All right. Good afternoon, everybody. Welcome to Guggenheim's Healthcare Innovation Conference. I am Seamus Fernandez, one of the Senior Biopharma Analysts here at Guggenheim, and I am really pleased to be joined again this year by the Vaxcyte team. Not necessarily spelled the same, sounds an awful lot like the namesake, but Andrew Guggenhime is immediately to my right, President and CFO. Jim Wassil, to his right, EVP, COO, and CSO. Mike Mullette, the Chief Commercial Officer. Maybe we will just kind of kick off. Let's talk about the VAX-31 adult program just as a starting point. Actually, Andrew, I did want you to jump in, maybe provide some introductory thoughts on the state of the business before we get right there, and just the vaccines market in general as you see it.
Great. First of all, thanks, Seamus, to you and to your colleagues at Guggenheim for the opportunity to be here at the conference to present today. Great to be here. This is a very exciting time for Vaxcyte. For those of you that are less familiar with the company, we are exclusively focused on developing and commercializing novel vaccines to prevent or treat bacterial infectious diseases. We have a proprietary technology platform that allows us to make and develop vaccines to address some of the limitations that the conventional technologies face, and we are leveraging that proprietary technology across our pipeline of vaccines, led by our pneumococcal conjugate vaccine, or PCV franchise. Seamus, you asked about VAX-31. This is an $8.5 billion global market comprised $2.5 billion-$3 billion in the adult segment and the balance in the infant segment.
Market projections forecast the growth in this market from the $8.5 billion today to $12 billion or so over the next several years, really driven by growth in the adult market, both here in the U.S., as well as outside the country. To that end, we are coming off about a month away, removed from our results from our first pivotal phase III study of VAX-31, our PCV, a 31-valent PCV in the adult population. The data exceeded our own expectations, and we are thrilled to have the profile that we see with this vaccine. I know we will get into that. That study is the anchor for our phase III program of VAX-31 in adults to ultimately enable a BLA submission.
The rest of the program is comprised of the OPUS- 2 and OPUS- 3 studies, for which we expect data in the first half of next year, as well as a manufacturing consistency study, all to enable a BLA submission, for which we are guiding in the first half of 2028. In parallel with the clinical and manufacturing activities over the next several quarters to enable that submission, beginning to prepare for a commercial launch in this large and growing market. The infant segment is today larger. That is likely to ultimately equalize over time based on the growth in the adult market and our forecast. We have a 31-valent infant program underway where we have completed enrollment and expecting data from that phase II study by the end of the first half of next year. We can talk if we get into it about our unblinding and disclosure strategy.
Those adult and infant programs are really what anchors this company, and couldn't be more thrilled with the adult data and looking forward with high anticipations for the upcoming infant data readout. I'll cover one other aspect of our pipeline before we get into Q&A. We also have in the clinic our VAX-A1 program to prevent Group A Strep.
This is a program for which there's also an adult and infant opportunity, and we just announced last week we have advanced to the stage 2 portion of a phase I study in adults, the primary purpose of which is to explore the safety and tolerability of the vaccine, but ultimately to gather a dataset that will enable us to move into the school-aged children population in a phase II study where we believe we can demonstrate it with a reasonably sized study, efficacy study, whether we see the efficacy responses to further advance the program. Super excited to be here today. We did, on the heels of our readout last month, consummate a billion-dollar financing comprised of equity and convert. We now have pro forma for that financing, about $3.4 billion on the balance sheet as of the end of September.
Well-financed to advance all of our programs forward, and importantly with this financing, to fully fund the expected launch of VAX-31 in adults.
Great. Maybe we can just talk about the OPUS- 1 top-line results. Robust data, but I'll leave it for you guys to kind of remind us how strong those data were.
Yeah. For me, they exceeded my expectations. I think the results speak for themselves. According to our protocol, we didn't miss on any of the primary endpoints. We went 11 for 11 for the serotypes that were in PCV20 and PCV21 in VAX-31. We went nine for nine for the ones in 20 and our 31, and we went eight for eight for the ones in CAPVAXIVE and that were in our vaccine, as well as meeting the superiority for the three that are in neither, plus cross-reactive 20B. Overall, we also had a number of results that were statistically greater. While that's not going to be as clinically relevant, it's good to see that the immunogenicity was sustained or improved in these overall results.
Great. So, maybe just in terms of some of the FDA's kind of thresholds, can you just remind us a little bit of the kind of more stringent threshold, what that means, and honestly, what it means for incremental potential competitors.
Yeah. So, the FDA has been watching each subsequent time that a new vaccine has been approved, from seven to 13 to 15 to 20, and so forth. What has happened because of carrier suppression, immunogenicity has decreased for all of the serotypes on average. So, it wasn't just one or two that were lower on average, 20, 25% decrease each time. Well, they're saying, okay, they're calling this immunologic creep. So they're saying, "Okay, we understand that there's a trade-off. We're getting greater breadth of coverage, more contemporary circulating disease, but we don't want to continue to sacrifice immunogenicity." So, the historical endpoint of 0.5 has been used. The FDA has said, "We want to see something a little bit more stringent because we've already seen some of this immunologic creep." Now, they asked us to accept that. We looked at our phase II data.
We felt that we have very strong immunogenicity, so we were okay with moving forward, and obviously, you can see what the results look like. So essentially, we met their standard. We don't see the immunologic creep that others have seen, and in fact, like I said, some have been even higher statistically than previously.
Yeah, I would just add to what Jim said. I mean, I think the combination of the improvement overall in immune responses with this new standard, to your question, Seamus, will make it only that much more difficult for future potential broader valent vaccines to meet the required hurdles for approval.
Great. Maybe just to, before we get into more of the specifics around moving through the BLA, can you just remind us how much incremental coverage is being achieved with 31, whether it be versus PREVNAR 20 or CAPVAXIVE? Also, what are we learning along the way commercially that could be a limitation relative to missing kind of seven of the key serotypes?
Well, I'll let you cover the commercial.
Yes.
But in terms of incremental coverage, it's roughly 30%-35% incremental over PCV20.
Yeah.
We have about 95% overall against invasive disease, so we cover the majority, and it's about 15% or so above CAPVAXIVE.
Yeah. To talk about what you asked, Seamus, a few years ago, I think when Merck started their development program, they were, of course, limited by their technology to 20 or 21 serotypes. What they did, which I think was really seen by the field as positive, was they said, "Okay, the serotypes that are covered in PCV13 are going to be covered. Therefore, we can remove some of those from our vaccine and look at serotypes that are more relevant to adults today and in the future." They focused on 21 serotypes, but it's not just one incremental serotype versus PCV20. In fact, it's many more different.
What happened is when I think PCV21 came to market and launched, you saw a really strong uptake of market share, basically 0%-45% or so in the first 12 - 18 months, which was, I think, a really strong launch for CAPVAXIVE. But they had one Achilles heel, actually two, which was serotype 4 and serotype 19F, and those were not included in CAPVAXIVE. Unfortunately, in the U.S., serotype 4 and serotype 19F are rebounding, and in many cases, significant. That's been a real gap in their coverage. While they have a higher percent of coverage, they are missing key serotypes in the vaccine. This has created a really difficult trade-off for healthcare providers who have to make a decision of two products that provide really different protection offerings to their patients.
I think as we head into our commercialization, we hope that VAX-31 can make that a very simple story for providers, covering the serotypes that are relevant for both vaccines in one VAX-31.
Perfect. Jim, help us walk through what remains in terms of the components of the BLA that need to be satisfied from here.
Yeah. So, in order to get approval, we have three main clinical studies that are ongoing or just reported out. One is the OPUS- 1.
Yep.
We also have OPUS- 2 and OPUS- 3 that will be reported out in early next year.
First half.
First half. Thank you. The OPUS- 2 is concomitant use with flu. A lot of times, the pneumococcal vaccine is given in the retail space together with flu, so we want to show that there's not a level of interference that would be prohibitive from giving those two together. The OPUS- 3 is looking at people who have been previously vaccinated with other vaccines. There's a huge benefit, obviously, of going from the coverage and adding an incremental 30%-35%. So, we want to show that those that have gotten the 13, 15, PNEUMOVAX 23, the 20, and even the 21 can be revaccinated. After that, we are required to do what's called a manufacturing consistency study. That's where, at commercial scale for a biologic, FDA requires you to show that you can have consistency of immunogenicity in multiple batches.
That will be initiated in 2027, and that plus, obviously, a few of the CMC remaining activities will be done by then.
Okay, great. Not to say that it was a delay or a push-out, but what was the trade-off to kind of drop or to have the BLA be first half of 2028? Was that just sort of learnings, kind of building up the capacity, or is it actually making sure that you have full commercial capacity to launch?
Yeah. It's less a function of our commercial readiness, as it relates to kind of our sales and marketing activities or inventory levels. More a function of the pretty substantial volume of work that needs to be completed to enable that submission. Not only the OPUS-1 study, the OPUS-2, OPUS-3 studies, as Jim said, first half of next year, the manufacturing consistency study, and the blocking and tackling across all aspects here. It was the first time we'd issued BLA guidance, but there's a substantial amount of work and feel comfortable that that's the right timeline to enable us to deliver all the requirements in what will be a pretty substantial submission to the FDA.
Right. There's a huge number of, I guess the way that Jim has described it is it's like 31 vaccines all in one.
That's how the FDA looks at it. You got to manufacture 31 and then times three to show consistency of manufacture of drug substances, sized, activated drug substances, three eCRMs and three DPs all together, and demonstrate that you can do that consistently from in-process and release testing. Then you put it in the clinic, do that test. Now, we're very comfortable with where we're at because we've produced a lot of batches. As Andrew said, we've been building inventory already, preparing for launch. So, we have a lot of this data already. It's just a matter of completing that and running the study and getting it all in a package and submitted.
Mike, talk about the U.S. market as it stands today, and then how you see 31 kind of evolving into that market.
Yeah. So, U.S. adult market today, as was mentioned by Andrew, is around $3 billion. Really, the major driver over the last few years has been this lower age recommendation down to 50- 64 years of age, so now essentially a 50 plus recommendation. That market, we continue to see growth in. When we come to market, we'll be thinking about a few different categories of the recommendation, whether that be revaccination of people who have received a lesser valent vaccine, which is consistent with previous PCV recommendations, potential booster doses, or other high-risk groups. So, we will be looking at all of those opportunities for growth in the U.S., but those recommendations are sort of set. The market is established. In the ex-U.S. markets, we see also a lot of growth.
These are new markets that have come online over the last 24 months or so. Most major markets are already online or have some sort of adult program, but those programs can continue to grow to be more consistent with the U.S. recommendation. For example, there may be a few countries today that are only 65 plus, or in some countries, actually only 65-year-olds, and then over time, they'll expand as their budgets increase and as their populations have opportunity for immunization. I think if you were to ask us a few years ago, or even a year or two ago, the adult to pediatric market ratio is adult is about a third and pediatrics is two-thirds.
We see that opportunity going closer to 50/50, really with the growth of the market, as Andrew talked about earlier, being substantially driven by the adult market, whereas the pediatric market is essentially flat. It's widely accepted and adopted. Immunization rates will remain fairly constant, and you may have some price movement, but other than that, the volume is really driven by adults.
Got it. Great. Let's dive into the infant program a little bit. Obviously, just remind us the design. The program's fully enrolled, but what are the key factors that we'll be focused on in the updates? You've got kind of, I wouldn't say two potential data reveals, but-
Yeah
there are two critical endpoints that investors are focused on.
Maybe I'll just go through the study design.
Yeah
This is pretty standard. We're giving a vaccine to infants at two, four, and six months of age, and then we do a serology assessment at seven months of age. We then give them a boost between 12 and 15 months, and one month later, take another serology. So, there are two serology endpoints, as you alluded to. In our study, we're doing four doses. We're doing a low, a mid, a high dose. The high dose is the same dose that we took forward for the OPUS-1 study. And then based upon the results we saw in the 24 study, we added an additional arm that's even higher than the high, which has the majority at 4.4 micrograms. The first readout will be a threshold assessment, percent who achieve an antibody above 0.35 micrograms per mL, and that will be compared to PCV20.
Then the second one will be a non-inferiority similar to what we saw in adults with 0.667 most likely. We haven't had our discussion with the FDA yet, but given that Pfizer has announced that they're using 0.667, that would be our expectation as well.
Okay.
In terms of timing then, I think as you alluded to, Seamus, we continue to maintain this optionality as to the ultimate unblinding strategy, and it's the unblinding strategy that will dictate the disclosure strategy. What we have said is we will either unblind both datasets concurrently and announce them concurrently, or we may choose to unblind the primary series dataset first, in which case we'd announce that first, followed later by the booster dataset. We have been very clear that we continue to lean toward the concurrent unblinding and disclosure strategy. We've said in either case, we'd have the full dataset by the end of the first half of next year.
On the trial design, we conducted our first-ever infant dose-ranging study with our VAX-24 program, based on the observations from that study, as well as adult, we have these two dose arms now being explored in this VAX-31 study that are higher than any of those explored in the VAX-24 study. The learnings give us the confidence we have that we will see improvement in immune responses based on the dose response we saw in the prior studies that led to the design of this study, which was modified in its interim to add, as Jim said, this additional dosing arm.
Got it. Just in terms of the choice to test this higher dose, what was the governing factor to explore the higher dose, the evidence that there is a dose response, from your perspective?
Yeah. A lot of that came from our results of our 24 study in infants, VAX-24 study. We had a low, middle, and then what we had was a mixed dose. The mixed dose had seven serotypes that were dosed at a low, mid, and then high, in this case, at 4.4 micrograms, where the remaining serotypes were dosed at 2.2. What we saw was there was a clear dose-dependent response for those seven serotypes that were dosed at low, mid, and high. We saw an improvement for six out of the seven serotypes of more than 10%, we will say about 15%-20% improvement going from 2.2 to 4.4. Subsequently, we did not see for the ones that stayed at 2.2 substantial interference or this carrier suppression that others have seen.
We felt that we could increase the dose, not see interference, but rather see an improvement in the immune response. What we did was at that time, we decided to add that to the ongoing 31 study. We paused it very briefly, added the additional study, and re-randomized it-
Additional dose, yeah.
for the optimized dose.
Got it. Okay, great. Then, just in terms of how we should think about the relative, when the data come out, how would you have us, or encourage us to think about the data? We have some data that was revealed recently from Pfizer. The way that they kind of communicated non-inferiority was including the powering up to phase III. How should we think about the data reveal, and while you may not be guiding to a specific number of serotypes yet, how should we just be thinking about what a robust vaccine looks like?
Well, personally, I think that if we can repeat what we saw with the VAX-24 in the 31, we have a robust vaccine.
Yeah.
We're going to be adding 11 serotypes. That's going to be a substantial increase in the coverage relative to PCV20, and even more so from an otitis media perspective. You have that benefit. We saw really robust responses against circulating serotypes. We did well with the ones that were circulating, and we believe that with this dose-dependent response that we saw in the 24 by increasing the dose, if we can even improve slightly some of the ones that were lower responders, it'll give us a really good, strong position moving forward into phase III.
Yeah, and I think, to your point, Seamus, obviously this phase II study is more limited in size than a future phase III study will be. Our focus will as much be on the point estimates or mean responses than the lower bound, because just the error bars will be wider in this study. That will help inform us in terms of setting expectations for a future phase III study. But as Jim said, we missed on a handful in the VAX-24 study, and in the context of a much broader coverage 31-valent study, that result we think would represent an approvable profile. It continues to be, and Pfizer has mentioned the same over the last couple weeks, really about the totality of evidence, the totality of the data that the FDA assesses.
Certainly, these non-inferiority thresholds are one component, but there are multiple data sets that they'll ultimately evaluate.
What's key in terms of just the vaccine not just being approvable, but commercially very effective, are there points of differentiation that kind of drive you to real commercial efficacy?
Yeah. I think we certainly are always interested in sort of makes and misses and how we evaluate PCV products. But the reality is, in the market, once those are approved by the FDA and you have a serotype in the label, that's really how providers look at this. I mean healthcare providers, the retailers who are delivering the vaccines, or large health institutions. We take a lot of energy talking about serotype makes and misses, but the reality is, on the ground, once it's in the label, that becomes your competitive position versus a peer. And what we've seen historically in this PCV market, really for a decade, in moving from seven to 13 to 15 to 20 to 21, is this constant preference to breadth of coverage.
And that's because what is happening right now with serotype four happens, and you want the broadest protection available, whether that's in adult population or pediatric population. We think we're very well positioned, and obviously we're talking in the context of a pediatric product. If we have a pediatric product with 31-valent, we find ourselves in a really good position competitively.
Great. We only have a minute left. This is always painful. Jim, 40 seconds on GAS.
All right.
Just, why are you so excited about it?
I think Group A Strep is one of the most underappreciated diseases. It causes over 600,000 deaths. Almost one in five antibiotics in younger age groups in the U.S. are given for Group A Strep or presumed Group A Strep, leading to antimicrobial resistance, and there's severe increases in invasive disease in adults too that are occurring. I think we've got a really great candidate. It has multiple virulence factors. It goes after an exotoxin, it goes after something that interferes with complement, as well as the standard polysaccharide conjugate and an adhesin protein. I really am looking forward to being able to see how this progresses.
Yeah, we just, as I said, announced that we're moving to stage 2 portion of that phase I study, so look forward to sharing the results of that second half of next year. Again, primarily safety and tolerability, but the goal is to see a data set that can help us move into exploring this in children in the phase II.
Not just 31 vaccines in one product.
Yeah.
You now are advancing the platform of the assets.
Yeah. Look, we've said this, we think that the Group A Strep opportunity is a blockbuster opportunity. Again, it has similar hallmarks to PCVs. The rates of disease are not inconsistent. You've got both adult and younger age populations, a huge need. There was a study done some years ago, $6 billion in direct medical costs in the U.S. alone. That number is likely only growing given what's happening with the disease. Very different, well, in this, we would need to run a full field efficacy study, but given the attack rates in school-aged children, you can conduct these studies at incredibly reasonable size.
Yeah. Great. Well, unfortunately, we are out of time, but never really is enough. Thanks again for joining us this year. Great to have the team back with us, and look forward to many successes in the months ahead and a BLA for the vaccine that I'm actually waiting for.
Great. Thank you, Seamus. Appreciate it. Thanks, everyone.