Good afternoon, and welcome to the Cantor Healthcare Conference. My name's Carter Gould. I cover Biopharma here at Cantor. I am pleased to welcome Vaxcyte to the stage. Joining from the team, we have Grant Pickering, CEO and Founder. Andrew Guggenhime, President and CFO. Mike Mullette runs commercial. Vaxcyte has one of the higher profile catalysts across all biotech, but certainly within our coverage. That's coming up later this year with data from OPUS-1. Grant's going to tell us a little bit about that, as well as some of the recent news with some opening comments before we jump into Q and A. Welcome, folks, and Grant, I'll turn it over to you.
Great. Thanks, Carter. Thank you for having us. Thank you all for coming. A very exciting moment for Vaxcyte. We have our VAX-31 adult phase III pivotal study reading out by the end of October. We tightened up the guidance for that late last week. It was originally fourth quarter. We've tightened that up to be by the end of October. If you're not close to the story, the pneumococcal class has been historically the largest segment of the vaccine industry. It has about an $8.5 billion annual run rate. The adult segment is a $2 billion-$3 billion market opportunity, but growing quite quickly. We have been working on a new generation of pneumococcal conjugate vaccines that leverage the underlying platform technology that we have control of at Vaxcyte.
It allows us to perform site-specific conjugation, so we can actually leverage the same components that have made up this class that has turned into a wildly effective way to prevent pneumococcal bacterial infections. We have produced data thus far through phase II clinical development that has shown unprecedented findings. What I'm talking about is this is a class where the vaccines are so effective that the included serotypes are effectively taken out of circulation, and in their place, other serotypes begin to circulate, which is what drives the need for broader spectrum vaccines. But if you take the older serotypes out, they return also. So you have to keep the pressure on the old ones while rising to the occasion of the new ones. That is what has driven what was originally a 7-valent vaccine to a 13 to a 20.
Unfortunately, the exchange has been broader coverage at the expense of lower immune responses. What we were able to show in phase II clinical development with VAX-31 was for the first time, we could show that we could provide much broader coverage and actually improve the underlying immune responses when we compared VAX-31 to Prevnar 20. So that was the basis of how we moved into phase III clinical development. In the meantime, a 21-valent vaccine, I'm sure will come up in the course of this conversation, has come out. So our phase III study that we call OPUS-1 will read out by the end of October. We'll have data for VAX-31 compared to both the 20-valent and the 21-valent that are out there. So very exciting time for the company and eager to tell you more as the conversation unfolds.
Okay, great. We are going to start off with a number of questions on, surprise, OPUS-1. Let us begin with as we think about the outcomes there, where is the bar for approvability as you understand it, and how that aligns with the value proposition for VAX-31?
Yeah. This is a class where, as I have just set up, you are always trying to substantially increase coverage relative to what is available today. As I described the dynamic historically, there has been this exchange to get broader coverage at the sacrifice of lower immune responses. Yet, that has been readily accepted. Every successive class of pneumococcal conjugates have had at least one miss on the endpoints where you are showing non-inferior immune responses to the overlapping serotypes while trying to ensure that the incremental serotypes have at least a particular threshold of immune responses. The bottom line is, perfection is not the price of admission in this class. The way that the regulators manage this class is with a lens on the totality of the benefit that the newer vaccine can provide over and above and in relation to the current standard of care.
For us, we are comparing VAX-31 to two different vaccines, one of which we have 10 more serotypes, and the other for which we have 11 more serotypes. The way that we think about this is it is the case that we have guided to one miss relative to the 20-valent comparator, and five misses relative to the 21-valent comparator, yet when you have 10 or 11 more, it means that we are expecting to have a much better vaccine and totality of argument coming out of that data. Our view is in looking at the historical precedents, and I will just give you one of them so you can put a point on it. When Prevnar 20 was approved in infants, the standard of care at the time was the 15-valent that Merck had gotten approved, and that product had six failed non-inferiority comparisons.
Yet the regulators were still willing to give the full license to all 20 vaccine serotypes because there was a belief that the threshold was exceeded with regard to what would continue to be a protective effect, and the benefit of the broader spectrum vaccine warranted its approval. Sure enough, that product now has 90% market share relative to the 15-valent. We expect to have a stronger case than that with regard to the number of misses relative to makes given the expanded coverage and so many more serotypes on top of either of the competitive products.
Okay. Very clear rebuttal to a lot of I think what's everybody's favorite parlor game of late, which is the serotype bogey sort of prediction game. You made a comment there around the comparison versus CAPVAXIVE. There, I think it does lead to, I think, some more substantial conversations around what's an acceptable number of misses. While there's been greater leeway in the pediatric setting, the adult setting, the results have historically been a bit narrower here. So help me get comfortable with that. Again, a recognition that CAPVAXIVE is a little bit of a newer product, has just gone through regulatory approval more recently. But why should we expect the agency to maybe offer a little more leniency there relative to some of the prior products? Or maybe I'm not thinking about it or I'm missing out on some key nuance you want to address.
Well, yeah. I think you're raising a couple of important points. The question is how translatable has the treatment for the infant vaccines been applied relative to how they might be applied in the context of the adult setting? I would say that the test that was passed when the situation that I just described, when Prevnar 20 had six of these misses relative to the 15-valent vaccine. How does that test compare to the adult situation? I would argue that that's a more important miss in the infant setting because that particular miss is on a well-defined seroconversion threshold. Without going into all the gory details, either you're above the threshold and that child is protected from disease in their first year of life, or you're below the threshold and they're not protected.
In that case, they actually had a meaningfully higher number of infants that were not protected relative to the comparator. Yet the totality of the evidence still warranted allowing for that exposure for the infants who would receive that broader spectrum vaccine. In the case of adults, we're talking about a different endpoint. It's a validated surrogate immune endpoint that correlates with the protection against this disease, but it's not a bright-line threshold that defines seroconversion. This is an average immune response compared across two different vaccines.
In the case of each of the misses that occurred in the adult space, the reason the FDA has allowed those serotypes to be included is because even though there might have been a statistically significantly different magnitude of average immune responses, the threshold that the serotype responses were at were believed to be well above what would be expected to be a protective threshold. That has been the case in each of the situations for Prevnar 20 and for CAPVAXIVE.
In the case of VAX-31, we have the benefit of a phase II study for which we showed extremely robust immune responses for which we would expect, even with a missed non-inferiority comparison that we're guiding toward, the threshold would be exceeded in ways that the regulators would be reassured that it would be very unlikely that you'd see breakthrough disease, even with a lower average serotype response on a particular serotype, particularly in the context of the total amount of disease that a 31-valent vaccine would provide relative to a 20 or 21. To be specific, the 31-valent vaccine that we have in development covers 95% of the circulating disease, whereas the 20-valent from Pfizer covers around 60%, and the vaccine from Merck covers around 80%. So we have a material improvement on top of any of these prospective non-inferiority comparisons.
Right. I thought you were going to get into some of the reemergence of some of those serotypes in certain geographies, but I'm probably going to save that little nugget for Mike here in a little bit.
Let's not forget about that because that's very important. But go on.
Maybe bring Andrew into the conversation here. As we think about how you're going to disseminate this data, how you're going to communicate to the street, have you given thought to that and what we should expect? Should this be something akin to the phase II, which was a pretty comprehensive reveal? How much nitty-gritty detail are we going to get?
Sure. Yeah, maybe I'll talk first about just the sequencing of the data rollout and then the content of the data that we expect to be announcing. From a sequencing standpoint, as we've done in the prior data readouts, we would intend to issue a teaser press release the night before, and then the morning of pre-market, issue a press release, conduct a conference call accompanied by an investor presentation. In terms of the content, while we have referred to this readout as top-line data, it will be a pretty comprehensive readout, even in the context of top-line data. The best example would be the announcement we made with respect to the VAX-31 phase II data, which was quite comprehensive. It'll be a bit different in this case, right?
In the phase III, we're exploring only one dose, the high dose, whereas the phase II was a dose-ranging study. In this case, as Grant noted, we're going to be looking at two comparators as opposed to one in the phase II. But we would expect to include, whether in the press release and/or the investor presentation, all of the forest plots showing the OPA comparisons to each of PCV20 and PCV21, the IgG data for both. You'll see the patient demographics, the tolerability, and safety data. So it'll be pretty comprehensive. We're taking very much a biotech approach rather than a pharm approach. We're not going to withhold to preserve opportunity for future publication, which we think we'll have the opportunity to do even with a fulsome data set.
The driver of the disclosure is really having the complete immunogenicity data set, and we'll also announce all the available tolerability and safety profile that exists at the time, which we expect will be the substantial majority of or all of the safety data, given it's up to six months since the last subject enrolls.
Maybe everybody's second favorite parlor game in terms of incoming questions on you guys is sort of the read-through from the OPUS-1 data to the pediatric effort, and really around the potential differential scenarios that could emerge from OPUS-1 and what that may or may not mean. How do you guys sort of answer that question, and why or why not should we think about there being read-through or read-across those two efforts?
Yeah. I think it is fair to say that the emphasis has been on the adult vaccination part of our business, and less so on expectations around the infant side. I think we have the right to really high expectations heading into the VAX-31 infant data. By the way, we have a fully enrolled phase II study, 1,000 infants, that will read out in the first half of next year, where we will get the data. I think what the key learnings were, vis-à-vis adult responses and infant responses, is that, of course, adults have been exposed to these immunogens. When we come in at a vaccination when somebody is in their 50s or 60s, they have been exposed to these immunogens. You are getting the benefit of some baseline immune response that is already in existence. It is, at some level, a boost.
In the infant setting, these infants are wholly naive, right? We are vaccinating two-month-old infants with their initial vaccination. They get a series. Our claim to fame has been built around leveraging our site-specific conjugation technology to minimize the amount of the protein carrier required so as to fit in more versions of conjugates to create a broader spectrum vaccine. It has been a very winning hand in the adult applications. What we learned from our initial infant data relative to the adult data was, whereas in adults, we have seen a really terrific dose response over the course of initially our first vaccine, VAX-24, then that segued into the VAX-31 data where we tested even higher doses. We were rewarded by that. We advanced the high dose from our phase II VAX-31 formulation into phase III. That is what we will see the results of over the next month or so.
Yet, we have not yet seen those higher doses in action in infants. The key learning coming out of the VAX-24 infant data was that you can drop the dose of the protein carrier too low, and in that naive host, you do not get the baseline immunogenicity that then creates a boostable response that creates durable protection. The results for VAX-24 were actually quite good. They just were not perfect. We had a handful of misses across the 24 serotypes. By the way, we have said and have consistently held to the fact that that is a very positive outcome. That is an advanceable program. When you have a 31-valent, that is obviously more attractive than a 24-valent vaccine. Heading into that data, we had already been planning to test higher doses.
We added an even higher dose when we got the original VAX-24 infant data. We see this nice dose response that can improve the immune responses at the primary series, but most importantly, drive the sort of T-cell responses that produce a higher boost and a higher set of antibodies that can provide durable protection. I do think there is a read-through with the higher doses that we are getting read out for VAX-31, not only on the phase II setting, but it will get reinforced on the phase III setting that will enhance confidence heading into the VAX-31 infant readout.
Perfect. Maybe to bring Mike into the conversation here and talk about some of the commercial dynamics. I do not know if you would call it a luxury, but having CAPVAXIVE out there in the marketplace and seeing how dynamic the PCV market has been, I guess, offers the possibility for lessons. How do you think about how that market has shifted and the long-term drivers as you plot out potential launch of VAX-31?
Yeah, sure. I appreciate the question. I think maybe first of all, it is great to see CAPVAXIVE and the Merck launch over the last 18 or 24 months. I think what we saw was a very fast and rapid uptake, especially in the retail segment. As many of you may know, the adult marketplace for vaccination has really consolidated, especially amongst two primary groups, the retail pharmacies, as well as the institutional or large healthcare systems. In the retail pharmacies, they came out really quickly. There was a great deal of anticipation about their design of the product, specifically for adult serotypes in the vaccine. I think that all started really well, and so what we were excited about, and I think some positive lessons learned, was that, is our targeting approach correct? Are we going after the right customers?
How can we replicate that and have lessons learned from different retailers who came along and adopted quickly? I think we have learned a lot from that.
Yeah.
The other part of the launch that I think we have seen in recent months is this flattening of the market share curve of CAPVAXIVE and Prevnar 20 around 50/50. I think last week it was 52% Prevnar 20, 48% CAPVAXIVE. That has also taught us a really important lesson, and I think you brought it up earlier, which is that coverage is king, and especially when you think about this strategy of making a trade-off between currently circulating strains in adults and what were thought of as formerly circulating strains. What we have seen, especially in some western states in the U.S., is a resurgence of serotype 4 and a resurgence of serotype 19F, and both of these strains are in PCV20, but not in PCV21.
As a result, when you really double-click on the data, you will see that these states with high serotype 4 and high serotype 19F have a much higher share still remaining of PCV20. While on average it is 50/50 across the country, in those states where serotype 4 is important, it is much higher. I think that is a really important lesson learned for us as we prepare for launch to hopefully provide, depending on our phase III results, of course, a solution to this trade-off that providers today have to make between one vaccine or another.
I want to double-click on that. To be clear, we are seeing that differential response in some of the western states versus the eastern states, I guess the steady state is attributed to that, not, as we hear all the time, Pfizer dominance or inertia in the landscape. Am I capturing that correctly?
Yeah, I think it depends on if you were to ask the Pfizer crew, I am sure they would give themselves some credit, and Merck as well. Listen, they have both done well with their product in the limitations and the opportunities that product has. I think that is why you see this 50/50 dynamic.
Right.
The problem still remains for healthcare providers. That problem is, today, they have to make a trade-off decision, and they have to decide, do I take an approach that is consistent with PCV20, or one that is consistent with PCV21's advantages? In either case, it is a trade-off, versus what exists in the disease state today. If we can help solve that trade-off decision for healthcare providers, we think we are putting ourselves in a great position, and obviously, of course, for patients as well.
Okay. And maybe for you and Andrew, just sort of the state of the U.S. commercial infrastructure today within Vaxcyte and how we should think about those efforts being stage-gated, whether that's on the back of OPUS-1 or some of the other data
Yeah
or manufacturing studies, et cetera.
Yeah, I mean, look, we're going to start conservatively and build our team. I'm thrilled. We've hired some really fantastic people with deep vaccine expertise in trade and distribution, essentially our retail and customer segments. Our launch lead, who came with pneumococcal experience. Our marketing leader. So we've put together a really fantastic group of people, albeit small today. We'll wait for the data. That'll give us a sign and a signal to kind of ramp things up. But also in the medical affairs arena, kind of our partners in the organization, that's really been bolstered. We made the announcement of bringing on Luis Jodar a few days ago, to lead the medical affairs organization. We have medical science liaisons in the field as we speak, building relationships with providers. So I would say we are appropriately conservative.
We have kind of the right skill set strategically in place, but we'll scale up as we go, post-data.
Okay.
I don't know if you want to add anything.
As you contemplate that launch and the rollout, at this point, what sort of is the state of the ACIP infrastructure to support the launch of a vaccine? Do you have confidence that we'll be in a good spot by the timelines we need to? As things stand today, I'd love to hear your vantage point.
Yeah, I mean, today, ACIP, unfortunately is really not operating. I think if you had asked me that question a year ago, I would've been a little more nervous. I've been very pleasantly surprised, and I think we all have, that the other medical institutions in this country have really picked up the slack. Even last week, we saw Vaccine Integrity Project and the AMA come out and sort of corral all of the recommendations for the respiratory season, confirm those recommendations out to the marketplace. I think that's been fantastic. They've really, I think, stepped up into this void that existed before, and that's given great confidence. I think Moderna's flu vaccine came into the market a few months, I guess about a month ago now, and that was included into those recommendations. So that's another positive signal for us as well.
Payers are still responding to the recommendations of old, and they have followed the newer even recommendations with flu vaccines and the respiratory season. We'll continue to watch. It would be great to have a credible ACIP delivering recommendations by the time we launch. If that happens, I'd be excited. But in lieu of that, I think the medical institution has done a fantastic job in picking up the pieces.
Okay. And maybe in contrast to a lot of my SMID cap brethren that are used to relatively more straightforward kind of launches and payer conversations, this is a little bit of a different beast right here. Can we just talk about how that's a different sell and a different kind of personnel, et cetera, to help in that process, and any other experience from your past that might be helpful in this regard?
Yes. Vaccines, for those maybe who aren't as experienced with vaccine commercialization, again, this is a highly consolidated field for adults. The way the commercialization works is we will have medical-to-medical exchange with large retailers at the CMO level, as well as large institutions at the CMO level. Then we enter into contracting agreements with those parties for their vaccine supply over the course of a year, or sometimes multi-year deals. Over the course of the next year, we'll bring in the, what we would call account management teams, who have experienced relationships with the IDNs that are important to our results and the retailers who are important to our results to make sure that we can achieve those goals. I've been very pleasantly surprised by the receptivity of folks to take phone calls and to be interested in coming over to Vaxcyte.
I'm quite confident that we can build a great commercial team and have really great success.
I think.
getting the data
I know you answered this question, but most of these companies that compete in this space are far larger than you. Big pharma, it's been the realm of large pharma for quite some time. Why can a SMID cap or a smaller company compete in this space with essentially a single offering, at least out of the gates?
Yeah. It comes back to we are not going to 10,000 different customers across the U.S. We're really going to a few hundred of customers. So, a smaller, first-time launching company is actually very much in a great capable seat to be able to address this launch, adult vaccination strategy with these key customers. Then I think for us over time, pending results of pediatrics in the future, our company will hopefully by then have grown and seen success and built brand reputation that can take us into the next stage of our growth.
I would just add, I mean, that is underlying kind of the coverage is king thesis that has been the case for over a decade in this space, and it starts with the clinical differentiation. We think, with the data we're expecting, we're going to be in a position to offer a substantially different, better offering than either of the two standards of care available today. So that'll be the headline. That'll get into the conversation. Are we a smaller company? Yes, but you've seen major pharma companies battle in this space for over a decade, and the market has gone overwhelmingly to the product that offers the most clinical differentiation.
Maybe for Grant and Andrew, on the manufacturing side of things, where you stand and we think about additional efforts that need to take place before you guys would need to contemplate a filing or a launch.
Yeah, so this has been a huge focus for the company from the very beginning. With vaccines, you can't be successful unless you can make it widely available. So the capacity and investment in the manufacturing foundation is fundamental. We've always had laser focus on that. So for those of you who've been following the story, you'll know that we invested in a smaller scale, Folsom production footprint with our partners at Lonza. But we went one step further, and we also invested in already building out the large-scale manufacturing facility that is online and manufacturing material right now. So we'll be launching out of facilities for which we've been making material for quite some time. Then we'll be segueing to larger scale, even more efficient production capabilities that we've already made the investment, and they're coming online right now.
Yeah, I think we're extremely pleased with how things have gone. The key challenge there was staying ahead of the capital needs, and we've been able to manage that effectively to date. Andrew, anything to add?
No.
Okay.
And maybe just with the final minutes here, we can talk about VAX-A1, your effort into strep here. And we'll start with a provocative question, and then maybe you can jump down whatever path you want to. Just not a lot of precedent here. We've seen really no progress for decades now after some early efforts a long time ago. Why should we have confidence here?
Yeah. This is a big problem. This is one of the bacteria that results in the highest number of antibiotic prescriptions to prevent more serious disease. It's great that we have the antibiotics, but we all know how big the antimicrobial resistance problem is, and prescriptions for this particular disease are a big part of why that is an emerging issue. It's true, there is no vaccine here. We don't have the benefit of the trail having already been blazed like we do with the pneumococcal class, there is inherently more risk to what we're doing here. In part, it's how compelling is the market opportunity, and then how compelling is your solution from a technological perspective. On the business side, the case is quite compelling, right?
One of the reasons why the pneumococcal class has become the largest part of the vaccine segment is the importance and the amount of cost and suffering that you're saving by preventing the disease. But it's also the fact that this is an affliction that affects not only the childhood group, but it also affects older adults as well. So you have an opportunity with Group A strep, like with pneumococcus, to vaccinate older adults as well as children, which creates a substantial market opportunity. The magnitude of the disease, for instance, the adults is a great example. The amount of invasive disease caused by pneumococci 15 years ago when the universal recommendation was made to use them in Americans over the age of 65, that amount of invasive disease is exceeded by the amount of Group A strep invasive disease. We're talking about a very serious problem.
Why is it that we have not come up with a solution to prevent this particular bacteria? It's a long story, which we have 28 seconds left. The bottom line is there were some issues with cross-reactivity with immunogens in the bacteria and human tissue. It's the reason why Group A strep leads to scarlet fever, that leads to damage to people's heart, that results in 900,000 deaths a year after those infections. That's why you have to nip it in the bud with the antibiotics. But what has been learned in the meantime is what parts of the bacteria were crossed with human tissue, and the vaccine we have developed is devoid of those overlapping components. We think we have a safe approach. We have to prove that.
But we already have a construct that looks very compelling that would have universal properties to prevent the wide array of Group A strep serotypes that cause disease, and we're using a conjugate approach. That is the approach that has underwritten every major bacterial vaccine in existence. We're using the tried and true approach, and we have another thing working for us, which is both the protein carrier and the carbohydrate polysaccharide. Sorry to geek out. Both of those can launch antibody responses that can clear the bacteria. Usually, it's only one of the two, but both of them can work for us to clear this particular bacteria.
Great. Okay. We're going to have to wrap it up there. But 20 - 50 days from now, we'll have OPUS-1 data, and can't wait. Top catalyst to watch in the Q4.
Thank you, Carter.
Thanks.