic setting. We're looking at how different regions and countries are gonna be shifting back towards a more endemic or a commercial approach. When we get to that position, we will be again pricing the vaccine according to the value that it provides in different healthcare systems around the world. Again, following established systems around cost effectiveness guidelines, based on the country regulations and the public health authority guidance.
The overall global average price we do anticipate will be largely driven by the regional mix, so it is hard to predict what that price will end up being. We'll continue to share more as we see evolving demand as well as evolving pricing.
Thank you.
One moment for our next question. Our next question comes from Tara Bancroft with Cowen. Your line is open.
Hi, guys. Thanks for taking the questions. Is it fair to say that the 2023 signed APAs of the $4.5 billion-$5.5 billion is the floor? What minimum revenue do you think could be added from the geographies that you're expecting contracts from? Related to this, to what extent does it include sales in the key markets that were mentioned in the press release? Like, for example, does it include the option from the latest U.S. agreement? Thanks.
Thank you for the question. The $4.5 billion-$5.5 billion is the floor sales that we anticipate in 2023, as we already have signed APAs as well as deferrals from 2022 into 2023. This number does not include options from the U.S. government. We do anticipate additional sales coming from key markets such as the U.S., EU, Japan, Australia, as well as regional sales in Latin America, Asia-Pacific, Middle East, and COVAX. Again, to answer your question specifically, this is what we anticipate to be the floor, but still unknown in terms of the total opportunity as we evolve, particularly in the U.S. market, into a commercial setting.
Thank you. One moment for our next question. Our next question comes from Jessica Fye with JP Morgan. Your line is open.
Hey, guys. Good morning. Thanks for taking my question. Are the short-term supply constraints mentioned as the reason for delivery delays resolved at this point? How does bivalent booster uptake so far this fall compare to your expectations? As it relates to China's potential orders of Western mRNA vaccines, what's your level of optimism that that could come to fruition within, you know, some reasonable time, timeline, say, the next year or so? Thank you.
Sure. It's Stéphane. I'm gonna take the first question on supply, and then I'll turn to Arpa for the commercial pieces. As I shared in my remarks, we actually had to deal with very complex third quarter from a manufacturing standpoint. You know, not launching one product, but two. Doing this kind of in the record times, as you are aware. The FDA informed us at the end of June that they wanted the BA.4/5 products for the U.S..
That product was available in pharmacies, you know, Labor Day weekend. The shift from 10-dose per vial, which is what we sold with 1273, and for the first time selling 5-dose per vial, so basically doubling the number of vials needed for the same number of doses. We've had quite a number of pain points with fill-finish manufacturers. We are working through a lot of those issues. A lot are solved, a lot are still being solved as we speak. There are many lessons to be learned that we are working on to put, you know, robust fixes for the end of the year, but also that we are in a much better place for fall of 2023. Arpa?
Sure. The first question around vaccine uptake. We are seeing some variability around the world in terms of vaccination rates, with the best data thus far really coming from the U.S. market. As we look at 2022 vaccination uptake versus 2021, specifically for COVID boosters, we're actually tracking a similar pattern. It's a little bit early to see what November, December, and the rest of the fall and winter season will look like. The early rates, while in absolute terms are fairly low, they are tracking the trends that we expected compared to last year. Around the world, we are seeing some markets with very high uptake of vaccination rates really driven by public health authorities.
In other markets, we're still looking at sort of the dynamics that have played out this year with populations have recently gotten their fourth booster in the summertime and regulatory bodies recommending that they wait a few months before they get their fifth booster. I think more to come as we continue to track around the world, but the early signs of uptake are encouraging. Your last question on China. We continue to look at the opportunities in China. Nothing new to report here as of now, but it is certainly a key market of interest for us commercially.
Thank you.
One moment for our next question. Our next question comes from Geoff Meacham with Bank of America. Your line is open.
Morning, guys. Yeah, thanks for the question. Just had a couple. Just wanted to follow up on your last comment. You know, you mentioned booster adoption has been mixed depending on geographies. Is this something that Moderna expects to further invest in, with regard to, you know, value of boosters, additional follow-up and studies? That's the first question. The second one may be more for Stéphane. You know, the balance sheet remains pretty strong. You guys have done some, you know, buybacks, but we haven't seen, you know, sort of a cluster of acquisitions or any sort of real capital allocation.
You know, where would M&A sort of fall on your, in your priority list with uses of cash? Does that change, as you know, COVID continues to you know to sort of wind down with regard to the you know, the revenue base 2023 over 2022 and maybe you know, even more modest going forward? Thank you.
To the first question on if we are investing in the vaccination rates, as I shared earlier today, the medical need continues to be clear for COVID booster vaccination, especially as we compare it to, you know, the hospitalizations and deaths compared to flu. What we're really doing is partnering with governments and public health agencies to share the data that we have in terms of the ongoing medical need at a country level, as well as the value of COVID booster vaccinations in their populations. It's this partnership with the public health authorities that's really driving increased urgency and action around vaccinations. That's our approach, as we believe public health authorities are in the best position to encourage the vaccination for their populations.
Thanks, Arpa. On the balance sheet side, I mean, our BD strategy, as Jamey noted in his remarks, is unchanged. As you know, we are looking and have already signed deals in terms of technology licenses, and also looking at M&A. As we've said before, you know, we stay focused on nucleic acid. We don't really think it's a good strategic use of our capital, you know, to buy small molecule asset or large molecule or cell therapy or else. We really want to stay in nucleic acid. The BD team is very active, as Jamey knows and Stephen knows. They are doing a lot of work. We're reviewing a lot of things. As I've said in the past, we'll remain disciplined in terms of understanding risk, either on the technology side or on the biology side, understanding value.
We're here to create value, not to manage price release. The team is very active. We are looking at diligence on a regular basis, but not everything that we look at comes out to be something we can think we can create a lot of value with. We continue to look, and I would not be surprised if we continue to add partnerships in the months and quarters to come.
Great. Thank you, guys.
One moment for our next question.
Our next question comes from Eliana Merle with UBS. Your line is open.
Hello. Thanks so much for taking the question. Just another one on RSV. In terms of thinking about mRNA as a vaccine modality in the context of RSV as we move beyond COVID vaccines, I guess how are you thinking about the potential for mRNA and potential advantages relative to other more traditional vaccine modalities in the context of RSV? I guess what we could learn from some of the upcoming readouts, both, I guess, for the opportunity in RSV, but also what it could tell us about mRNA potential in vaccines relative to other modalities more broadly. Thanks.
Great. Well, thank you for the question. You know, first, we have previously demonstrated with our platform in COVID and in fact in some recent publications, even in flu, that we're we generally see a really broad-based and balanced immune response. We tend to see very high T cells and cell-mediated immunity. You know, I would argue some of the highest, if not always the highest, antibody-neutralizing titers. And both of those are really important as you start talking about older adults and respiratory infections, which is probably why we've tended to see higher efficacy with the mRNA platform than other approaches in that high-risk population, including in COVID, you know, over the last couple of years.
Those features of the platform, the ability to generate really strong cell-mediated immunity, boost T cells, which are important for preventing severe disease, but also pair that with achieving very high titers for a seasonal protection, where again, you get high neutralizing titers, which provide a barrier to the amount of infection that you're gonna get, which is really, really important for older adults because their cell-mediated responses, their innate immune system just isn't as strong, even with a great vaccine. It's that combination that we think defines, you know, our advantage from a platform perspective and why we're so excited about developing a portfolio of respiratory vaccines across all the leading, you know, killers in that space, for older adults. RSV just fits right into that.
As we all know, right now, there is a huge unmet need in that space. We're very pleased to fully enroll that Phase III study. You know, we were actually quite pleased with the titers and cell-mediated immunity that we saw in early development, some of which we've presented publicly. We're looking forward to that efficacy readout. In terms of other approaches, you know, let's also just celebrate that, you know, recombinant protein and viral vector and adjuvanted approaches have all shown really exciting progress in the last really year and a half across a range of companies. RSV is a huge unmet need. It will take many different approaches to have an impact there.
If anything, I think the success of others gives us optimism that our approach is going to also be successful. There are likely gonna be, you know, many different solutions to this for older populations. We do believe that our platform has an advantage, but given the success of the other vaccines and really, I think, quite encouraging efficacy results, it's important to note that there are many good successful options out there, and it may not always be possible to differentiate between them, but we hope to be in that first class.
Great. Thanks.
One moment for our next question. Our next question comes from Joseph Stringer with Needham. Your line is open.
Hi, good morning. Thanks for taking our questions. Just clarification on the deferrals from the 2022 contracts, the $2 billion-$3 billion. Are those locked in, signed APAs and they're just being deferred to 2023, or is there any optionality built into that? And then the second question is just broader-based pipeline. You know, you're expanding pipeline 48 programs, 35 clinical trials. But I was curious if you could comment on the relative mix of the pipeline, respiratory vaccines, immuno-oncology, rare disease, you know, where it stands now and how you sort of see that evolving and that relative mix of the pipeline programs over time.
Maybe I'll take the first one quickly. Yes, those are locked in advanced purchase agreements for 2023, and so they're just shifting to the right from 2022.
Great. On the broader question of the pipeline, as you mentioned, we've got 48 programs, now multiple Phase IIIs ongoing, with some we hope to be quite imminent readouts. As you look at it right now, we have most of our late-stage pipeline is respiratory vaccines for sure, right? We have four programs there, and we expect the flu and RSV data to come out quickly. We will then move rapidly in respiratory into combination vaccines. We have three adult combination vaccines in clinical studies. We have two pediatric respiratory combination vaccines that are moving forward.
That you should expect to expand into very quickly, we would hope, registrational studies over the coming period, which will allow us to then build out what we hope will be the best respiratory portfolio, both from a monovalent vaccine perspective, but most importantly, from combinations against the viruses that matter in the different populations that we really wanna protect, particularly older adults and the very young. Respiratory will be a growth area for us for the near term. You'll start to see some diversification. Again, talking about the late stage, we already have a CMV Phase III program, which is up and running and enrolling and has been, and you should expect us in our latent virus vaccines to add additional late-stage programs.
We're quite passionate about Epstein-Barr virus, as you all know, and we expect to move that in. You'll start to see some first diversification in terms of our latent virus portfolio, some that's already happened with CMV. The couple of things that will come quickly, as well are we hope that the readout from our personalized cancer vaccine, therapeutic vaccine program, and it's really a therapeutic because we are preventing cancer from recurring, but we're intervening in somebody who's got that cancer already. Because of that, it really has a therapeutic profile to it, as intervention. That therapeutic readout that we expect to have over the next month or so, this quarter, will trigger, if it's successful, moving into pivotal stage studies. As we all know, immuno-oncology is obviously a competitive space.
It's a space where there's still substantial need to improve upon the current IO therapy. There are many different histologies and types of cancer in which it will make sense to develop a program if we show a benefit. That expansion could happen very quickly and will be the large diversification into oncology in the therapeutic context outside of the vaccine space. The last one is rare diseases, which we've spoken about. We have a couple of programs that have already started to show some very encouraging results, both pharmacology and potential clinical readouts. As soon as we decide on doses for instance, the propionic acidemia program, and get confident that we've got alignment with regulators in the path forward for that program, you should expect us to move into pivotal studies there as well.
Then, as I said in answering a prior question, that will not just be a one-off for us. Once we really believe we've got a modality, we will be bringing forward many programs in succession in parallel there. As you look forward on how do we think about the diversification of the pipeline to the bigger question, it really is a question of time horizon. You know, right now it's a lot of respiratory, and latent. Very quickly, though, we expect to be both expanding that respiratory and expanding our movement of therapeutics, particularly cancer and rare metabolic disease. That could happen in quite short order based on upcoming clinical readouts.
Great. Thank you for taking our questions.
One moment for our next question. Our next question comes from Mani Foroohar with SVB Securities. Your line is open.
Hi, good morning. This is Lili Nsongo for Mani Foroohar. I just had a question related to volume to be expected. I know that your volume projection, you'd mentioned that, you know, you'd exclude 2023 because of the variability there. I was wondering for 2023, how much of COVID volumes or, I would say COVID revenue, do you anticipate to be driven by the APAs? And also, as you move to more of an endemic model for COVID vaccine, do you continue to anticipate APAs in the future? Thank you.
Sure. Thank you for that question. As I outlined in terms of the volume expectations for next year, outside of the signed APAs, we are looking at a number of variables that could impact the total volume. In the long term, we do believe we should approach this 500-600 million volume, comparable to the flu volumes that exist today. In 2023, there will be a range depending on the viral evolution, the ongoing medical need across different regions, where we see public health authorities coming out with recommendations, as well as just a broader consumer appetite to vaccinate. The reason for the sensitivity on the volume that I shared earlier is we still have a number of variables as we're continuing to transition into an endemic stage.
In the short term, we don't have a clear picture of that total volume and what that could look like, but we do believe from a medical perspective, over time, we should be approaching at least the same volumes as the flu market.
Thank you.
I'm not showing any further questions at this time. I'd like to turn the call back over to Stéphane Bancel for any closing remarks.
Well, thank you, everybody, for joining the call today and for your thoughtful questions. We look forward to speaking with you many hours to come, days to come, and also welcoming you next week for our first ESG day. Have a great day. Bye.
Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.