Hi. Good afternoon, everyone. My name is Tara Bancroft. I'm one of the senior biotech analysts at TD Cowen. I wanna thank you all for coming to TD Cowen's 46th Annual Healthcare Conference. For our next session, we have a fireside chat with Vaxcyte, and I'm happy to introduce Grant Pickering, Vaxcyte's Co-Founder and CEO, Andrew Guggenhime, the President and CFO, and Jim Wassil, the EVP and COO. It's a privilege to have you all. Thank you so much for joining me. I wanna say to everyone in the audience, please do raise your hand if you have a question. I will make sure that you get heard. I guess to start off, maybe Grant, you can provide high-level overview, recent highlights, anything you'd like to say to start us out.
Yeah. Well, first of all, thank you for having us, Tara. It's wonderful to be here in snowy Boston. Yeah, as it relates to Vaxcyte, we have a really exciting year ahead for us. We are in phase 3 clinical development with our lead vaccine, VAX-31. We have 3 ongoing clinical studies that will comprise the BLA filing that we're anticipating by the end of next year. We have our lead study, which is called OPUS-1. It's a pivotal study where we're comparing VAX-31 to today's standard of care vaccines, the 20-valent and the 21-valent vaccine. That clinical study got started late last year and will actually read out in the 4th quarter of this year. That's a big milestone for us to look forward to.
We have two other ongoing studies that will read out in the first half of next year, and we'll cap the BLA with the manufacturing consistency study. These are the three big studies that are underway. In addition, we have an ongoing infant study for VAX-31 that will read out the first half of next year. For us, it's really getting into that and through that last stage of clinical development for VAX-31. For us, the pneumococcal conjugate vaccine franchise has really been what we've been known for. But we're also really excited, we announced this last week, that we're entering the clinic with another important conjugate vaccine, where we'll be looking to prevent Group A Strep derived disease. It's an exciting moment for the company on both ends of the spectrum.
I agree. Okay. Well, I think we should just dive right into it. Before we talk about PCV, the phase 3 trials ongoing, upcoming, I thought it would be really helpful to level set talking about the technology a little bit. You know, there's a lot going on in the PCV space and this race for more and better valency. Maybe you could just go over the core tenets of the technology that allow you guys to achieve a valency that nobody else can, and maybe your expectations for your best in class or higher valency in class that you think protects you against future competition.
Maybe you and I can tag team this one. Do you wanna start out?
Sure. Well, I mean, in terms of our technology that allows us to go better, I, we'd have to look at some of the other predecessors. It's really an innovation to take a polysaccharide and conjugate it to a protein carrier. The issue with their technology is you can't control the site at which it conjugates to the protein, and you can't control the amount of polysaccharide that you conjugate to the protein. Two things could be happening, but what we've seen is that as PCVs have gone from lower valency to higher valency, consistently, there's been a drop in immunogenicity each time they've added additional serotype. It could be the amount of or protein carrier, but it actually, I think, is more importantly the fact that when you conjugate randomly, you cover up the T cell epitope.
You don't get that polysaccharide going to the T cell. You don't get a great response, and you factor that in because it probably inhibits some of the naive B cells from progressing to what you want, which is the polysaccharide. Our technology, on the other hand, allows us to site-specifically conjugate our polysaccharide onto that protein carrier. It also allows us to control the amounts. With both of those, we feel we can push the limits and boundaries, and we've seen that with the adult 31. Even in the infant study, we've seen an improvement in immunogenicity, where we didn't see as much carrier suppression as we added more and more polysaccharide. What that means is we can push the dose, we can improve the immune response, and subsequently, we can expand coverage.
Yeah. Well said. I would just cap on to that indeed, we're using the same immunogens that others have used, but we've figured out a way to put them together more nimbly, and we're now at a point where we can get 31 to work together, whereas with the historical technology, they've acknowledged they really can't get past 20 or 21 conjugates. They've not stopped trying, but for them, they're trying now more and more exotic means to try to expand beyond 20 or 21. We feel like we're in a really good position out front with tried and true technology to a certain extent, that sets us up well.
Great. Yeah. It's very, very exciting technology. I love it. I guess now we can get into. Let's start with the phase 3 adult program. You have the OPUS-1 data coming this year. Can you walk us through the components of the data that you're gonna be presenting this year and how you guys would interpret success?
Yeah. We, you know, had our earnings update last week, and we kinda laid out how we think about the opportunity. We, you know, we have a vaccine that has... You know, we're comparing ourselves to both the 20-valent and the 21-valent, so it's not hard to do the math. We have either 10 or 11 more conjugates in our vaccine, which will confer a substantial improvement from a coverage perspective. When we're looking to compare and contrast the vaccines, obviously we have this high confidence that all of those incremental serotypes will look good from an immunogenicity perspective. Then where we overlap, the way that our team was able to construct the clinical study, is there are 10 of the serotypes that are in all three vaccines.
We have that set up such that given that they're both standard of care vaccines, we can show a non-inferior immune response against either of the two in order to meet the definition of success in the study. Then for the incremental serotypes that are in one or the other, we'll do a head-to-head comparison there. For us, when we know we already have 10 or 11 more serotypes than the competition, we feel like even if we were to miss on a handful of these non-inferiority comparisons in relation to the totality of the vaccine in the context of VAX-31, it gives us real confidence that we'd be in a position to look to a BLA and a best-in-class profile with a vaccine like that. Yeah, that's kinda how we're setting expectations. Did I miss anything, Jim?
I'm good.
No. Okay.
Okay. Well, we'll dive into that a little bit more. I guess, can you start by telling us? The move from phase two to phase three, there's a tighter non-inferiority margin. Maybe explain a little bit more about why that is. With that margin as it is, which of the serotypes do you think are more likely or not to hit?
Yeah. The phenomena that has been a consistent aspect of expanding coverage, because what happens with this class of vaccines is when you begin to broadly vaccinate with a particular set of serotypes included, those serotypes are largely taken out of circulation. It's not always the case, but that's usually the norm. That requires you to continue to keep the pressure on those while trying to add coverage with these newer circulating serotypes. The trade-off to achieve that has been lower and lower immune responses across the board. We've been able to show that we can actually not only increase coverage, but actually improve immune responses. We did agree to use a higher threshold for the definition of non-inferiority because we felt like our data, you know, was clearly showing that we could do that.
That hasn't been the case with the other programs. Frankly, the FDA was getting increasingly concerned that with lower and lower immune responses, it wasn't entirely clear how low those responses could go before we'd start seeing breakthrough disease and less prevention than we're all seeking. For us, we were willing to adjust that threshold upward based on the strength of the phase 2 data, and that was frankly what was most unprecedented about the phase 2 data when we obtained that in late 2024, was that we were not only adding more coverage with more serotypes, but also actually showing improved immune responses in comparison to the 20-valent comparator. For us, we felt like that was a reasonable trade to make. It's the right direction to head for this class of vaccines.
You know, I do think it will be a tougher hill to climb for others, who will try to come behind us.
Maybe Jim, you could talk about serotypes that may be more likely or not to hit or miss.
Sure. In our Phase II versus PCV20, even at a 0.67 threshold, we would have made all 20. From that perspective, you know, we're doing 2 comparisons. PCV20, you know, we're fairly confident 'cause we've had a head-to-head, and we've had success. With CAPVAXIVE, we haven't tested in the same study as CAPVAXIVE. I'll caveat this by saying there's more uncertainty with somebody that hadn't been tested in our study with our assay. That said, when you look at the ones that are in PCV20, PCV21, and in our vaccine, we did a comparison because they did a comparison to PCV20. We did a comparison, so the GMRs could be compared. When we look at it, you know, we're looking really, really, really good shape.
There are two serotypes, 1 that might make it, but I'd say more probably will make it than miss, but there's still a chance of that serotype 8, and the other is serotype 3. In serotype 3, we will be most likely higher than PCV20, but we may miss on the 0.67 for the CAPVAXIVE.
I would just add, as Grant said, you know, we said this last week on our call, no prior PCV has achieved perfection in terms of performance on non-inferiority. We are not expecting perfection, believe we can miss on a handful of serotypes. We also have acknowledgment in our written correspondence with the FDA, the acceptability of missing on a few serotypes in the context of the totality of the data of the vaccine, which is an important part of the consideration and has been to date in the development of PCVs.
I wanna come back to that thought, but more on serotypes first.
When you think about serotype 3 as a very prevalent, highly circulating, you know, how can we think about which ones are really important to hit on? Not only just from a societal perspective for disease protection, but from a regulatory perspective too. Are there, are there other serotypes that the FDA and ACIP cares more about? We, we kinda know that from the CAPVAXIVE discussions, but maybe just some more context there. You know, 'cause I do think the street is taking some adjusting to potentially missing on serotype 3.
Yeah. I mean, the epidemiology of this class is really robust, right? We have really good surveillance here in the U.S. and in throughout Europe. Each of the serotypes have their own circulation rates. Serotype 3 is the one outlier. It actually is the highest circulating serotype, but it's been in the vaccines that we've used broadly now for 15 years. What's going on there? Unfortunately, none of the vaccines for which clinical data has been, you know, produced reach a magnitude of antibody responses that are adequate to prevent not only the circulation, but the causation of disease associated with serotype 3. It just happens to be a low-responding serotype that also happens to shed its outer coat.
Even when you get functional antibodies that bind to the outer coat of the bacteria, oftentimes that outer coat is no longer a part of the actual bacterium. Even those vaccines that have shown higher relative antibody responses are still well below the protective threshold, and so it has not turned into a meaningful differentiation because it's not thought to have any meaningful clinical differentiation. That's the just the unfortunate state of where the industry is as it relates to serotype 3. Thereafter, there is a more predictable set of outcomes because the magnitude of immune responses are much, much higher in the order of magnitude of 10 times the antibody titers relative to serotype 3. Thereafter, the pneumococcal conjugate vaccine class has had a very strong track record of maintaining control over serotypes.
It really just comes down to how many serotypes are thought to be effective at a protective threshold that your vaccine has relative to the comparator vaccines. You know, today it's a 20 versus a 21, but they're not the same 20 plus 1, right? You have one that covers the historical serotypes up to 20, and then CAPVAXIVE shifted the goalposts, took out 10 of the historically circulating strains in place of serotypes that were circulating more recently, which was a great strategy. We're fortunate enough to have the technology that allows us to not make that sacrifice. When you have all the originally circulating strains and the newer circulating strains and then some, you know, it's the totality of that coverage, and it really doesn't come down to 1 serotype versus another.
It's just the complete package of your vaccine versus the alternatives.
Got it. Yeah. That's an I mean, it's an absolute comparison too. Maybe you could give us some context as well about what it means to miss non-inferiority on any particular serotype. I mean, 'cause we don't want to get to a radical level of thinking, right? Where missing on non-inferiority means no disease protection, right? Maybe you could help us understand that nuance, and, you know, if so. Like, say you miss on serotype 3, what would we have to see to believe that you could still protect against serotype 3? Is there, like, a threshold of titer that we'd want to see?
Do you want to take that?
Sure. Unlike infants, where there is a clear correlate of protection, in adults, there really isn't. If you miss, the straight answer is we don't know what the implications are in a clinical perspective. However, Grant sort of alluded to this, some serotypes have very, very robust responses, others not so much. Serotype 3 is one of the ones that's not as robust. If you have one that's really, really high and you miss on the non-inferiority, the belief is that you're still well above a lot of these other serotypes that have demonstrated protection, so you're still protective as well. You can look at what some of the others do. It's really, really difficult to quantify it. I think with serotype 3, what we see is unlike.
I say for a lot of the other serotypes, you're like between 80%-90% efficacy against invasive disease. serotype 3 is more like 40%-50% or as is, the belief is that you need a three to four-fold improvement in immunogenicity to see substantial improvements in clinical outcomes. I think we're getting what we can from serotype 3 at the levels that we're at. For the others, you just say, "Hey, they're very robust." The FDA does look at this. They call it totality of data, which is, yeah, is it circulating or not? What's the magnitude of the response, and what's the degree that you missed? They'll look at all of those and decide whether or not it's okay to move forward.
Okay. Great. Thanks. All right. I want to move into a slightly different topic. Trigger warning, but it's political risk. You know, you're talking about missing a few serotypes or a handful of serotypes. Can you maybe tell us more about how you guys are thinking about predicting over the next few years as you guys approach approval, how that conversation might evolve? I know the FDA is going for more scrutiny, like higher bars. How is your thinking evolving there?
Yeah, I would say, you know, we've been hesitant to try to predict how things are gonna unfold. It's been a volatile environment. We've been focusing on controlling what we can. You know, as it relates to our own programs, we had a constructive dialogue with the FDA over the course of 2025 and into the early part of 2026 as we aligned on the design of each of the phase 3 trials that comprise our VAX-31 adult program, and the specifics of which Grant and Jim have spoken to. We know our protocol underwent supervisory review with the FDA, above the head of the vaccines division and to the highest level.
We feel good about the input we've received from the FDA and the construct of the trial and our ability based on the parameters to, you know, quite optimistic about our ability to deliver on that. In parallel with the day-to-day efforts in engaging with the FDA, we've over the last 15 to 18 months, at a public and government affairs level, we've undertaken to build relationships with some of the key decision maker and key individuals, whether the executive branch, members of Congress as well, to continue to advocate for public health, for vaccines in general, and for Vaxcyte.
We feel there's, you know, continues to be broad bipartisan support there, particularly as it relates to pneumococcal conjugate vaccines. It continue to be viewed as one of the bedrock immunization programs. The disease is a clear and present danger. It's important to continue to vaccinate against that. We saw that reaffirmed as recently as earlier this year, in which, you know, the streamlined childhood immunization schedule preserved PCVs as among those recommended vaccines and continuing to recommend the three plus one dosing schedule as has been the case historically in the U.S.
Tara, we're hesitant to predict how things are gonna unfold but, you know, the context of our engagement with FDA, the design of our trials, the data we've seen today, we think ultimately the data will carry the day, and we're, you know, confident in the quality of the data we'll be in a position to present when the time comes, first with the regulators in connection with approval of the product, and then ultimately the recommending bodies, which in the United States is ACIP and some of the other bodies that are influential as it relates to recommendations.
Since you mention it, how are you guys thinking about an ACIP recommendation? Specifically, is a preferred recommendation on the table at all, do you think?
Yeah. I mean, the ideal outcome would be a preferred recommendation, of course, because that would be basically a find and replace. That's what we saw with Shingrix. I think we certainly have the makings of a vaccine that would warrant a preferred recommendation. I mean, for that matter, when CAPVAXIVE was approved by the FDA and was heading to the ACIP, I think Merck had the expectation that they would get a preferred recommendation. You know, not having those historically circulating strains, a couple of which have been continuing to circulate, was enough for the ACIP to take a different stance and make a joint recommendation. I think for us, the working assumption would be a recommendation alongside the other vaccines.
I think what we've seen time and time again is that the vaccine with the broadest coverage is the one that gets the lion's share of the market. I think we would be set up for that. In fact, I think over time, we might end up in a similar place as a preferred recommendation might put us, but if we were to obtain one, obviously we'd get there faster. I think we're just gonna have to wait and see how things play out. I think we'll wanna try to be a bit more conservative, heading into that situation, and we have some time yet ahead of us to see how things evolve.
Okay. Great. Maybe now we can talk about OPUS-2 and OPUS-3, which are super interesting, maybe potentially more incremental phase 3s, but what they are, when do we get data, and what could those readouts look like?
You want to take that?
Sure. OPUS-1 is our pivotal non-inferiority, which we talked about. OPUS-2 and OPUS-3 help us to deliver a robust label. OPUS-2 is looking at our vaccine with and without concomitant flu vaccination to see if those two can be given together. We fully expect they will and have that, you know, obviously something that would allow, especially in the pharmacy where during flu season, you wanna have the capability of giving both vaccines at the same time. OPUS-3, this is where we're looking at revaccinating those who have previously gotten a pneumococcal vaccine. When you look at PCV20 and PCV21, they both have recommendations currently that if it's been 5 years and you got 13, 15, or 23, that you should get either PCV20 or PCV21.
What that did was open up essentially everyone over the age of 50 after 5 years to getting a vaccine or getting revaccinated. If you look at the difference between PCV 15 and 20, it's only about a 15% incremental coverage. Between 20 and us, it's about 40-45%, so you're talking about much larger breadth of coverage. We're hoping to look at our vaccine post PCV 20, post PCV 21, and 13, 15, and 23, and see if we can get recommending bodies or the healthcare providers to be willing to give our vaccine as a way of broadening coverage and ensuring the optimal protection.
Great. Maybe now, we could talk about how the adult versus infant market has evolved over time. I feel like I'd like to ask you guys this question like once a year is what now is the split? Because it used to highly favor infants, and that's been evolving to be more split, and I'm wondering now where it is.
Yeah. It's been really fascinating to see this evolve. Yeah, historically and initially, these vaccines were only developed for children, and then in the last 15 years we identified the value of vaccinating adults. What had played out until recently was the entire world has adopted pneumococcal conjugate vaccines for newborns. Adults were really only being vaccinated routinely in the United States. That has changed significantly just over the last year or 2, and in large part that was driven by the broader and broader spectrum vaccines coming out, and so they were conferring meaningful incremental protection to what herd effect came from vaccinating children and from those less prevalent vaccines that were available in children.
It's just been within the last year or so that we're starting to see that manifest itself in terms of meaningful revenues. This is an $8.5 billion class. Probably 80%-90% of that had been in infants. Every birth cohort, right, is getting vaccinated on an annual basis. What's happened is not only has there been meaningful growth in the U.S., but also ex-U.S. for adults. When we were vaccinating adults in the U.S., we were starting when they turned age 65 and up, and just a little over a year ago, we reduced that age for universal vaccination down to age 50, and that added an incremental 60 million U.S. adults to the pool who were eligible and recommended for vaccination. That started to play out in terms of the utilization.
I would say even more impactfully in the long run is we've now seen most of the developed countries in Europe and in Asia beginning to make these universal recommendations for adults. What we're seeing now as this is all starting to come online, is a moment where just as the last year's earnings have come out, you had a situation where the Prevnar franchise grew not only in the US, but also internationally, 8% domestic, 18% up internationally, in the face of newfound competition with CAPVAXIVE, which sold over $745 million last year, and the balance of Merck's portfolio also growing. You clearly have a situation where you're just not having two companies duke it out for a discrete cohort.
You're seeing a market that is expanding throughout the world for all the right reasons. We're gonna prevent a lot of disease and save a lot of burden for the healthcare system.
Great. Was debating on the last 2 minutes what to spend it on, either your new chief commercial officer and his priorities or infants. I'm thinking I'm gonna go for infants.
Maybe let's just talk about what you've learned from the VAX-24 phase 2 infant data that informed VAX-31 and your expectations for it and how many misses. Like, where should we set the bar for this after everything we've learned from VAX-24?
I mean, I think what we learned from the VAX-24 clinical data that read out last year was that we have a vaccine. We have an opportunity and an ability to go beyond today's standard of care, which is currently the 20-valent that's been out for some time. The question is: How far can we push that? We have our 31-valent data coming out next year. The key learnings from our first infant data was that when we have our conjugates, and we test them at lower doses where we have even substantially lower doses of one of the components, and that's the carrier protein which drives the T-cell mediated immune response, we tested lower doses than we should have.
I mean, we, you know, did the best we could, with the data that we had at hand, but what we saw was a really nice dose response. We have higher doses being tested in the context of VAX-31, and that's on top of the data that we got already.
... we showed the incremental serotypes looked great. We showed on the overlapping serotypes with today's standard of care better immune responses, we weren't perfect. We had certain serotypes where we missed, they were not serotypes that were of, you know, critical importance 'cause they hadn't been circulating for quite some time. When you think about having a, you know, a 31-valent program read out, you know, we have great confidence the incremental 11 will look good. We have the expectation we'll see continuity on those important serotypes that continue to circulate. The question is really down to for those serotypes where we missed, for which there was not meaningful circulating disease, with these higher doses, we think we have an opportunity to improve those immune responses. I would say even without much improvement, we have a best-in-class vaccine on our hands.
We'll find out for sure first half next year, but that will be a really important part of our story as it unfolds. We didn't get a chance to talk about our new Chief Commercial Officer, but we're thrilled to have Mike on board, a vaccine veteran, from Sanofi days and his Moderna days, who is laying the groundwork for what we hope will be a very successful launch of VAX-31 in adults initially.
Okay. Great. I know maybe we could take an extra 30 seconds, if we may, 'cause I'm just having too much fun. Okay. I always like to end these with asking you: What do you think is the most underappreciated aspect of Vaxcyte, and why is it strep?
Jordan.
Are you talking about Group A Strep-
Oh.
or Strep pneumoniae?
Very good point.
Yeah. No, I think, you know, I talk a lot, and I'm a real big fan of our next target Group A Strep. I think it has huge opportunity in both infants and adults. The rates of invasive disease in adults have more than doubled in the last decade. The strains that have emerged post-COVID, especially in Europe right now, but it'll eventually make it to the US, are much more virulent. You're seeing scarlet fever. Obviously there's the antibiotic-resistant component. I think we can have a huge public health impact with Group A Strep as well.
I agree. Well, thank you so much, all of you for being here. Thanks everyone for listening.
Thank you.
Thanks.
Thank you, Tara.