Thanks everyone for coming. Next up, we have a fireside chat with Vaxcyte, and we have Grant Pickering, the Co-founder and CEO, Andrew Guggenhime, the President and CFO, and Jim Wassil, the COO. So I just wanna start out. Well, first, I should introduce myself. I'm Tara Bancroft. I'm a senior analyst here at TD Cowen, and so can you guys maybe just start, kick it off with a general overview of Vaxcyte and an update of everything that you have going on before we dive into the pipeline?
Sure, yeah. Thank you guys for coming. I'm Grant Pickering. Vaxcyte is a company dedicated to developing bacterial vaccines. We have two lead programs to prevent pneumococcal disease. We have a 24-valent vaccine, for which we have very compelling phase II data that's read out in the adult population. That's a phase III ready program. We also have a 31-valent pneumococcal conjugate vaccine that's in the clinic, and we're expecting data from a large phase II study in the third quarter of this year. That's the primary focus of the company. The company is built on a platform that is a cell-free protein synthesis platform that allows us to perform exquisitely specific conjugation, and allows us to make difficult-to-make proteins, which could be the basis for some future novel vaccines as well.
The pneumococcal conjugate vaccine space is characterized by the size. It's an $8 billion annual market. It's a very well-understood mechanism of action that prevents this disease, and the coverage of the vaccine is really the primary adoption driver. So the current vaccines that are available today are either a 15-valent vaccine or a 20-valent vaccine. So our 24- and 31-valent vaccines have an opportunity to deliver substantially broader coverage to prevent more disease. And one of the real advantages for this class of vaccine is how effective they are, and the effectiveness is tied to the antibody responses. And that is so clear that for approval in this class, you only have to show those antibody responses. So you no longer have to do what's called a field efficacy study to actually follow people to confirm they don't get sick.
If you get the antibodies, we already know that happens. So that creates a more expedited path to the market. And so the phase II data, when it reads out, it really tells you, with precision if you've got it or not. So the phase II data that's read out for VAX-24 was extremely encouraging. What else? What do we have going on? So, the biggest milestone that's coming up for us later this year is that, phase II data for VAX-31 in adults. We announced yesterday that we've completed enrollment in the VAX-24 infant study. These are the two big markets, and that data will read out next year. So we have really two meaningful milestones coming up for the company in the not-too-distant future.
I could go on for all 30 minutes, but why don't I pause there?
Sure, yeah. So I guess, obviously, let's dive right into the PCV pipeline. Can you first tell us what is available on the market and where you think the greatest need still exists?
Do you wanna go? So right, right now, I think, you know, PCV vaccines, I think, have had a huge impact on this disease. The disease burden is phenomenal in terms of burden. It's, you know. We talk about invasive disease. Well, invasive disease is relatively more infrequent than some of the others because, you know, for instance, pneumonia occurs 100-fold greater than invasive disease. You have ear infections. Otitis media, almost every kid gets an ear infection. And PCV started with a 7-valent, and they had, you know, substantial impact. And then Pfizer came out with a 13-valent, which also had decent impact, but it covered about 28% of the circulating strains in the U.S. Recently, 15-valent came out from Merck and a 20-valent from Pfizer.
The 20-valent covers about half the strains that are circulating in the U.S. So you're talking about half of the disease burden is currently covered by the approved PCVs. You know, that said, so we're looking at developing a 24-valent, and we're looking at developing a 31-valent, as Grant mentioned. 24-valent covers 64%, and the 31-valent covers 95% of circulating disease in the U.S. and 98% in Europe. So huge unmet medical need, substantial disease burden. Like I said, Pfizer has done a wonderful job, and they're covering about half the strains, but if you can cover the other half, I think it'll have a huge impact as well.
Okay, so last week there was an ACIP meeting, and, you know, that mostly covered the review of Merck's program. But can you summarize what you took away from that? And, not even just if Merck is going to be successful, but in general, there was a long discussion of how the committee viewed the need and serotype coverage and things like that. And so I'm wondering if you could just kind of give your high-level takeaways that could help you learn in your programs.
Yeah. Maybe we can tag team this one.
Yeah.
So just, just to set up, the conundrum, so as we've been talking about, these vaccines have been out for quite some time. They're wildly effective. They're so effective that the strains that are included in the vaccine are largely taken out of circulation. So this is a bacteria that lives in people's upper respiratory tract, and it's carried and passed on from one person to the other. And when the strains that are included in the vaccine are basically taken out of circulation, other forms of the bacteria fill that void. And so what happens is, the vaccine that was preventing a lot of disease is no longer preventing the disease that's circulating any longer. So it puts pressure on the developers to add additional strains to increase coverage, but you can't stop vaccinating against the original strains, or they'll come back.
So what's happening right now is a recognition that the incumbents, which is, for the moment, Pfizer and Merck, they're constrained with the number of strains of the bacteria that they can include in the vaccine. So they basically can't get past 20 or 21 different strains of the bacteria and still get it to be adequately immunogenic. So Merck, to their credit, followed a slightly different strategy, which is they said: "Well, look, these-- some of these strains are under control, so they're not circulating, others aren't, so let's shift the coverage of the vaccine to have some of the older strains and then some of the newer strains." But what the ACIP was wrestling with was, well, there's still some disease from these older strains. If we switch over to this new V116 vaccine, those other strains will only become more problematic.
So they're wrestling with: Do you keep the older 20-valent vaccine or adopt the newer 21-valent vaccine? And it's not entirely clear how they're going to act, but it's clear that one doesn't have a profound advantage relative to the other. So it's seeming more like they're indicating they're going to provide support for both of them, but knowing that neither of them is a great solution, you need both of them to get better coverage. We're trying to put all that coverage into one vaccine, which would be much better, obviously.
Do you guys have anything to add?
No, I think Grant covered it pretty well in that, there is concern that if you stop vaccinating against some serotypes, some strains, that they could reemerge, and there was a lot of concern over serotype 4 in particular. Yes, because the ACIP is also concerned about disparities, especially in underserved communities. So serotype 4 is a lot more common in homeless and in Alaskan Natives, and they were concerned that if you stop vaccinating... So, I don't think there'll be a preferential recommendation for Merck's V116, meaning that the doctor should choose V116 preferentially over PCV20. So as Grant said, I think you're going to have equal recommendations for both and allowing the provider to decide. So I think it'll be more of a marketing battle.
The other component that we didn't touch on was they are also talking about moving the recommendation down to 50 years of age.
The committee decided that the benefits outweigh the risk, and the answer to that was probably yes. So it wasn't a firm yes. So it's a, it's a strong maybe. I think they'll debate that and potentially vote in June on whether to move it down to 50, but I think they're going to wait until V116 is on the market and then revisit that about a year later. But I do think eventually, and especially by the time we launch our product, I think you'll see a recommendation for 50, followed by a booster at 65 years of age. I think the market's moving to that, but, but not, I don't think, in, in the next ACIP.
Just out of curiosity, too, so it sounded like in most offices or practices, they're going to have both and offer both. So how do you think they'll make that choice? Just based on preference for who they're administering it to, or the doctor themselves?
Good. I think that's a good question. I think a lot of doctors will see that the Merck V116 has broader coverage-
has 83% coverage relative to Pfizer's PCV20, which I said had 50, and they'll say, "I'm going to do that." Pfizer is saying, "We have an indication for pneumonia," because as you may recall, I said that pneumonia is about 100-fold more common than invasive disease. So Pfizer is going to say: Do you really want to switch when they haven't demonstrated protection against pneumonia? So I think you're going to see a tough battle.
I think you're going to see both products continue to be administered. I think Pfizer has an exceptionally large sales force calling on these individuals already because they've got a COVID vaccine, and they've had their pneumococcal vaccine. So I think Merck's for an uphill battle, but I think, I do think that they will definitely get some inroads with broader coverage.
Yep. Agreed. So you guys have 24 and 31, which is more valency, more coverage than anyone has. So what is it about your platform that makes it so that you, you guys can have the broadest coverage, as opposed to anyone else?
Yeah. So what we're doing that's slightly different relative to the competition is we have a novel form of chemistry that allows us to manage the ratio of these immunogens. So, like, without getting into all the gory details, there's a protein carrier that is what confers the T-cell compartment's activation with this class of vaccines, and that protein is a diphtheria toxin. So it has nothing to do with pneumococcus, but the T-cell activation directs the immune responses against the pneumococcal antigens. But if you have too much of the protein, the immune system gets hijacked and is generating antibodies against that diphtheria toxin at the expense of the responses to the pneumococcal antigens. So you can't get the right responses without it, but with too much of it, it becomes a problem.
So we're able to leverage effectively the same diphtheria toxin protein, but when we make our conjugates, we're able to use about half as much in each conjugate and still get the good immune responses that are necessary for protection, because we're able to ensure that the T-cell epitopes are always exposed to the immune system. That's how we believe we can get away with less, and that, in fact, we were shooting for equivalent immune responses. But the clinical data that read out over the last two years actually showed we were getting better immune responses, and again, we think that's because the T-cell epitopes are always exposed to the immune system in ways that the old chemistry couldn't really guarantee that. Oftentimes, it'll be covered over with the polysaccharide pneumococcal antigens.
It's these carrier-sparing conjugates that allow us to expand coverage, in ways that are creating these advantages.
Okay. So, you mentioned all the data that you've shown over the last two years. Can you, can you recap more specifically what you've shown for VAX-24?
Yeah. So, what we showed in two separate phase II studies was that, when we compared our 24-valent vaccine against the currently marketed 20-valent vaccine from Pfizer, across the 20 common strains in both vaccines, on average, we had 25%-30% higher immune responses, and we had four more strains for which is conferring broader coverage. And what the convention has been is that, the price to get broader coverage was the expense of lower immune responses overall. So that's what's been conventionally shown with broader spectrum vaccines, and it's usually about a 25% degradation. We showed, again, a 25%-30% increase in immune responses. So we showed that in 50 to 64 year-olds, and then we repeated that in 65 and up adults. In fact, the improvement even increased a bit.
This was an unprecedented finding to get broader coverage and actually see better immune responses, and a safety profile that was right in sync with what's been shown historically.
Okay. And what about the mixed dose arm? What could we learn from that?
Yeah. So, these were dose-ranging studies, and one of the things that we were able to examine was what happened if we increased the dose of certain conjugates in the vaccine. And so in this, as Tara put it, this mixed dose cohort, we doubled the dose of seven of the conjugates in VAX-24, and that actually replicates the cumulative amount of the protein carrier that's in VAX-31. So in that VAX-24 clinical study, we were able to give us information that informs on how we think the clinical results for VAX-31 will look, for which we'll get the results later this year in the third quarter. And the data was really encouraging. Again, we had many instances where we showed improved immune responses relative to Prevnar 20.
There were a few strains that we did see lower immune responses, but they were still very encouraging, and I think a profile that would put a program on track for advancement. You know, we'll see the results of the VAX-31 study in earnest in the third quarter.
All right. Well, speaking of that, you know, getting prepared ahead of that data, what could we expect to see there in a little bit more detail? How are you setting expectations for that, and how are you... Let's start with, what are you using as the lower bound for non-inferiority? Is it-
It's the conventional 0.5.
Got it.
So yeah, the way this works is I describe this phenomenon of serotype replacement. So the strains that are in the vaccines get tamped down, and other strains emerge. And so that's been what the regulators have been trying to address. So they want to pull through broader spectrum vaccines. So they're they've set a standard where you just have to be non-inferior to the current standard of care vaccine. And as Tara is setting up, that definition of non-inferiority is you just have to have greater than one half of the antibody titers of the standard of care vaccine. And the technical hurdle is the lower limit of your confidence interval has to be above 0.5.
That's the standard that the FDA applies at the BLA review juncture, and we're using that same standard for these phase II studies. So, the study is a combination of the two age cohorts that I described earlier. So Jim put it all together into one study. So we have 1,000 subjects that are over the age of 50, and we'll get the results. We'll have the head-to-head comparisons against the common 20 strains that are in both Prevnar 20 and VAX-31, and then the incremental 11 strains, of course, we won't have a comparator, but in that case, you look at the fourfold rise in antibodies relative to prior to the vaccination.
So, you know, the FDA has allowed strains to actually be inferior in these other vaccines that have been approved over the last couple of or actually all of the instances, in exchange for that additional coverage. So even if we were to miss on a few strains, that would be par for the course when you're adding coverage. And in the case of VAX-31, as Jim pointed out, we're pushing coverage all the way to 95%, and the way they think about it is the margin of error is correlated to the increase in coverage.
I see. Which are the strains or serotypes that are most important? I know that this was a focus of the ACIP meeting, like these 15B and 15C, and which ones—you know, when we're looking across the data for all of the serotypes, like which ones would you highlight?
... Well, 15B and 15C, the discussion was about cross-
Right
- protection.
Yeah.
It's a common strain, but it's not one of the top, I would say.
Serotype 3 clearly is one of the ones that it's probably one of the nastiest bugs out there. It has the thickest capsule, and it actually sheds its capsule polysaccharide. So it basically diverts the immune system away from viable bacteria and goes after these shells. So it's really difficult to kill, and that one is one of the more common ones. 19A, 19F, those, I'd say, are your top three in terms of the incumbents, the ones that have been in the traditional vaccines. For me, you know, 9N has become more and more significant, and that's important to us because it's one of the ones that's not in PCV20. It is in our 24. Obviously, it is in V116 as well.
But that one is, I'd say, another important one. And then for me, the last one I would say is more of a pediatric concern, is 35B-
... because it causes 15% of otitis media. So not as common in invasive disease, but if you can prevent 15% of strep pneumonia-caused otitis media, that's quite significant as well.
Yeah. Okay, that makes sense. So, what do you think the likelihood is of you being able to demonstrate superiority on any of these strains or total? I mean, I know you said that you have it powered for it, but you did see it with VAX-24, so I'm curious how you would place a likelihood on that.
For VAX-24 in adults, based on our phase II data, we are powering for superiority. I think we have a very good chance of meeting that criterion for at least four-
... all the way up to maybe even eleven-
... depending. And you know, we've designed it in a sequential analysis to try and preserve the p-value and as many times as we look, but I... Yeah, it could be as many as 11 that we could demonstrate.
For 24?
For the 24
Yeah
... in adults.
Yep.
Yes. . We haven't seen any other data yet, so we-
Yeah
... didn't do any powering.
No, of course. Okay, so yeah, the, you already mentioned that the serotypes that you've included, that it covers 95% of circulating disease?
Yes.
That's compared to 50% for existing ones?
Yes.
V116 is?
84.
84. Okay, got it. Got it. So, all right, the big question is: What do you think you need to see in order to take 31 forward or 24 forward?
Yeah, I think if we see a profile that would be an approvable profile, that would be the program that we'd go for. So the advantage that VAX-24 has shown is coverage advantage over Prevnar 20. Yes, it's shown superior immune responses on quite a number of strains, but that's kind of uncharted territory. The historical measure and primary adoption feature is coverage in and of itself, independent of any superiority .
That's really not been the story. So VAX-31, with the breadth of coverage that it has an opportunity to provide, that would be the winning hand, from our perspective. So even if we were to miss a few of the non-inferiority comparisons, that would be, a program that we'd imagine advancing in light of-
... the coverage advantage.
Okay. Can you describe what you think the phase III is going to look like?
Sure. So-
Either.
So, yeah, in this field, we've got a lot of good examples of what a-
Yeah
... proper phase III should look like and what's led to an approvable product. So, we're not going to get fancy here. We looked at both on clinical trials as well as some of the FDA documents for both Pfizer and Merck, and I think we've reproduced a program that gives us a very strong phase III program. We need 3,000 subjects exposed for safety minimum. That's the FDA requirement. We also need to do a pivotal non-inferiority to demonstrate non-inferiority immunogenicity, and then we have to do what's called a lot to lot consistency study, where you make three manufacturing batches in a row at scale, and you show that you can be immunogenic. So we have the first two studies, and we're still not at 3,000 subjects, so let's add a few studies.
So we're going to do concomitant use with adult vaccines like flu. We're going to look at those that were previously vaccinated with other pneumococcal vaccines and show that they benefit from our vaccine. I think that's going to help with the ACIP in terms of a catch-up recommendation, and then we're going to do a bunch of at-risk individuals. You know, the ACIP is talking about moving the age down to 50. The reason they're doing that is 30% of adults aged 50-65 are at risk for pneumococcal disease. So they want to feel comfortable if they move that down to 50, that you're actually going to be preventing that core group that are at higher risk.
So we'll do some at risk, and then we're going to look at a booster study to show that if they do a 50-year-old recommendation, they're going to have to give another dose at 65. We're going to show that a boost actually gives a strong booster or amnestic response. So those are the main studies that we're going to do.
... in phase III.
I would just add that for VAX-24, we did hold an end-of-phase II meeting with the FDA at the end of last year and reached agreement on all the key principles of this phase III program.
Quite comfortable with this design, based not only on the precedent, as Jim said, but importantly, the interactions with the FDA.
Yeah, definitely. Okay, so you mentioned this manufacturing study. So I think one of the underappreciated things about getting into the high-valency PCV market is how difficult the manufacturing is. And can you kind of walk through the learnings that you guys have, and like why you guys now have successful manufacturing, and what goes into that that you think you now have the know-how to do?
Well, maybe I could start. Yeah, I think one of the things... When we started this company 11 years ago, one of the things that we had going for us was the recognition that the ability to characterize this class of vaccines physicochemically correlates with the immunogenicity. So we knew if we made the conjugates in proper conformation, that they'd be immunogenic. So we had that as a guide, and that was extremely valuable to get on the right track. And so it was just a matter of ensuring, through the assays that were developed, that we were making the conjugates that would adhere to what is driving the mechanism of action. So that's kind of what got us started, and then it was just a matter of making all of the requisite components to make a vaccine of this rep.
So of course, in the case of VAX-31, it's 31 different conjugates made separately and then intermingled at the end of the process. So it was getting all of the groundwork laid early and then applying it across a vast array of different components.
Yeah. Okay. So then, let's move on to the market. So what do you think is the size of the total market, and how will 24 and/or 31 play in? And I understand this is a large question to ask because you have both adults and infants, so maybe you could start with adults then infants.
Sure, yeah. The total market, as Grant mentioned at the outset, is about $8 billion in size. That's comprised of both the adult and infant market. The infant is the larger of the two, comprising about $6 billion of the total $8 billion global market, and the adult component, therefore, the balance of about $2 billion. Multiple third-party reports and many of the sponsors are projecting continued growth in this market, up to $12 billion-$13 billion in size, driven principally by growth in the adult market. That market historically has been a one-dose market, and it's been principally a U.S. market. We're now beginning to see countries outside the U.S. recommend adult vaccination, the first of which was Germany just a couple of weeks ago.
And then in the U.S., this discussion at ACIP about the potential lowering of the age recommendation from 65- 50 will not only open up a larger market, given you have more adults who enter year 50 of age-
... than do 65, and then turning the market, as Jim also alluded to, to a prime boost market like we see in the infant population as well.
How much incremental population does 65 - 50 add?
There are, right now, about... Every year, about 3 million adults become 65. So we'll say roughly the same, but there's gonna be some fluctuations-
... but let's say three. But there are 65 million adults between 50 and 65.
If there's a recommendation down to 50, there's now a recommendation for anyone between 50 and 65 to get a pneumococcal vaccine.
There's a huge catch-up opportunity.
Once that gets through the system, then you're gonna see roughly 3 million coming through at age 50 and 3 million coming through at age 65. Right now, they're saying about 65% of them are getting a dose, so you-
... say maybe 2 million each, so about 4 million doses probably at steady state.
Interesting. Do you think there'd be the same demand between the 65s and the 50s?
I think it's gonna be higher overall because-
Yeah
... I mean, the earlier you get a chance to start immunizing. So yeah, so I'm giving you a more conservative estimate.
Yeah.
But it can be up from there just because, yeah, if you have between 50 through the end of your life to get a pneumococcal shot, the odds of you ultimately getting one eventually are much higher.
All right. Yeah, thanks. So I see that we have a minute and a half left, but I wanted to give you all the opportunity to discuss the rest of your pipeline. I know you constantly talk about VAX-24 and VAX-31, but what other programs do you have? Maybe tell me your favorite one. Let's go down.
Do you wanna do the Group A Strep one, or you want me to?
They're all my favorite, so you can do the Group A Strep.
Yeah. So we have another glycoconjugate vaccine right behind the pneumococcal conjugate vaccines. It's to prevent Group A Strep disease. There is no vaccine for this bacteria. This is one of the bacteria that really came on the screen after COVID. So this is a problem in not only adults and children, but the magnitude of invasive disease in adults significantly exceeds threefold higher than the amount of invasive disease that pneumococci cause, and that's a $2 billion market today. So this is a really important vaccine that we have in our pipeline. We have a universal antigen that we think will give it broad protection and could be a first in-class vaccine, something we're really excited about. What, what's-
I would only say we expect and plan by the end of the year two, and it guides when we'd expect that program to submit an IND and get into the clinic.
Yes.
So looking forward to doing that.
Yeah, I'll just add, the reason they're all my favorite is, I'm a big proponent of trying to address antimicrobial resistance, and I think vaccines can be a solution for that, and it hasn't been as considered. But if you look at the top reasons for antibiotic scripts, tuberculosis is number one.
Strep pneumonia is number two. We're working on Shigella. You know, we're working on some others. If you look at the list, we haven't disclosed them, but if you go down the list, you can guess. If we can get vaccines that help to reduce disease, help reduce antibiotic scripts, we can at least mitigate the pace at which antimicrobial resistance is occurring. So for me, that's why I wanna see if we can get a broad platform that can be an AMR-based platform.
I agree. I mean, if you, if you could tackle that problem, you'd be a hero because there's very few people that are willing to make next-gen antibiotics, and if you think about it enough, it's something that could keep you up at night.
Yeah.
But we're all looking forward to the data and seeing your plan for phase III, and, with that, I guess, I guess we should end it. But thank you for taking the time to be here, and thanks, everyone, for, for-