Good afternoon, everyone. Thank you for joining the 25th Annual Needham Healthcare Conference. My name is Joey Stringer, and I'm one of the biotech analysts at Needham & Company. It's my pleasure to introduce our next company, Vaxcyte. Joining us today from the company is CFO Andrew Guggenhime and Chief Operating Officer Jim Wassil. For those of you joining on the webcast, if you would like to ask a question, please do so at any time. You can submit a question using the chat box at the bottom of your screen. With that, we'll get started. Andrew and Jim, thank you so much for joining us today.
Right. Thanks, Joey, and thanks to the Needham team. Pleased to be here today.
Great. Well, the next year certainly looks like it's going to be a transformational period for Vaxcyte. Before we get into the details of the pipeline, what are the company's top priorities, and can you briefly touch on the key milestones and catalysts?
Sure. Yeah, I'm happy to take that. Yeah, certainly the next 12- 15 months are going to be a really exciting time for Vaxcyte. Our top priorities are to deliver the data for the various OPUS studies that comprise the VAX-31 adult Phase III program. We have completed enrollment in the OPUS 1 and 2 studies and are still enrolling in the OPUS 3 study. And from a readout standpoint, continue to expect to deliver the data from the pivotal non-inferiority OPUS 1 study in the fourth quarter of this year, and then the data from the OPUS 2 and OPUS 3 supportive studies in the first half of next year. So really excited as we look to the data events for each of those studies.
As we prepare for a future BLA submission and a potential launch in this adult market, we continue to invest to ensure we are able to deliver from a manufacturing standpoint to meet the demands and supply this large market opportunity. As we transition from the adult indication to our infant franchise, we have a VAX-31 infant phase II study, which is ongoing. We completed enrollment in that study in January of this year, and we continue to dose the subjects in that study, which is a multi-dose study, in the infant population, and expect the full data set from that study to read out by no later than the end of the first half of next year. We're still finalizing what the ultimate unblinding and disclosure strategy is.
In any scenario, we would expect to have the data from the primary immunization series as well as the booster data, as I said, by the end of the first half of next year, and hope to be in a position to deliver data there that enables us to engage with the FDA and then advance into phase III. Rounding out the clinical milestones, we announced earlier this year that we plan to initiate a phase I study for our most advanced non-PCV program, which is VAX-A1, to prevent group A strep. We are planning to initiate a phase I study for that program also in 2026, and really excited to be able to resume advancement of the pipeline, which is headlined by that program.
The last thing I would say, Joey, and I'll turn it back over to you is, in support of the clinical and manufacturing efforts, we are investing to be prepared from a commercialization standpoint. We hired our first Chief Commercial Officer in the fall of last year, building our medical affairs presence, and then on the other side of what we hope and expect will be positive data from the OPUS studies, make the more substantial investment to prepare for future launch of that vaccine in the adult indication.
Yeah, that's great overview, Andrew. Really, the stock has performed well year-to-date, even dating back to last September. Can you touch on some of the factors that you think have contributed to this?
Well, I think it's a recognition of the opportunity, a combination of the size of this market, the very clear adoption criteria of this market, and the profiles that each of our adult and infant programs have to represent potential best-in-class vaccines in a market that is $8 billion and continues to grow. Obviously, there were several factors last year that led to the dynamic and the stock price. I think as we continue to execute on our programs, aligning with the FDA on the design of our OPUS phase III program, initiating those studies, completing enrollment in two of them, and I think continued appreciation for the infant data set.
I think all those factors, both execution, data appreciation, getting more proximal to the readouts, and I think a backdrop that people see as increasingly productive has led to recognition and the appreciation of the share price over that period.
You mentioned the pneumococcal vaccine market size, currently around $8 billion. What are the key factors that are driving this or could drive this market growth over time, and how big could this market become?
Yeah, as I said, about $8 billion today. That's comprised of about $2 and a half billion for the adult indication and the balance in infants. A number of reports suggest and forecast growth in this market from the $8 billion-$12 billion or so over the next 5+ years. That growth is principally a function of expected growth in the adult market. These vaccines, the infant market is substantial. It's an annuity business. At some level, these vaccines are administered to just about every baby born in the world, both developed and developing. Growth in the infant market is really a function of price and just changes in the birth cohort, whereas, as I said, the expected growth is driven by several factors in the adult market.
First, here in the U.S., which continues to represent the significant majority of the market, the ACIP recently lowered the recommendation for universal vaccination from age 65 to age 50. That opens up about 60 million-65 million Americans today who become immediately eligible for pneumococcal vaccine. That's certainly a significant growth driver. There is the expectation in the long term that this market is going to convert from what is a one-dose market today to a two-dose market, where adults, if they're vaccinated at an earlier age, as we all immunosenesce, would need to get boosted at a later age. You of course have more Americans who turn age 50 every year than do 65, so that just increases the incoming cohort.
We'll talk about it perhaps later, but we think there are opportunities with respect to our VAX-31 program, and the primary objective of our OPUS 3 study is to exploit an opportunity to revaccinate subjects who've been previously vaccinated with a less prevalent vaccine. Those are all the dynamics in the U.S. market. Outside the U.S., you've seen over the last couple of years, for the first time, a number of countries make recommendations to immunize their adults. Most recently, you've seen that in Japan, but several countries in Europe. You're now building, you're seeing a growth in the adult market. Pfizer has reported high-teens growth year-over-year, principally as a function in the ex-U.S. market in the adult franchise.
That's another opportunity for us as we move forward to take advantage of continued growth, expected growth in the ex-U.S. adult market.
Andrew, you mentioned the OPUS trials transitioning to VAX-31 in your phase III adult program, OPUS 1, 2, 3. Can you describe the rationale and the goal of each of those phase III trials and their importance as it relates to a potential BLA filing?
Yep. I'll turn that over to Jim.
Sure. In order to get licensure, the bare minimum that you traditionally need is at least 3,000 subjects exposed for safety with your phase III commercialized formulation. The other is that you need to demonstrate your pivotal study, either efficacy or in this case, non-inferiority for immunogenicity to a licensed comparator. For us, it's the latter. The last thing you have to do is you have to demonstrate manufacturing consistency. Vaccines are a little bit different than pharma. Regulators look at it. You can look at a pill and say exactly what's in there with your analytical testing. With a vaccine, it's more like your process is your product, so they want to see that you can reproducibly manufacture and maintain the immunogenicity that's necessary when you're doing it at commercial scale for a long period of time.
When we go back to OPUS 1, 2, and 3, OPUS 1 doesn't get us all the way to the 3,000 exposed, but it is our pivotal non-inferiority, so it checks that box and it contributes to the safety. OPUS 2 and OPUS 3 help us get over the hump for the amount of safety subjects exposed. For OPUS 2, it's more of a commercial focus, which is a lot of the pneumococcal vaccines are given during flu season in the pharmacy. You want to make sure that you can give both our VAX-31 together concomitantly with flu, and so you want to show that that can be done without substantial interference. That's the objective of OPUS 2, to demonstrate the compatibility of us with flu vaccines.
And the third, OPUS 3, as we referred to, right now, there's a recommendation by the ACIP that says PCV20 and 21 should be given to anyone who's gotten 13, 15, or Pneumovax, and it's been at least five years. Well, the incremental difference between 15 and PCV20 is not that much. In fact, ours is more than double in terms of the improved coverage. So we'd like to show and see if we can get a recommendation minimally with this data for revaccination of those who previously got 13, 15, and Pneumovax, but perhaps 20 and even 21. That would open the door to essentially the entire population after five years needing to get revaccinated with VAX31. The last study that we need to do, I mentioned manufacturing consistency, that will come later.
We're not calling it one of the OPUS studies at this point, but we will do that prior to submission of the BLA as well.
Now for OPUS 1, the pivotal trial, given that that trial has two comparator vaccines with some overlapping serotypes, can you remind us how the primary endpoint analysis will be conducted?
Sure. The goal is to demonstrate non-inferiority for the serotypes that are contained in either one or both of the comparator vaccines, that's PCV20 or 21. We have 28 serotypes that are in common with both. For 11 of those, they're in common with both our vaccine, PCV20 and 21. Now, for those, the way that our protocol is written is that we need to demonstrate non-inferiority to either PCV20 or 21. As you recall in the phase II.
Yeah
We ran the table on PCV20.
Yeah.
If we can replicate those results in phase III, we should be fine on those 11. For the incremental nine in PCV20, it's just us versus PCV20. Again, we saw what our results were in phase II. There's eight, though, that are in our vaccine in 21. We'll be doing that comparison as well. We feel comfortable with those comparisons based upon looking at CAPVAXIVE studies in phase III and our phase II study. They are different studies, different populations, different assays. There's less confidence than we have with the head-to-head study that we ran in phase II.
In terms of the trial powering and powering on individual serotypes, can you disclose anything on that?
Well, I think we just published recently in Lancet ID the VAX-31 phase II study, including a lot of information from the supplement. You could probably run some of the powering on those. It's very highly powered.
Got it.
For those. You can just look at the results. 18 out of 20 were higher than PCV20 in the phase II numerically. Seven were statistically higher. You can imagine that those are very well powered, let's just say.
Got it.
For CAPVAXIVE, they're two different studies. We've done some analysis, but I'd be afraid to give an exact number because there's some ambiguity there.
Understood. Just maybe as a reminder, what was the rationale for raising the dose to the 4.4 microgram from 3.3 micrograms on serotypes one, five, and 22F in OPUS 1?
Yeah. When we looked at our phase II, we looked at which serotypes were relatively lower in that study compared to PCV20. Now, they were still well above the threshold to meet non-inferiority, but we felt that we could boost those a little bit. At the time, we were still worried that there could be some carrier suppression. We haven't seen as much carrier suppression with our technology as other vaccines have done, but we wanted to limit the numbers that we boosted to 4.4 micrograms because we were afraid that there might be some diminution in the other responses. We did a targeted approach. The ones that were the lowest responders, we tried to boost a little bit.
Got it. In terms of the data readout for VAX-31, the OPUS 1 trial, how do you plan to present or what data do you plan to present in the top-line announcement? Should we be expecting something similar to what you've done in the past with VAX-24 as well as 31?
Yeah, you should expect to see something similar. Obviously, the difference here, as Jim outlined is, whereas in the phase II studies, we had one comparator PCV20, in the case of the OPUS 1 study, we'll have two comparators. It'll be a more comprehensive data set just solely as a result of that. We would expect to share with you our OPA data, IgG data, and the available safety data at the time that we announce the data, which we should be a substantial portion of the available safety.
Sure. I guess maybe one last one on OPUS 1 here. What, in your view, constitutes a sort of a base case success? As a follow-up to that, what would be a best case scenario? Maybe using the bookend outcomes on serotypes as, say, a non-inferiority miss as kind of a negative bookend, and then superiority hit as a positive bookend.
Yeah, maybe I can start, and Jim can chime in. I guess a couple things I would say just for context here and the setup. For the VAX-31, the setup is we have 10 or 11 more serotypes in our vaccine than the two comparators that represent the standards of care today. As a result, we also have substantially higher disease coverage than either of the two standard of care vaccines today. Based on our previous data compared to PCV20, we've seen an overall increase in immune responses relative to the comparator, which kind of defies the historical trend where broader spectrum vaccines have seen a diminution in immune responses. We kind of reversed what has been the historical norm. All those things I think position us quite well in the context of the setup.
Jim also mentioned the way the FDA has historically evaluated these vaccines is based on a totality of the data assessment. If there are any non-inferiority misses, several other factors come into play. What is the degree of the miss if you have them? What are the absolute immune responses? What's the circulation of the serotype for which there may be a non-inferiority miss? I think, again, those things are important, and every vaccine that has come to market in this space historically has had at least one miss on the non-inferiority. That's kind of the backdrop. We have said, we did this on our call earlier this year, we do not expect to run the table against each of the two comparisons, right?
Right.
We expect to have misses. That has been the case historically. We have acknowledgement from the FDA that that is acceptable, again, in the context of the totality of the data. Rather than get into kind of base case, I would just say, even in our kind of optimistic cases, we expect to have misses. In the context of everything I outlined, we still think that represents not only a very approvable profile, but a best-in-class profile. A handful of misses in the context of all the things I mentioned, we still think would represent both approvable and a best-in-class profile for this vaccine.
We will see superiority based on the phase II in some.
With serotypes.
With PCV20.
Yep.
Yeah. Maybe so with CAPVAXIVE as well, I think. In lieu of us missing on a few, we should have superiority on a few as well, I think on both ends.
Yep. Last month, you published results from the VAX-31 phase II adult trial in, I believe it was Lancet Infectious Diseases. Can you walk us through what new data was in there and some of the key findings? Does this have any read-through to the ongoing phase III VAX-31 program?
Yeah. I think I would say the main body of the paper is pretty much what has been previously reported, just in a prose format. There is a supplemental component to that study, and we do have a lot of additional data, including looking at four-fold rise in antibody titers, looking at IgG results, looking at a number of other measures. This totality of data that we've mentioned several times, if there are misses, FDA will look at IgG, they'll look at four-fold rise, they'll look at a number of other components, the GMTs, relative to the comparator. A lot of those are included in the backgrounders, in the supplement information, and it to some extent allows you to do a more detailed comparison. That said, for this study, we ran the table, so you don't have to resort to the totality of data.
At least there's a benchmark now for when we have the phase III.
Got it. Last one maybe on VAX-31, on the adult side of things, assuming a positive phase III pivotal outcome, when do you anticipate filing the BLA, and where do you stand on manufacturing capabilities and commercial prep in the adult setting here?
Yeah. We've got the OPUS 1, 2 and OPUS 3 studies. We've also indicated we will have a manufacturing consistency study. The OPUS 1 study, as we've talked about, expected to read out in the fourth quarter, the 2 and 3 studies in the first half of next year. We continue to target being in a position inclusive of the data from the OPUS 1, 2 and 3 studies, and a manufacturing consistency study to target a submission of a BLA by the end of next year, which would put us in line, if achieved, for potential approval in 2028. That's the timeline to which we've been marching for the adult indication over the last couple of years.
Great. Well, great discussion on the adult program. Good overview there. I guess transitioning to the infant program, some readouts coming in the first half of next year. Can you just level set us and review the trial design there, and highlight some of the changes that you've implemented based on the prior VAX-24 infant data?
Yeah. In the 24 study, we had a low, middle, and then we had what was called a mixed dose. The mixed dose was where we increased seven of the serotypes to a higher dose and let the rest of them stay the same. We were assessing essentially what we might expect in a 31, because 24 plus seven boosted equals 31. Stoichiometrically, we were trying to mimic the total amount of protein as well as the total amount of polysaccharide that we would see in a 31. When we went to VAX-31, we weren't trying to see what the next stage would be. We have a low dose, we have a middle dose, then we have a high dose. That high dose, instead of 2.2, the majority are dosed at 3.3, with three of them dosed at 4.4.
We actually do have a true high dose in this VAX-31 study. Now, when we looked at the results of the 24 data, what we saw was for those seven that we boosted up to 4.4, we saw six out of seven an improvement in the immunogenicity or the immune response. We saw about a 20% improvement in the GMR, where for the ones that we dosed similarly at 2.2 micrograms between the mid and the mixed dose, we didn't see that decrease. Now, other vaccines have seen a decrease of about 25% because of carrier suppression when you add incremental serotypes. Ours stayed relatively the same. Based on that, the fact that we didn't see the same level of carrier suppression with our technology and we saw improvements by boosting the dose, we decided to stop the study briefly and add what we call an optimized dose.
The optimized dose is majority of serotypes at 4.4 with the remainder at 3.3. We now have two doses in the VAX-31 pediatric study that are actually higher than the highest dose that we studied with VAX-24. Other than that, the study design is relatively the same. The readouts are at the same endpoints and so on and so forth.
I guess, what do you think is the biggest disconnect with investors on the phase II data and the translation into phase III success, just given some of the changes in dose optimization that you've implemented?
I would say, I guess, there are several factors that confounded the reaction to the data last year. I think our view is we continue to not only interrogate this data internally, but we've talked to a number of KOLs and former ACIP members, and we are spending time with investors on the same, continue to believe that the VAX-24 data set on its own represents an approvable profile that would represent a best-in-class vaccine in the infant market. As Jim said, the VAX-31 trial represents substantially more disease coverage. We feel incredibly confident in the incremental serotypes, and we are now exploring, as Jim noted, two dose arms that are higher than any evaluated in the VAX-24 study. We expect to see improved immune responses.
Our view is if we can simply replicate the VAX-24 data in the context of our broader-valent vaccine in VAX-31, that would be a very winning hand. We do hope and expect to see an improvement in immune responses for the reasons Jim outlined with the higher doses being explored.
Got it. A couple of questions on the competition, competitive landscape. Certainly, there are competitors out there pushing forward with higher valency vaccines. I guess excluding the approved vaccines, can you give your thoughts on the competitive threat from some of the more relevant competitors and why you think Vaxcyte ultimately can come out ahead? I'll mention obviously GSK with their 30-valent vaccine. Pfizer has a 25-valent vaccine, and then Merck is working on a next-gen, but I'll leave it up to you guys to kind of give your thoughts on that.
Yeah, I guess maybe I would say, Joey, I know we don't have a lot of time here, so perhaps without getting into a kind of competitor-by-competitor assessment, I think our view is in the context of the serotype and disease coverage that VAX-31 represents, and obviously we have VAX-XL that's waiting in the wings if and when needed. In the context of the serotype coverage of VAX-31, in the context of kind of just the immune responses we have seen and the quality of them for VAX-31, and finally, in the context of where we are in terms of stage of development, I think we feel very good about the opportunity for VAX-31 relative to the competitive data set and our ability to stay ahead of the competition from a timing, valency or immune response perspective. Obviously it's a competitive field.
The competition is a sign of the size and the opportunity in this market. We monitor it very closely. We do like the position we're in.
I certainly want to ask a couple questions, quick ones on VAX-A1, that's back in the fold now. There's a lot of excitement around that, your group A strep vaccine. Can you briefly describe the unmet need and potential market in group A strep and maybe describe in a little more detail what VAX-A1 is?
Yeah. VAX-A1 is a multicomponent vaccine to address group A strep related disease. Now, group A strep, there are a lot of things that group A strep does. It causes invasive disease in elderly, it causes pharyngitis in kids, but it can lead, if untreated, to an autoimmune reaction called rheumatic heart disease, where there's over 500,000 deaths every year. Because of that, you end up with very aggressive antibiotic treatment if there's a group A strep disease or if there's a sore throat, basically, whether it's group A strep or not. You're seeing about almost one in five antibiotics between three and 10 years of age in the U.S. being prescribed for group A strep, and that's leading to increased antibiotic resistance. You've seen increased rates of invasive disease over the past decade, more than doubling.
You've seen tripling of antibiotic resistance to three major categories of antibiotics. From that perspective, and then ultimately it's a ubiquitous disease, so the medical expenses every year are $6 billion in the U.S. alone. There's a huge cost associated with treating suspected cases.
Got it. I guess, what are the next steps for this program and thoughts of phase I and what profile you need to advance this into further development?
We said that we were going to go in the clinic this year with a phase I in adults. That's primarily so we get safety and a bit of immunogenicity. We'll step down into toddlers and school kids after that. Ultimately, because pharyngitis is so ubiquitous in school kids as they enter the school, we can probably do a phase II proof-of-concept efficacy analysis for pharyngitis after that study.
Great. Well, last one from us on cash position, and what's the outlook there on cash burn and any guidance for cash runway?
Sure, yeah. We completed the financing earlier this year. Pro forma for the net proceeds from that financing, we have about $3 billion on the balance sheet as of December 31, again, pro forma for that financing, which puts us in a really solid position to advance over the next several years and through all the clinical milestones I outlined for both the adult and infant indications, and into a potential approval of VAX-31 in adults. What we have said, just from a chronology standpoint, is we've got the capital to fund the company in advancement of these programs to at least the end of 2028.
Great. Well, thank you Andrew and Jim for the excellent discussion.
All right, thanks, Joey.
Great. Thank you, Joey. I appreciate it. Thanks, everyone.
And thanks everyone for joining us on the webcast. Have a good day and a good rest of the conference