Moderna, Inc.

Hi, welcome to Moderna's second quarter 2023 conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised, today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lavina Tulukdar, head of investor relations. Please go ahead.

Thank you, Kevin. Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's second quarter 2023 financial results and business updates. You can access the press release issued this morning as well as the slides that we'll be reviewing by going to the investor section of our website. On today's call are Stéphane Boncel, our Chief Executive Officer, Stephen Hogue, our President, Arpa Gouray, our Chief Commercial Officer, and Jamie Mock, our Chief Financial Officer. Before we begin, please note that this conference call will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see slide two of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially. from those expressed or implied in these forward-looking statements. With that, I will turn the call over to Stéphane.

Thank you, Lavina. Good morning or good afternoon. Today, I will start with a business review of our second quarter. Stephen will then review our clinical programs before ARPA gives an update on our commercial progress and plans. Jamie will present our financial results, and I will come back to share some final thoughts. In Q2, we reported revenues of approximately $300 million, reflecting the seasonal nature of endemic respiratory vaccines. Given our investments in our four infectious disease vaccine programs, which are in Phase 3, and our oncology program also in Phase 3, these off-season quarter sales resulted in a gap net loss of $1.4 billion, gap diluted loss per share of $3.62. We ended the quarter with a cash and investment balance of $14.6 billion. We continued to execute on the capital allocation strategy, prioritizing organic growth of our platform with investment in our business. In Q2, we invested $1.1 billion in R&D, continuing investment in late-stage clinical programs and progressing our pipeline. SG&E costs were approximately $300 million. capital investments were approximately 200 million. Yet to date, our external investments were all strategic collaborations, with the exception of OriZero in Japan, which was an acquisition. OriZero was renamed Moderna Enzymatics and is being integrated into Moderna Manufacturing Process Development Organization. From a capital return perspective, we repurchased 4.4 million shares in Q2 for a total of $628 million. Now turning to commercial and late-stage clinical updates in the quarter. With the submission of our XPB-updated COVID-19 vaccine applications to regulators globally, we are now awaiting approval to start fall of 2023 sales. As you will hear from APA shortly, we are updating our COVID-19 sales expectations for 2023 to a range between $6 and $8 billion. This range reflects additional contracts in the U.S. commercial market and other countries. This range is wide given the uncertainty on the U.S. vaccination rate. Our commercial team is also preparing for the 2024 launch of RSV, our next respiratory commercial product. Regulatory applications have been submitted in major markets around the world. We've also started to manufacture mRNA-1345 in preparation for the launch. As a reminder, at launch, this product will be in a pre-filled syringe presentation, which combined with a strong efficacy profile will position very well our product to healthcare professionals. In oncology, for mRNA 4157, or individualized neoantigen therapy, or INT, we are continuing to scale up manufacturing to support clinical development and commercial markets. We are very pleased to report our phase three study in adjuvant melanoma has begun enrolling patients in July. We'll fly on slide six, our updated company profile. The breadth of our late-stage pipeline means we could see multiple launches in 24, 25, and 26. Turning now to slide seven. I am proud to share that Moderna has been named one of the world's most innovative companies in 2023 for pioneering AI-driven innovation by the Boston Consulting Group. As many of you know, AI has been part of the foundation of Moderna's research and development programs for several years. We have built our own AI models for protein and mRNA engineering, assay data analysis, regulatory interactions, and many more of our use cases. As we continue to be an AI leader in biopharma, one of our key Moderna mindsets is that we digitize everything possible. as we recognize that this will be central to the impact we have with AI. As of 2023, AI training is required for all Moderna team members, and we facilitate this training at the corporate level for AI Academy. We have challenged everyone across all of our business functions at Moderna to incorporate AI into their everyday workflow. I'm happy to share our AI implementation is accelerating for Moderna. Our secure large language model is called MChat. As you can see on the graph, our MChat usage has grown rapidly amongst our employees since its introduction on May 18. Around 50% of our employees use it already only 60 days after launch. With that, I will now turn to Stephen for an update on development programs.