All right, we'll get started. So good afternoon, everyone. I'm Tara Bancroft, one of the senior analysts here at TD Cowen. And thank you for joining us for TD Cowen's 45th Annual Healthcare Conference. And so for the next session, we have a fireside chat with Vaxcyte. And joining us is Grant Pickering, the Co-founder and CEO; Andrew Guggenheim, the President and CFO; and Jim Wassil, the EVP and COO. So thank you all for joining me. I appreciate you taking the time and having this discussion. And I want to remind everyone in the audience that if you have a question, please raise your hand or shout out, and we'll make sure your question gets heard. So I guess to start out, maybe, Grant, if you could give us a general overview and update on Vaxcyte as it is today.
Yeah, general overview on Vaxcyte. We are a public vaccine company focused on bacterial vaccines. We are utilizing a proprietary platform. It's a cell-free protein synthesis platform. It allows us to do certain things that other folks aren't able to do to make vaccines, including performing site-specific conjugation, as well as making difficult-to-make proteins in the form of antigens to protect against bacteria that we don't want to cause infection. So we've become known primarily for our pneumococcal conjugate vaccines, for which we've been able to generate, on three different occasions, positive phase II data in the adult segment with both our 24-valent pneumococcal conjugate vaccine and our 31-valent pneumococcal conjugate vaccine, showing we can produce more broadly protective effects and actually show improved immune responses relative to today's standard of care. And the next big milestone for us is our initial readout in infants with our 24-valent vaccine.
That's the big news. We expect to have that data later this quarter. Maybe I'll leave it at that.
Yeah, well, I guess we can stay exactly on that last topic that you just mentioned. So for the phase II VAX-24 data coming very, very soon, I think one of the best things to start before we get into expectations is, can you just talk about the primary endpoint? Because I think it's not fully appreciated yet that it is different from the adult study. So maybe some context there for that.
Jim, do you want to take that one?
Sure. So maybe I'll start with the adult so we can have something to compare with. With the adult endpoint, essentially, we compared ourselves on a serotype-by-serotype basis versus Prevnar 20. And we looked at OPA, which is a functional antibody-immune response. And you had to have relatively non-inferior immune responses. In the infants, we have that endpoint as well, but that's post-boost. The way the FDA looks at the endpoints are, they want to make sure post-boost that you have enough, high enough of a titer that you remain protected through the first five years of life. So they want to look at the absolute measure of your titer, or at least relative to PCV20. For the primary series, which is our readout here, which is at the seven-month age time point, we're actually looking at, they want to answer the question is, is that infant protected?
Because there's a lot of disease under one year of age. And the way they do that is, if you go above a certain threshold, which is considered to be protective, 0.35 micrograms per ml, then you are considered to have seroconverted or you're protected. And they want to see the percent of infants who get above that threshold to be similar to that of Prevnar 20. So in this case, we're still comparing to Prevnar 20, but it's a seroconversion response. And it's the percent of subjects who achieve that threshold, the antibody threshold.
Okay, yeah, definitely makes sense. And thanks for providing that. So I guess the obvious next question is to get into expectations. So can you first set the stage by talking about what the other infant PCVs have achieved that are currently approved right now?
Yeah, I can take that one. So the current standard of care is a toss-up between a 15-valent vaccine from Merck or the 20-valent version from Pfizer. Not surprisingly, the 20-valent vaccine has the majority of the market share because it's more broadly protective. But for the moment, both of those two vaccines are recommended. So those two vaccines replaced the 13-valent form of Prevnar. And both of those vaccines were able to produce these sorts of non-inferior sorts of responses relative to Prevnar 13. But that said, they did actually demonstrate that they were producing lower antibody responses and actually lower seroconversion rates. In fact, so much so that in the case of Prevnar 20, they missed on six of the 20 non-inferiority comparisons. So it was meaningful. And so for that first year of life, a substantial portion of additional infants were not protected against those strains.
Now, at the boost that Jim referenced, they were able to recover and actually show non-inferior immune responses, but it is meaningful. Most of the disease occurs in that first year of life, so we have an opportunity to do better with our 24-valent vaccine, not only in the form of being more broadly protective. Our vaccine has four additional strains of the bacteria to provide broader coverage, potentially, but then also, we have an opportunity to improve on those seroconversion rates. We don't have to produce better rates. Even though Prevnar 20 missed on six of the non-inferiority comparisons, it still got approved, still became the market leader. But there's definitely room for improvement, and based on what we've been able to demonstrate in adults, when we compared VAX-24 and VAX-31 to Prevnar 20, we were able to show higher immune responses across the board.
So there's a big opportunity for us to begin to differentiate our vaccines relative to today's standard of care.
Okay, yeah, very helpful context. So then what would you say is the upper limit of the number of serotypes that you could potentially miss on? And separately, I guess, what do you hope to miss on?
Yeah, I think, I mean, the upper limit is probably the precedent that's already been set. So to the extent, as I just said, Prevnar 20 missed on six of the non-inferiority comparisons. It still got approved. It still has become the market leader. We, as we have elected to set expectations leading up to this data point, we felt like that was too low a bar in light of the treatment effect that we've seen in these immunogenicity responses across the adult segment. So what we've been saying is, we don't expect to be perfect. We don't need to be perfect. We could imagine missing on a few of these non-inferiority comparisons at this phase II study. But at least in terms of the immunogenicity responses, we could imagine seeing at least that many showing substantially better immune responses relative to the strains in Prevnar 20.
But of course, things could be better. We have gone 24 for 24 twice and 31 for 31 on these non-inferiority comparisons in adults. So there's definitely an upside case to be made. So that's how we're thinking about the kind of top-line expectations. But then there is also just a phase II versus when it really counts in phase III feature, which we spent a lot of time talking about when we were leading up to our adult data. So the same basic thesis applies here in the infants. These phase II studies are always considerably smaller than your phase III pivotal study. And we're using this study to power that phase III. So when you think about this in ways that matter, you're thinking about how much wider the confidence intervals are for a smaller sample.
The phase II to phase III sample sizes are about 4x larger sample in phase III. The error bars in phase II are going to be wider. Other sponsors have taken a wider berth for defining success. We can go into that. The seroconversion rates that Jim was talking about, you have to be within 10 points. If Prevnar 20 was at 90% of kids being protected, at the lower limit of the confidence interval at phase III, you have to be within 10 points, so 80% or above. In phase II, it's a much smaller sample size. Other sponsors have said, hey, if you're within 15 points in the smaller phase II, that's the equivalent of the 10-point delta when it matters in phase III.
So that's how we're thinking about this data is illustrative of what we'll need to do to get the vaccine through the pivotal phase.
I see, so that use of the 15-point change is just a factor of the size of the trial and the wideness of the error bars.
Yeah, that makes sense. Exactly.
So you also kept saying that you do have the potential for substantially better titers here. And so I guess that, to me, begs the question of whether you could potentially achieve superiority on any serotypes or all serotypes, maybe. But what are your thoughts on that?
Yeah, I mean, that was one of the big outcomes of our adult data was when we went into this program and when we designed this vaccine going back 10 years ago. We thought we could produce a more broadly protective vaccine with more coverage, but at equivalent immune responses. It turned out to be better than that. We showed statistically higher immune responses relative to Prevnar 20 on a considerable number of those serotypes. So in infants, we'll see. I mean, to Jim's point, the seroconversion. It's harder to show a statistically significantly higher response in instances where Prevnar 20 is already at 95% of infants protected. It's really hard to show a meaningful difference above that. But as I said, for six of the 20, those seroconversion rates are much lower.
There is some chance that we could show statistically better immune responses as it relates to seroconversion on those laggards. It will be more likely to occur on the more average comparisons, which will be the booster data point for us to show those kinds of improvements.
Okay. And not only does the number of serotypes matter, but the actual serotype matters, too. I mean, from watching the ACIP meetings over the last year, it's very clear that they really care about serotype 3, serotype 4. And are those serotype compositions really the same in this infant population? Like, should we focus on the most prevalent circulating serotypes? Or is there anything in particular to the infant population we should focus on?
Well, the first thing I'd say is you got it exactly right. Each of the serotypes has their own distinctive epidemiological circulation rate. And so you can rank order them from highest rate of circulation to lowest. So anything that's circulating more than another one is going to be more important. That said, it hasn't really played out that that's been a big differentiating feature. Because even, as I mentioned, in the case of Prevnar 20, they missed on six of those comparisons. And they were still included in the label for the vaccine. So it's not as though they're pulled out of your vaccine and you're not given any credit. And that's because the responses are high enough that people believe they're going to work. They're just not as good as higher immune responses.
For us, I guess the thing I'd say, and Jim, jump in if you feel the need. When we designed the different doses to test for VAX-24 in adults, and we made those same choices for the infants, we elected to increase the dose for certain serotypes where we felt like there was strategic importance to it. In many cases, that was because of the epidemiological circulation rate. I think we have built that into this protocol. We'll receive the data to suggest whether or not a higher dose is warranted for some of those strategic strains.
I see. So how many of those strains did you do that for?
It's a dose ascension trial. We have three different doses that we're testing. One is a 1.1 microgram across the board. The other is 2.2 microgram across the board. Then there's a mixed dose arm where seven of the 24 are dosed at a higher antigen level. Those were explicitly to test whether or not we could benefit from a higher dose on a relative basis.
Your expectations for the mixed dose here, I know in the adult VAX-24 data, there were some mixed results for the mixed data. Should we kind of expect the same kind of similar thing here?
Good memory. I'm glad you brought that up. So indeed, when we pushed that dose, we saw that the seven strains where we used an even higher dose, all of them benefited from that. But a few of the ones where we had not pushed the dose suffered a bit. So we used that data to inform on how we took VAX-31 into the clinic. And for those three strains who suffered a bit, we increased the dose of them. And we recovered in ways that they were right in line with the rest of them. So we already know that that's an option that's at our disposal. We would have the opportunity, if warranted, to make a similar adjustment for VAX-24 going from phase II to phase III.
And then, of course, the VAX-31 study in infants is already underway, where we took some of those adjustments and applied them. So yeah, that is an option that's at our disposal.
That is a good segue to talk about VAX-31. So I think one thing that people are curious about is, what would you need to see in the VAX-24 or the VAX-31 data to decide to move forward with one in particular? Or no matter what, you're going forward with both?
Yeah, no, certainly a topic about which we get asked. The plan is to complete out the phase II trials for each of VAX-24 and VAX-31 in the infant population. The question, of course, is, would we make a change as we did in the adult indication where we chose to go exclusively into phase III with VAX-31? That question will come up. It's not a question right for today. Over the next nine months or so, we'll have in hand both the first and second co-primary endpoints for the VAX-24 study. Then we'll have to pull together all the data, including the safety data, to submit a package to engage with the FDA in an end-of-phase II meeting. That meeting will happen likely at about the time we'll be in receipt of the first co-primary endpoint data for the VAX-31 infant study.
With the stellar data we saw in the adult population, with data in hand for the VAX-24 infant study for both endpoints and with this first endpoint in VAX-31, I think we'll have a good sense about the prospects for the booster data for VAX-31. At that time, we'll look at several factors, including what is the gap right now. It's about 12 to 15 months between the potential launches of each of the two programs. What is the gap between the prospective launch dates? We'll do the financial analysis. We'll assess the operational feasibility of executing parallel phase III trials. To some degree, look at the competitive landscape and make the decision, will we move both programs forward into phase III and launch VAX-24 prior to VAX-31? Or instead, will we make a decision to pursue exclusively VAX-31 in that population?
So good question, one that we can defer a decision on.
Yeah. So in there, you said you'll also consider the competitive landscape. So one thing that I think is interesting is that you don't particularly seem concerned about all the comments that we've heard from Merck, Pfizer. And so I'd like to spend a little bit of time on your technology. And why can you guys actually achieve such substantially higher titers? Why do you have less carrier suppression? And maybe do you have an idea of memory durability of responses and like a T cell characterization? And I guess this is a question for Jim.
Sure. So well, we'll start with making sure we understand what the technology is. This is a pneumococcal conjugate vaccine. It's called a conjugate because you attach a polysaccharide to a protein. And that protein is a carrier protein because polysaccharides don't get processed by T cells. So as the name is implied, the protein carries the polysaccharide to the T cell. And you get a T cell dependent response. Now, the question is, how do you prevent what is called carrier suppression? Carrier suppression occurs when you have so much of that carrier protein that the immune system actually responds more to that carrier protein than it does to the polysaccharide, which is what you want. We're using what's called CRM as a carrier. So is Pfizer. So are some of the others. Ours is a modified enhanced version. But CRM is a toxin.
So it is a very immunogenic protein. So the idea is you want to have as little as possible. What we have done and what our technology does, we are able to, because we do a cell-free protein synthesis, we can take certain amino acids on that CRM protein and replace it with non-native amino acids. And we can do site-specific conjugation. So that site-specific conjugation does two things. One, it means we can load more polysaccharide onto that protein carrier. So we need less of that. But the second is we don't block the T cell epitopes on that carrier protein. The technology that is used for PCV and for other conjugates randomly conjugates the polysaccharide on that protein carrier. And sometimes the polysaccharide inadvertently covers up that T cell epitope. So our technology does two things. It makes the carrier protein more potent.
And we can use less of it. So we're still subject to the same rules of the game. We're still going to see carrier suppression as well. But because of our technology, we've been able to extend the runway. And with 31, as you can see, we may have even further runway to go, which is going to be important, especially since this disease can tend to cause replacement over time. And other strains could increase in circulation. Our technology, we believe, can adjust to those changes.
As a vaccine scientist, I find this so interesting. I wish we could spend more time on it. But let's see. We have 10 minutes left. So I guess one of the next things that would be really helpful to talk about is a discussion of how ACIP has viewed the previous data for the other infant products. And what were the major either pain points that they brought up or sources of strength in the others' data that is influencing how you're thinking about how ACIP can think about you guys?
Yeah, I think it's been very, very clear if you follow the discussions as they've considered the various alternatives that have become available. So we've had the 7-valent, the 15-valent, sorry, 7, 13, 15, and 20 now. And the last conversation was the most relevant, which was upon the approval of Prevnar 20, the debate was whether or not that vaccine warranted a preferred recommendation, which would have given it complete market share. And the conversation went along the following lines, which is half of the voters said, we should give this a preferred recommendation. It's more broad spectrum. The other half said, yeah, but look how much lower the antibody responses are. That's concerning. And so they're trading off coverage versus immunogenicity. And this is the promise of our technology. Of course, we've proven this already in adults.
We'll find out soon enough how it's working in infants. But with our technology, because of what Jim described, we're able to create broader spectrum vaccines without adding more protein carrier because we use less per conjugate. And that's resulting in the broader spectrum that the ACIP is looking for without that diminution in immunogenicity. So if we can deliver on that, I think we have an opportunity to address both of their concerns in one vaccine.
Okay. And this is a more broad question that it's not necessarily infant. It could also be adult. But do you think that there's a willingness for ACIP to issue a preferential recommendation? And if so, do you think it matters?
Yeah, I think it does matter. Because if you get the preferred recommendation, it ends the debate. I mean, SHINGRIX was the best example when it did get the preferred recommendation over Zostavax. Zostavax was removed from the market 18 months later. So it does matter in the short term. In the long run, it may not make a lot of difference because the current state of play, at least with the time frame for which we have good data, when the 15- valent and the 20- valent were available in adults, even though there was not a discrete preferred recommendation, Prevnar 20 ended up with 98% of the market share. So the market goes to the most broadly protective vaccine because it should, right?
I mean, if someone gets a less broadly protective vaccine and gets sick with one of those strains for which they could have been vaccinated against, they're going to be very unhappy. And there's a history of that creating liability. So I think one way or the other, what we're trying to do, and we're making good progress, is to give the market what it wants with a more broadly protective vaccine. But you have to be able to supply the market. That's one of the really big considerations. We are very much aware of that. That's why we're building the dedicated manufacturing facility to be able to satisfy the full market demand. But it would never be a decision that they take lightly. So you have to have all of the dimensions. And I think we're heading in the right direction for that.
I guess now if we're talking about the market, supplying the market, if the market goes to the broadest vaccine, what would you say to people that have concerns about competing with a beast like Pfizer that is incumbent and entrenched?
Maybe you want to take this?
Yeah, no, I think this space has proven, as Grant said, that the market share has gone to the vaccine with the broadest coverage. And we hope to be in the market not only with a vaccine with the broadest coverage, but higher immune responses than historically has been observed. And it's not as if this market has been absent competition over the last 25 years. Pfizer has just always had the vaccine with the broadest coverage. And GSK had an entrant. Merck had an entrant. Those were large companies with substantial resources. But Pfizer had the best product, essentially. And even in the context of the current dynamic, you have Pfizer and Merck. Prior to the approval of CAPVAXIVE, you had PCV15 and PCV20. Merck and Pfizer, and Pfizer got 97%, 98% market share because of the broader coverage.
So in the context of an ACIP recommendation, whether preferred or not, in the context of the reimbursement that FDA approval and ACIP recommendation provides, we think it's very feasible for a company like us to commercialize independently. That is our plan and to garner market share and stand up a sales organization or commercial organization that is 300-400 in total. So we're excited about that opportunity to compete.
As are we. So we have five minutes left. So I do want to make sure we touch on, you already know what I'm going to say, the political climate. So I know we've heard a lot of comments recently, and especially about infant schedules. And somebody in particular has said a lot of comments about what they want to do with vaccines. And there was a recent outbreak of measles in Texas. And anyways, just kind of want to get your general thoughts about the stability of the PCV market and the future of your products in it.
Sure, yeah, I'll take that. But we totally appreciate that the news flow, volume, and amount in this moment can be unsettling, can feel unsettling. It is not uncommon in periods of administration changes for that news flow to be heightened. And in the context of this administration and this head of HHS, they've made its stated goal to shake things up. So I think we have seen we should continue to expect more news flow. I think what is critical is to separate the news flow and the politics from the substance and the policy. That's ultimately what will matter. And Tara, you mentioned the measles outbreak, right? We are encouraged to see the current administration, HHS's response to this measles outbreak. It's noted as a top priority of HHS, noting support for the immunization programs in Texas.
And so we're seeing, when serious public health matters arise, at least in this moment, the HHS and its leadership kind of reverting kind of standard playbook for responding to what is definitely a crisis. And I'm sure many of you saw the op-ed that was put out on Sunday, and RFK's recognition of the important role the MMR vaccine plays in reducing disease, not only for those that to protect themselves, but also to provide herd immunity for those that, for whatever reason, can't be vaccinated and that significantly heightened disease rates in the absence of taking the vaccine. So that's certainly something that was important and more substance rather than rhetoric to us. As we think about our programs, we've been. This landscape is 25 years in the making, right? We've been protecting kids for 25 years, adults for 15 years.
It's incredible kind of efficacy and safety profile that these PCVs have, sort of the bedrock of our immunization programs. As we look to our programs, as Grant said, we are drafting off the precedent, making very subtle but important changes that have resulted in the data we've seen. We are leveraging a well-established regulatory pathway that has been intact for decades now. We're confident that the strength of our data and the kind of proof and now the science, ultimately, FDA and ACIP will make data science-driven decisions. The combination of sort of this bedrock immunization program, the regulatory pathway that's been established in our data, we're confident about having a clear path forward and excited to take these next steps as we turn over this first infant data card and stand up a phase III program by the middle of this year.
Great. So we have a couple of minutes left. And I did want to give Jim the chance to talk about his favorite children in the pipeline. So if you had to choose one to feature today and what you love about it, what would you choose? And what do you have to say about them?
You can't choose what baby is your favorite or what kid is your favorite. But if I had to talk, let's talk about the one that's next in line. How's that? Which is Group A Strep. I think Group A Strep is one of the most underappreciated diseases out there. It causes more than 500,000 deaths every year. It causes an autoimmune reaction called rheumatic heart disease. And if you don't get aggressive antibiotic treatment, then you can lead to this autoimmune disorder. And so the amount of antibiotics that are pumped in because of this, you're talking about almost one out of every five antibiotics written in the U.S. for kids under the age of 10 are due to Group A Strep or presumed Group A Strep. So you have a huge issue on antimicrobial resistance as well.
And then coming out of COVID, you see the survival of the fittest, we call it. Everyone was quarantined. More invasive strains of Group A Strep have emerged. And so you're seeing higher rates of invasive disease, higher rates of drug resistance. So we have leveraged our technology. In this case, it's only one conjugate, but we're taking universal polysaccharides. So it covers all the Group A Strep. And we're linking it now to another protein, which is a virulence factor for Group A. We can do, because of our site-specific conjugation, avoid both T and B cell epitopes. So we get a great immune response to both with two other virulence factors. And we're moving that one forward. We can guide shortly when we expect to start moving forward with an IND. But we made some substantial progress over the last few years.
I'm very excited to hear the progress on that as soon as you have it. Unfortunately, we are out of time. I really appreciate all of you for being here in this great discussion, the whole Vaxcyte team as well for being here, and everyone for listening in the audience. Thanks so much.
Thank you.
Thanks.