Okay, good afternoon. Welcome to the Cantor Global Healthcare Conference. My name is Carter Gould, Biopharmaceutical Analyst here at Cantor. Thank you everyone for joining us. I'm pleased to welcome Vaxcyte to the stage. We're joined by CEO Grant Pickering, Andrew Guggenhime, President and CFO, and Jim Wassil, COO. Gentlemen, thank you very much. I think before we get started, maybe just a brief overview of the company and any other opening comments you wanna make, Grant?
Yeah, sure. First of all, Carter, thank you for having us, and thank you all for coming. Vaxcyte is a company focused on vaccines. We have a proprietary cell-free protein synthesis platform that allows us to perform very precise conjugation of vaccine immunogens. We have been applying those technologies primarily toward our pneumococcal conjugate vaccine franchise. We have obtained very compelling results with our lead vaccine, which is called VAX-31 in adults, and we have an ongoing phase II study in infants with VAX-31. I'd say the headline for our technology is that we're able to create broader spectrum versions of what has been a tremendously effective class of vaccines, and produce broader spectrum vaccines while actually improving immunogenicity over precedent lower spectrum vaccines, which is entirely unique relative to how this class has evolved.
Usually, you're sacrificing coverage and accepting lower immune responses, and we've been able to produce a combination of both, which is broader coverage and better immune responses, and that's really what's propelling our lead VAX-31 program toward, hopefully, a market introduction in the not-too-distant future. And we are on the verge of initiating phase III clinical development of that program, and, we will look forward to applying this technology to other vaccines as time goes by. But the PCV franchise, as we call it, is really the centerpiece of the company today.
Perfect. Okay, great. So about a month ago, you guys had a couple updates. Maybe if we just focus first on the adult setting, and frame sort of the end of phase II feedback and what that means for phase III.
Yeah. So obviously, vaccines are in the news quite a bit these days, and there's a lot of anxiety, understandably, about how vaccines are being developed in this moment. But we were able to announce last month that the program for VAX-31, as we have emerged out of end-of-phase II conversations with the FDA, we were able to announce that the program is exactly the sort of composition that we had been expecting all along. So these vaccines are now approved based on validated surrogate immune endpoints, which have correlated with efficacy historically and have resulted in the elimination or drastic reduction in disease for the strains incorporated in these vaccines, based on this path to approval. So we were able to announce that our phase III program for VAX-31 will be getting underway.
We plan to initiate the phase III pivotal study in the fourth quarter of this year, and we were also able to announce that the balance of the phase III studies will go off as we had been planning. We will have more than one initiated before the end of this year. The balance of the phase III studies will initiate next year, and the results of those phase III studies will be obtained over the course of 2026 and 2027 , and if everything goes as planned, that would put us in a position to file a BLA in late 2027 and anticipate a potential approval in 2028 .
So those are the high points, and then we also wanted to emphasize that some of the aspects of conversations around vaccines did not apply to our program, based on the conversations that we had with the FDA. So no conversation around the necessity of a placebo-controlled study or an efficacy study, nor any change as it related to the size of the safety database that has conventionally been required for this class of vaccines. So a lot of really meaningful progress in collaboration with the FDA as we anticipate the initiation of phase III for VAX-31 before the end of this year.
All right, so I do wanna dig into a little bit to the phase III sort of program, but before we do that, maybe just if you could put maybe a finer point on some of those interactions with the agency, just how you get confidence that that guidance is binding to the extent it is, maybe any commentaries on, you know, the extent to which senior leadership was involved in those conversations? Or did you come out of that with, you know, solid confidence that this is the plan going forward?
Yeah, I mean, certainly we did come out of that, those interactions with solid confidence. You know, we've been engaging with the FDA over the last several years as we've had kind of parallel programs in adult and infant for VAX-24 and VAX-31. I would say that the tone, and the team, and the tenor of the conversations we've had with FDA have been consistent, both pre- and post-administration change. Several signatories attached to the correspondence, which is principally post-COVID in writing. You know, we certainly, senior folks at FDA were very involved in this. Whether the most senior folks at FDA were involved, they weren't among the signatories to the documents, which isn't to say they weren't, but we don't have direct evidence of it.
We've had the opportunity to engage directly with senior leadership at FDA in other forums, but not necessarily in these interactions. But very constructive dialogue, and look, the FDA always has the right to change its view. But given the nature of these discussions and the very consistent approach that the FDA has applied to precedent programs, and appears to be applying to competitive programs today, we feel good about where we stand. And as we've discussed, we'll share the full details of not only the non-inferiority study, which we expect to start in the fourth quarter, but the balance of the studies upon commencement of that program.
That was a nice segue to my next question, which we'll see how far I get on that one. But as we think about that phase III program, how at this point to what extent can you characterize it beyond sort of the non-inferiority study? And maybe putting it a different way, to what extent do maybe some of the preceding kind of phase III programs, like we saw from Merck, serve as a good proxy for what we should expect? Maybe that's a good way to kind of pivot off that.
Yeah, I think, I think you start off in a good place, which is, you know, Merck and Pfizer have both gotten approval in this space. They both have gotten multiple clinical studies to for their products. We know we have to have a certain minimum amount for safety. The non-inferiority study will not consume all the, those safety subjects, so we want to do a few other studies. Now, those studies are not necessarily required for approval, but as long as you have to do them for safety anyway, you might as well round out your label. So you want to do studies like concomitant use with flu, 'cause a lot of the vaccines are given at the same time as flu.
You want to look at previously vaccinated subjects because you want to say, "Hey, if you want to broaden coverage on a 13-valent," then you want it to see if the 31-valent, or a 20-valent, for that matter, if it will improve as well. So if... Look at it as more of we want to round out the label. We want to have at-risk individuals, because, you know, those that are at higher risk of this vaccine, or for this disease. You want to make sure that they actually respond well to the vaccine as well. So the studies will encompass a lot of those types of studies.
Okay. And then the follow-on point to that is, as we think about the sequencing of these reading out, should it be our expectation that the non-inferiority study will be the first one to read out, or could we get some of these other phase III's maybe in advance of that? Or... I think there were a lot of questions coming out of the update, just... And we'll get to some of them-
Yeah
... particularly on the infant side, but just, we're gonna get a lot of data.
Yeah.
How is it gonna come out?
Yeah, certainly, expect 2026 and even 2027 to be data-rich years. And I think, Carter, to your specific question, once we start the non-inferiority study and see how early enrollment goals goes, and then the timing of the start of the other studies, we'll sharpen our pencil, so to speak, as to a more narrow window. Right now, as we've said, expecting data from the non-inferiority in 2026, and from the other studies either in 2026 or 2027. In terms of exactly what the sequencing is, stay tuned. That'll come shortly, after we not only initiate it, but see how early enrollment is going in those studies.
Okay. One of the other things that came out of the update, and sort of like a line in the PR, but I definitely-
Yeah
... want to double-click on it, is sort of on the manufacturing side of things, which I think the Street, it's a little bit difficult for us to sometimes get our hands around, but it seemed you guys called it out with purpose there, and I don't know, to the extent that you can maybe give a little bit more visibility into, you know, the importance of that, and maybe just taking a step back, just, you know, sort of in terms of preparation for a potential filing down the road, kind of where the manufacturing effort is at, and maybe additional stage gates that you'll have to you know get through beyond sort of producing a phase III product. Hope that made sense.
Yeah. No, no, I followed it.
Okay.
So, to your question about the status of our CMC pursuits with the FDA, indeed, we did update on that at our quarterly update in August. You know, needless to say, pneumococcal conjugate vaccines, especially one with the sort of breadth of a 31-valent vaccine, it's a tremendously complex undertaking from a CMC perspective. So, what we wanted to make sure was clear was that we had gotten the blessing from the FDA to allow the initiation of phase III of clinical development, because this is really codifying the process of making the vaccine that will be carried through the commercialization of the vaccine.
So this was a really big moment for us, where we had been able to share the full measure of data that we had collected across the gamut of the components that go into this vaccine. So 31 different drug substances, many components that go into the construction of those conjugates, and many assays, both in process and post-production, to confirm those components are precisely what we would want them to be. So yeah, it was a really big moment for us and, you know, we've always had the view that a fulsome investment in CMC would be required to fully realize this opportunity. You know, this is the largest segment of the vaccine industry, so we, you know... There are $8 billion worth of pneumococcal vaccines sold every year.
And, so recognizing the sort of best-in-class profile that we thought we could obtain with our technology, we knew we needed to make that fulsome investment in the manufacturing in order to realize that. So we've taken a very long-term view as we built the company and built the product and, you know, this was a big step in ensuring that we did the right thing.
Okay, and I wanna maybe just stay on that for a moment. This novel platform that the agency hasn't seen before. So as you talk through those efforts there, how much of that was FDA was gonna have to do this anyway for anything moving to phase III versus, "This is novel. We haven't seen this before. We gotta make sure FDA kind of comes up the learning curve"? I hope that that is clear.
Yeah, so, so undoubtedly, there are certain things that we're doing in order to construct our conjugates that create a meaningful difference where it matters most, which is producing better immune responses across a broader array of immunogens to create broader protection when a person is immunized. Yet, in terms of the actual method of making these vaccines, there's much more the same than different. And so what's fundamental is it to ensure that you've covalently bound these two discrete immunogens, that one drives the T-cell response, and the other one directs the actual antibody response. And so the method of construction might be slightly different in terms of using a newer form of chemistry that's more efficient and allows some adjustment in terms of ratios and site of conjugation. Other than those small changes, it's much more the same than different.
So most of the release assays are the same as those have been used historically. So there's much more that the agency is able to look at that's the same that they've reviewed and measured historically than different. There are a few assays that we needed to produce in order to satisfy them, but these were identified at the very earliest stages of the program. So again, ultimately, it's more the same than different, but you need to meet those precedent standards.
Okay.
In vaccines versus drugs or others, the step from phase II to phase III is significant, and the reason is that with a drug, you can test the drug at the end, and you know exactly what's in there. With a vaccine, the process is the product, so the FDA for all vaccines, including ours, when you go into phase III, they want to see you manufacture at scale, commercial scale, and that you can do it consistently, and that you have all the analytical tools to do it, so this is a big step for all vaccines, us included. It's ... I don't think it's anything unusual. It's something that all vaccine manufacturers have to do before proceeding to a phase III.
Okay. Just still want to get to the infant part of the market in a second, but maybe just to round out sort of the adult market. Maybe you can help frame, obviously, the $8 billion number gets thrown around a lot, but as you think specifically around the adult segment, frame the attractiveness of that relative to the infant segment and differential growth rates, et cetera, and, you know, why we shouldn't be so dismissive of the adult segment-
Mm-hmm
... you know, contributing real, real dollars.
Yeah, and right now, you see about a 75%-25% split, 75% peds, 25% adult. So you still have a size, an $8 billion market, that's nothing to sneeze about. But that said, a lot of the growth is going to come from the adult market. Infants, most of the countries around the world have already recommended it, and the penetration is extremely high. So what you see in terms of increase in size is more due to, to price increases than anything else. For the adult, though, what we saw was the ACIP recommended the vaccine shift from 65 years of age down to 50, and what that means is that you now have more individuals that you can vaccinate, and we think that eventually, you know, you get a shot at 50, I don't think that's gonna carry you through your sunset years.
Right.
So I do think that they will recommend a booster, so that will double the U.S. market. Ex-U.S., what we're seeing is with these broader vaccines, like PCV 20, a lot of the countries that didn't have an adult program or were using Pneumovax 23, which is the unconjugated form, are now shifting or making recommendations for the first time. Countries like France and Germany, Switzerland, and you hear Japan is in their final stages, Australia, so you're seeing a huge increase in utilization ex-U.S. as well. We foresee the split going from 75-25 to more of maybe a 60-40 or maybe someday even a 50-50 split.
Just to summarize that, the $8 billion market today. You look at several third-party projections predicting the size of the overall market globally to grow from this $8 billion to $13 billion or so. The overwhelming driver of that growth is in the adult market for reasons Jim outlined.
Jim, maybe any early lessons from the Capvaxive we launched, and that are, you know, relevant as you guys start to do your planning?
I mean, well, let's move back. When PCV 20 went against PCV 15, what we saw was that PCV 20 ended up with very high market share. Capvaxive has broader coverage. They're making significant inroads. I think it's still early to tell, but you know, they've got already 39% market share, and they've made it in channels where customers are looking at clinical differentiation versus obviously you know, the marketing prowess that Pfizer may have. So I think that coming out with a broader coverage vaccine for us will bode well, and that we should be able to penetrate the market quickly as well.
Okay. All right, moving on to the infant setting, and you guys had some news today that the optimized dosing arm started to enroll patients. Maybe if we take a step back, frame decision to go this route, and as the rationale really to take this step.
Yeah. So as Carter pointed out, we did announce today that we have reinitiated enrollment in our ongoing phase II VAX-31 infant study, and this is a reinitiation after having introduced a higher dose, which we call the optimized dose. So you may recall that we obtained our first infant data for our VAX-24 program earlier this year in March. That data was positive, but it was a dose-finding study, where we saw that with higher doses, we get higher immune responses, which isn't shocking, but doesn't always work out that way with vaccines. And so what we saw was that we had an approvable profile with VAX-24 when compared to Prevnar 20, but there was room for improvement for a number of the serotypes, and we had already initiated a phase II study for VAX-31.
And so it created an opportunity for us to introduce an optimized dose of VAX-31 into this already ongoing study to give us the highest probability that we can have an outcome coming out of phase II that would be a dose that we would advance directly into phase III. So this decision was taken based on that data we saw in the spring, and so that optimized dose cohort has more of the serotypes dosed at the higher end of the spectrum, which is up to four point four micrograms. In fact, the majority of the serotypes are dosed at that highest dose, and the balance are at a slightly lower dose of three point three micrograms. So now we'll have a medium, a high, and an optimized dose in this dose-finding study, along with a low dose that we elected not to continue to accrue to.
Because based on the infant data we saw in the fall, when we first took our vaccine into the clinic, you know, you're doing dose finding, and the VAX-24 data showed that when we tested a significantly lower dose relative to the conventional marketed dose, it wasn't adequate, so that was not shocking, but we needed to see it, and so the study that we'll read out in the future will have these three dose cohorts, plus we'll look at that low-dose data. We accrued half of the intended subjects, so that study is now accruing. We have guided only to the latest time point for which we know we'll have all of the data from that study.
What we've said is, we will have the primary series data and the boost data by the middle of 2027, but we carefully worded today's press release to acknowledge that we could look at the data sequentially. These are co-primary endpoints, and we have an opportunity to look at the primary series data earlier than that by the middle of 2027. We're waiting to more specifically guide to that until we get more of the accrual under our belt and look at the timing. But certainly, it would be in the six months earlier, plus or minus, than that later time point, and we will work out the unblinding strategy and get more specific about our guidance at a future date.
All right, so come back to the disclosure in a minute. The-
Oh, sorry.
Probably-
I got carried away.
It's okay.
Yeah.
On this whole page, the one question I think I really wanted to ask you was, so should we think about this optimized dosing arm as establishing an upper limit, or I guess, evaluating a bound condition, or as a genuine attempt to potentially define a phase III dose?
We should think about it as the latter. There have been higher doses tested by other sponsors, so there's nothing that would ultimately prevent us from pushing to an even higher dose. There really has not been any dose-limiting-
Right
... adverse events identified using pneumococcal conjugate vaccines. These are decidedly immunogenic constructs, and yet there is not a demonstrable AE profile that emerges as you administer more of them or adjust the doses up slightly. It's not to suggest it's precisely the same, but it's very, very minor and modest. So I do think we could ultimately imagine a scenario where we would have higher doses, but based on the data we generated in that VAX-24 study and the dose responsiveness we've seen, we don't think we'll need to push beyond that higher dose.
Okay. Come back to the disclosures now. I think historically, we've seen companies release the primary data, so it begs the question around, you know, why that language, and as I think about that, it's all in the context of you guys are gonna have a lot of data coming out at the same time, and maybe that's the prism you looked at it through. Am I barking up the right tree? Are there other nuances here I'm just missing, or are you just giving yourself flexibility?
Yeah. No, look, I certainly think that's a key consideration. And as Grant alluded to earlier, we have not yet finalized the unblinding plan for this infant study. It's the unblinding plan that's gonna dictate the disclosure plan. But the factors at play are, you know, we've just resumed enrollment in the study. We want to see how enrollment goes to understand, regardless of what the unblinding and disclosure strategy is, when those time frames would fall for primary series and booster. And then we have the adult programs, the non-inferiority study starting as expected in the fourth quarter of this year, with other studies starting around then as well. So we'll have an infant program going on.
Once we get a sense of when these adult phase III studies start and how early enrollment looks, the data, the serology data from all the studies go to one vendor to be processed, so you have the rates of enrollment for several studies, how those overlap in terms of ability to do the serology work, which will influence the timing of the readouts from all of them, so getting a sense, I do think by the early part of next year, we'll be in a position to sharpen our pencils on the disclosure plan, on unblinding plan for the infant study, and the expected readouts for the collective studies, infant and the adult in the phase III as well.
Sounds like you're teeing up a really exciting VAX-24 2026 discussion this time next year. Okay, so maybe then in terms of defining that optimized dose arm, you guys have used the term majority of the serotypes of value in the higher dose. Are we going to find out about that prior to the actual readout, or are we going to sort of probably-
I, I-
Just continue to guess between now and then?
I don't expect that we will get more granular than that.
Okay.
You know, this is a highly competitive area, and we've been more forthcoming than most about the study designs that we have been executing. So I think that's enough for people to go on. And the thing that I have emphasized is that if you go back and look at the VAX-24 data, you can certainly identify serotypes for which there was room for improvement. And for any of those for which there was any suggestion of room for improvement, you can imagine that we have erred on the side of using a higher dose.
Okay, that's a great segue. My next question is, you guys are still on the hook to share the final data from VAX-24 in infants.
Mm.
Should we expect that before year-end? And what else is there to learn, given that we saw interim data in a meaningful number of patients?
Yeah. So, most definitely, we are still expecting to deliver and announce the final results of the VAX-24 infant study. And just to rewind the tape, the data that we put out in the spring was not entirely complete.
Right.
And so the OPA, so the functional antibody responses at that primary series endpoint, was only interim, and then at the post-dose-four co-primary endpoint, we only had two-thirds of the IgG data, which is the other co-primary endpoint, and we had none of the OPA data. And so, you know, that's a 50% increase in the number of events that we will have incorporated into the final results that we'll have before the end of the year. And I guess what I would say is, we wouldn't expect the point estimates of the comparisons to change materially, but the endpoint is defined based on the lower limit-
Yeah
... of the confidence interval exceeding a particular level. And anytime you add more events, the confidence intervals tighten up, and at that post-dose 4 outcome, we did have five misses. And, you know, we could see less misses in light of those confidence intervals tightening up, so it could improve, certainly, the outcome that we have in hand at this moment.
Right. Would that meaningfully change anything from your strategy? It seems like you guys are kind of-
I would say that we look at that data that we got from the spring, and if you show that data to any objective vaccine developer, they say, "Oh, this is an approvable-
Right
... sort of profile. This is eminently approvable based on all of the historical precedents that have gone before, which also had a number of misses," and this all works out in the context of a few misses that are modest in relation for adding coverage, that's a good trade. And so the number of misses we had were manageable, but the headline value of the misses, I think, created angst, angst amongst investors. And so to the extent the headline value improves with fewer misses, I think people would be more reassured.
Okay. In just the final moments here, one thing we haven't talked too much about is sort of opportunities outside the United States. As we think about the phase III in adults, could we see region-specific studies to potentially give yourself some optionality as you think about how to commercialize? And any other kind of broader comments you want to make on, you know, maximizing the opportunity outside the United States.
You have a direct comment?
You did hear earlier, the winds are changing-
Right
... ex-U.S. for the adult market, so I don't think we should ignore that. That segment is going to be quite substantial going forward. So plans are to have regulatory discussions with other key regulatory entities for countries that we think will have a substantial adult market. Based on that feedback, you know, if they want local studies, we'll do local studies. Nothing to the level that we are with the current body of phase III, but enough to get approval in those countries, as well as to allow the recommending bodies to consider us for a local recommendation.
I would just in terms of setting expectations, I would say sort of the key studies for which we've issued guidance for VAX-31 are going to be U.S.-based studies. I think those European opportunities come down the road. And of course, as we contemplate a future infant phase III, we would definitely, given that that is truly a global market, already and a sizable one, we would be conducting studies both in the U.S. and other countries around the world.
Okay, last 30 seconds, Andrew, so you're on the clock here. As we think about sort of cash runway, and particularly after some of the changes you made, maybe just put a final point on that.
Sure. Yeah, look, we're fortunate to be in the position of a very strong balance sheet, $2.8 billion as of June 30. Kind of notwithstanding that balance sheet in the context of the macro environment, we did take the opportunity over the last several months to kind of look across the business and see if we had opportunities to further extend our runway. And, you know, there were some trade-off decisions involved in that. You know, the first principles in that exercise were to continue to preserve the opportunity for our PCV franchise. So the impact was elsewhere, including on our decision to defer advancement into the clinic of some of our pipeline programs.
But that exercise, in total, allowed us to extend our runway about six to nine months, putting us in the position to fund our current operating plan until the middle of 2028, which would put us on the cusp of the potential approval of VAX-31 in adults, as Grant referenced earlier.
All right. Great. Well, exciting next 18- 24 months, so thank you, guys, and best of luck.
Yeah. Thank you.
Thanks for your time.