Moderna, Inc.

Good day and thank you for standing by. Welcome to Moderna's first quarter 2024 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 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 the speaker today. Lavina Tuluptar, please go ahead.

Thank you, Kevin. Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's first quarter 2024 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 Stefan Bontel, our chief executive officer, Stephen Hogue, our president, and Jamie Mock, our chief financial officer. Before we begin, please note 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. I will now turn the call over to Stefan.

Thank you, Lavina. Good morning, or good afternoon, everyone. Thank you for joining us today. I will start with a review of the business. Jamie will then present our financial results. Stephen will review our late-stage clinical programs. And I will close by sharing our 2024 commercial priorities and major upcoming milestones. Our COVID vaccine has already impacted hundreds of millions of people. I'm excited by the progress we've made with our pipeline that has the potential to impact many more people. During the first quarter, we presented substantial clinical progress during our vaccine day with exciting data on the BV, VZV, and norovirus. In addition, along with our partner Merck, we expanded studies for individualized new antigen therapy, INT, into three new indications. In addition, through ongoing phase 3 studies in adjuvant melanoma and adjuvant non-small cell lung cancer. A phase 2 free study has started in neoadjuvant adjuvant cutaneous squamous cell carcinoma, another form of skin cancer. Phase 2 clinical trials have started in adjuvant bladder and adjuvant kidney cancer. Together, our vaccines and therapeutic portfolio have a potential to impact hundreds of millions of people each year. I am pleased with our Q1 performance. Since the beginning of the year, we announced four important business agreements and collaborations. We entered into a non-exclusive IP out licensing agreement with a leading pharmaceutical company in Japan. The agreement includes an upfront payment and low double-digit royalties to Moderna on net sales of COVID-19 products marketed in Japan by this company. It is nice to see a company recognizing our IP and asking us for a license. Second, we recently announced a contract to provide 12.5 million doses of our COVID-19 vaccine to the Ministry of Health in Brazil. I am very pleased with this partnership, as it is the very first time that Moderna works with the Brazilian government, and we look forward to providing these doses to protect people in Brazil as they go into their winter season. We announced a project financing program for up to $750 million in funding with Blackstone to further develop our flu program. We also made public our collaboration with OpenAI to use AI as a transformative tool to increase speed and efficiency, and ultimately to improve patient outcome across our business. Finally, we agree to metagenomics to terminate our gene editing collaboration. All rights granted under the collaboration will be returned to metagenomics. This is a good proof point of Moderna continuing to prioritize our assessment of a best opportunity to drive results. Turning to Q1 financial results. In revenues, we were ahead of our plans at $167 million, reflecting the highly seasonal nature of our respiratory vaccine business. The net loss was $1.2 billion. We ended the quarter with $12.2 billion of cash and investments. We communicated during our November call our focus on financial discipline. I am pleased with what the team has achieved with our operating expenses, Cost of manufacturing expenses plus cost of R&D expenses plus cost of SG&A expenses were down almost $800 million in Q1 2024 versus Q1 2023. Jamie will elaborate on this in his section. With that, I will now turn to Jamie.

Thanks, Devon, and hello, everyone. Today, I will walk you through our financial performance for the first quarter and provide commentary on our 2024 financial frameworks. Let me start with our commercial performance on slide eight. Net product sales for Q1 were $167 million, down 91% year-over-year, mainly driven by lower sales volumes of our COVID-19 vaccine in regions outside the United States. This decline aligns with the anticipated transition of the COVID-19 vaccine market towards a seasonal pattern. Whereas in the first quarter of 2023, we primarily delivered doses that were deferred from 2022. Q1 was driven by sales in the US and the rest of the world, largely Latin America markets. For Q2, we expect about $100 million in sales for a total of approximately $300 million in the first half of 2024. Q2 will include a portion of our recently announced contract with Brazil. Moving to slide nine, net product sales were $167 million, as I just explained. For the first quarter of 2024, our cost of sales was $96 million, which included third-party royalties of $8 million, inventory write-downs of $30 million, and $27 million related to unutilized manufacturing capacity and wind-out costs. This resulted in our cost of sales representing 58% of net product sales, up from 43% in the same quarter last year. The increase in cost of sales percentage was primarily due to the lowest level of sales in the quarter. We continue to expect the full year cost of sales to be approximately 35% of product sales. However, due to the strong seasonality of our business, we expect a higher percentage in the first half. Moving to our R&D efforts, Q1 R&D expenses were $1.1 billion, reflecting a decrease of 6% year over year. This reduction was primarily due to the absence of upfront collaboration payments being made this quarter. The upfront payments made in the first quarter of 2023 were related to our strategic collaborations with Generation Bio and LifeEdit. With the Q1 spend of $1.1 billion, we are tracking towards the full-year expected spend of approximately $4.5 billion. Q1 SG&A expenses were $274 million, marking a 10% decrease year-over-year. Importantly, this decrease was driven by all functions in SG&A, and it is a result of our strong focus on cost discipline and strategic investments driving productivity. I will provide additional color on the next page. We reported an income tax expense of $10 million for the first quarter of 2024 compared to an income tax benefit of $384 million in the same period last year. The shift is primarily due to the continued application of a valuation allowance on the majority of our deferred tax assets, which we first established in the third quarter of 2023. Net loss for the period was $1.2 billion compared to net income of $79 million last year. Diluted loss per share was $3.07 compared to diluted earnings per share of 19 cents in 2023. We ended the first quarter with cashing investments totaling $12.2 billion, down from $13.3 billion at year end 2023, largely attributable to research and development expenses, and operating activities. Moving to slide 10, I want to take a moment to elaborate on the efficiencies we are now seeing across the company. As a platform company, we have the opportunity to build a unique operating model. And over the last few years, we have invested purposefully into people, processes, and technologies to build foundational capabilities that will allow us to scale efficiently. First, we ended 2023 with nearly 6,000 employees. up from 1,300 at the end of 2020. Every function scales capabilities to enable the increasing product launches we expect over the coming years. Additionally, as you know, Moderna has always led with a digital-first mindset. Over the past three years, we have nearly doubled our built-for-purpose software applications to digitally enable our teams. As an example, we recently went live with a newly implemented rebuilt ERP system, SAP 4.0 HANA is our new digital backbone for all our operational activities. We have used SAP in the past. However, it was built for a research and development-focused company, and now we have implemented an entirely revised version supporting our end-to-end business processes more effectively and efficiently. Another example is our rapid adoption of artificial intelligence. Over the past year, we have built over 750 GPTs. One example in the legal space Our contract companion GPT streamlines the task of reviewing and summarizing contracts across the business, with the GPT providing step-by-step guidance to craft a tailored and insightful summary. This enables any function to extract critical insights from contracts whenever needed, minimizing bottlenecks, and freeing up Moderna's legal department to focus on work of higher strategic value, thus enhancing operational efficiency and decision-making efficiency. Another example in G&A is a purchase-to-pay GPT for all questions around our procurement and payment processes. Instead of our employees having to find and read policies and procedures, they can easily query the GPT. It also saves time for our procurement and payables teams from answering numerous questions. AI has already changed our way for a short period of time. In general, we see the area developing at incredible speed that allows for an unprecedented impact on productivity in many areas. We have rolled out a comprehensive training program and are committed to driving this technology breakthrough. As a result of these strategic investments in the people, processes, and technology, we were able to significantly reduce purchase services and our use of external consultants, which contributed heavily to the 10% year-over-year reduction in SG&A spend. We are also seeing similar benefits in R&D and manufacturing. In general, we now have a solid foundation with our operating model. As we continue to grow our commercial activities, we will need to further invest. However, we will be able to do that more efficiently. Now let's turn to the 2024 financial framework on slide 11, which is in line with what I shared on our last earnings call in February. We continue to expect net sales for 2024 of approximately $4 billion, which we think will be a low point as we expect to return to growth in 2025. Sales in the first half of the year are now expected to be approximately $0.3 billion. We continue to expect cost of sales of approximately 35% of product sales for the full year. For R&D, we continue to expect full year expenses to be approximately $4.5 billion, down from $4.8 billion in 2023. For SG&A, we continue to expect full-year expenses to be approximately $1.3 billion, down from $1.5 billion in 2023. And we expect taxes to be negligible in 2024, and capital expenditures in 2024 to be approximately $0.9 billion. Finally, we expect to end 2024 with approximately $9 billion in cash, after touching a low point of approximately $8 billion at the end of Q3 due to the seasonality of collections. Finally, let me also touch on our recently announced project financing deal with Blackstone, which we are excited about. In March, we entered into a development and commercialization funding arrangement, which commits Blackstone to providing us with up to $750 million of funding for our flu program so that we can strengthen the product label and fulfill our remaining regulatory applications. Subject to the regulatory approval in the United States, which depends on data from the funded activities, Blackstone will be entitled to receive up to $750 million in sales milestone payments. These milestone payments are contingent upon achieving specified cumulative net sales targets for our future influenza and combination vaccines. Additionally, Blackstone will earn royalties on applicable net sales at a low single-digit percentage rate. This funding will offset our R&D expenses and is factored into our R&D framework for the year of approximately $4.5 billion. Overall, we are excited that this deal enables us to accelerate the advancement of our pipeline, and with that, I will now hand the call over to Steve. Thank you, Jamie.

Today, I'll review updates from our clinical programs that were shared during our recent Vaccine Day, as well as new developments in our therapeutic portfolio. Starting with respiratory vaccines, we shared updates to many of our respiratory programs at Vaccines Day in March. Our RSV Vaccine Canada is undergoing regulatory review in multiple countries, and pending approval, we expect to launch the product in the United States following the June ACIP meeting and recommendations this year. At Vaccines Day, we shared updates from co-administration studies of RSV, confirming the ability to administer our vaccine and other vaccines given during the respiratory season. With our flu program, We recently presented data from our phase three P303 study at SMID and continued discussions with regulators globally toward the goal of filing this year. For our next generation COVID vaccine, mRNA-1283, we've presented positive phase three safety and immunogenicity data and are engaging with regulators on the path to approval for that product. Our combination flu and COVID vaccine, mRNA-1083, is in Phase 3, and we look forward to sharing those clinical data in the current quarter. Turning now to our latent and other vaccines. As shared at Vaccines Day, we've made significant progress in this portfolio. Our CMV vaccine, mRNA-1647, has fully enrolled in Phase 3 trial, and we have the potential for an interim analysis of efficacy this year. We announced positive phase one immunogenicity and safety data from our EBV vaccine candidate, mRNA-1189, and we are now advancing towards pivotal trials with that program. A second therapeutic EBV candidate, mRNA-1195, is in a separate ongoing phase one study. mRNA-1468, our vaccine against varicella zoster virus, shows strong immunogenicity including strong T-cell responses, and we are preparing to move that program forward towards a pivotal Phase III study as well. And our HSV vaccine against herpes simplex, mRNA-1608, is now fully enrolled in its Phase I-II study, and we look forward to sharing clinical data updates when that's available. Now, rounding out this portfolio, we presented the positive clinical data from our norovirus vaccine candidate, mRNA-1403, and shared that we are advancing that program towards its pivotal Phase III trial. Turning now to oncology therapeutics, we are happy to report our ongoing Phase III studies are enrolling well. We were excited to announce three new INT trials, including a randomized Phase II-III study in neoadjuvant adjuvant cutaneous squamous cell carcinoma, a randomized Phase II trial in adjuvant high-risk muscle-invasive bladder cancer, And lastly, a randomized phase two trial in an adjuvant renal cell carcinoma. Now, recently at AACR, we presented phase one data from our INT program in advanced unresectable HPV negative head and neck cancer in the metastatic setting. At AACR, we also presented phase one translational data from another oncology therapeutic program, mRNA 2752, in various tumor types. Links to both of these presentations are provided on the slide. The final note, at ASCO, we'll be hosting another Moderna oncology event on the evening of June 3rd, and we look forward to seeing you there or having you join us virtually. With that, I'll turn it back over to Stéphane.

Thank you, Stephen and Jamie. Slide 18 is an overview of our COVID-19 strategy for 2024, which is focused on the needs of each region. In the U.S., Our focus is working with public health officials, healthcare providers, and pharmacies to increase vaccination coverage rates. In Europe, we're actively participating in the 2024 tender process. The tender allows for up to $36 million per year for up to four years. And in the rest of the world, we have reoriented our commercial teams to prioritize markets for greater commercial focus and impact. As mentioned earlier, the Brazil contract is an example of how this is working. In April of 2023, U.S. COVID vaccination rates lagged behind flu vaccination rates. U.S. COVID vaccination rates were 11%, with flu vaccination rates at four times that. And yet, COVID continues to show a higher burden of disease. U.S. hospitalizations for COVID between October 2023 And last week, we had 424,000 people, which is markedly higher than hospitalizations from either flu or RSV infection. Actually, COVID hospitalizations were around the same level as hospitalizations of flu plus RSV combined. In addition, long COVID continues to be a serious risk. Too many healthy young adults in their 20s, their 30s, their 40s, are losing lung capacity and their mental capacity due to long COVID. The data shows that COVID-19 vaccines reduce the risk of long COVID by 70%. We believe education and awareness will be very important. We are working on educating consumers about the need for an annual COVID vaccine, just like food. Too many people are getting hurt when we have safe and effective vaccines available. Our job will not stop until these hospitalization numbers come down significantly. As you know, strain selection by health authorities receives approval and launch of COVID vaccines. Health authorities, including the WHO and EMA in Europe, have recently selected the JN.1 strain for the 2024-2025 formula. The FDA will host the VRFAC meeting on May 16 to select a strain for the U.S. market. Modada has already manufactured JN1 drug substance to support the potential August launch. We have also prepared for backups in case the FDA does not select JN.1. In 2023, COVID vaccines were available five weeks later than flu vaccines. In the recent channel alone, More than 3 million flu vaccines were administered before the updated COVID vaccines were available. As we look into the fall 2024 season, we see the potential to align the timing of flu and COVID vaccine approvals. We are encouraged by an earlier VRPAC meeting for this year's COVID trend selection versus last year. And we're working with the FDA and regulators for timely COVID approval. We expect higher vaccination updates if, COVID vaccines are available sooner. Turning now to the anticipated launch of a second respiratory vaccine, or RSV vaccine, which is expected to launch into a large market. In its first year, the older adult RSV market was $2.5 billion in sales, and analysts expect the older adult market to grow between $6 and $8 billion per year. With marketing applications filed in markets globally, we anticipate approval beginning in the first half of 2024. In the U.S., we are targeting a launch after the June ACIP meeting. We are very excited to bring a product with a strong differentiated profile to market. Our vaccine has shown strong efficacy and safety data in clinical trials and will be the only product available in a pre-filled syringe or PFS presentation. Let me now double-click on what we believe are the benefits of PFS. We recently published a time and motion study that showed faster preparation time for PFS relative to vaccines that require a constitution. We call that both RSE competitor vaccines on the market require multiple steps to prepare the vaccines for administration. One vaccine requires four steps and the other nine steps to prepare. Our PFS presentation is ready to use vaccine straight out of the box. The study found that PFS presentation to be three to four times more efficient as measured by preparation time. Details from the study can be found through the link on the slide. We believe our PFS presentation for RLD vaccine has the potential to ease the personal burden on pharmacies during the fall respiratory season. Big pharmacy chain, but also independent pharmacies, and we're looking forward to the launch. Let me close with major upcoming pipeline milestones. While we're excited about the commercial prospects for the year, we're even more excited about the upcoming pipeline milestone and the effect they will have on our commercial outlook for the next several years serving patients. In respiratory vaccines, We are eagerly awaiting the approval of RSV and the ACIP recommendation. We are also waiting for data for RSV in the age group 18 and above. We are in discussion with regulators on the full program and intent to file in 2024. With our next-gen COVID vaccine, mRNA-1283, we are pleased with the positive phase 3 immunogenicity data and are engaging with regulators. Our flu plus COVID vaccine combo should get its Phase 3 data soon. In Latent, with CMV fully enrolled and accruing cases, we look forward to potential for Phase 3 data efficacy data in 2024. In our I&T program, we are looking forward to completion of enrollment for our Phase 3 adjuvant melanoma study. In addition, we are keen to discuss the possibility of accelerated approval with regulators based on Phase II study data. As we shared before, there are three things we view as necessary before we could consider pursuing actual approval for INC. First, durability data from our Phase II study, which we announced in December last year. Second, a substantially enrolled Phase III adjuvant melanoma study. And third, manufacturing readiness at our Marlboro site. And last but not least, our real estate portfolio will look forward to initiating pivotal studies for PMMA. This milestone will represent continued progress towards our mission to deliver the greatest possible impact to people through mRNA medicine. And at Moderna, we are dedicated to achieving them all. Every data continues to confirm the power of our platform and its breadth in the service of patients. Two important save-a-days for your calendars. We will discuss our oncology program in Chicago on June 1st, and our annual R&D day will be held in New York the morning of September 12th. Thank you for listening, and we look forward to taking your questions. Operator?

Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 1-1 on your telephone. If your question has been answered in your cell phone queue, please press star 1-1 again. We'll pause for a moment while we compile our Q&A roster.

Our first question comes from Salveen Richter with Goldman Sachs.

Your line is open.

Good morning. Thanks for taking my questions. Firstly, could you discuss your strategy for pursuing contracts for the RFC vaccine given two approved vaccines that have a head start timing-wise? And help us understand, as you've communicated with large retail pharmacies, how significant the PFS formulation is to them. And then, secondly, with regard to moving into the three new indications for the I&T program. Maybe help us understand signals or specific data points that support that. Thank you.

Good morning. On the I&T contract, so as you know, we're not allowed to contract until the product is approved by the regulators. But what we are doing, because we can do that, is our medical team are actively engaged with the pharmacies, but also ID and hospital networks. in terms of making sure the data on the efficacy profile of a product, on safety, and of course on the PFS and the benefits of PFS in terms of productivity. Those discussions are ongoing literally on a daily basis, including with leadership of those pharmacies. And the next step, of course, is to wait for the FDA approval. Stephen?

Yeah, sure. So thanks for the question. So on the three additional INT indications, I think the short version of it is they are all adjuvant settings, similar to our melanoma. Phase II results have been so encouraging, where Keytruda has a known benefit and where we still believe that there's an opportunity to improve upon that by driving a specific T cell response with INT. And so, as you know, in Phase I, we looked across a range of different indications. That was more in the metastatic setting. But as we've And now, since we first saw that positive phase two results from melanoma, we have been aggressively pursuing adjuvant indications where IO is approved and where we see an opportunity. And all three of these fit squarely in that space.

Thank you. Our next question comes from Michael Yee with Jefferies. Your line is open.

Hey, guys. Thanks. Two questions as well. On RSV2, I guess the competitor of GSK as well this week was commenting about how they are expecting you to be in the mix and contracting is ongoing. I know you have some RSV in your guidance. I think the math implies maybe hundreds of millions of dollars. Can you just perhaps comment on how you adjusted or probability adjusted or thought about how much is there in your guidance, your confidence on that for this year? And then secondly on INC as well, I know you have some data at ASCO. I know you have breakthrough therapy and prime designation. How important is the phase three enrollment progress, the confirmatory study? I feel like that's always an important discussion with FDA. So how important is that progress before you can really engage with FDA? Thank you.

Maybe I'll take the first one. Thanks, Mike, for the question. So as you may know, we haven't guided any specific guidance or number for RSE. In the past, we did break down the $4 billion into three different segments around the U.S. market, the APAs we walked into the year with, and then another category of other COVID sales that didn't have any APAs across the rest of the world. A good example is Brazil that we just signed, as well as RSV. So no specific guidance for RSV from a financial perspective.

And on the question of I&T, I think you nailed it. It's a really important topic in particular right now. as we think about accelerated approval, that we demonstrate the diligence and substantially enroll the confirmatory study. So really all you're waiting for is for that study to mature. It could be several years. We think it's really important. To be fair, we have not consulted with the agency on that yet. As we've said, we're waiting until we've crossed our own threshold and also at this point until we've established the manufacturing facility or outlined a site to them. But we do feel that, as we've said, substantial enrollment demonstrating that essentially all you're waiting for is the readout on that confirmatory study is our obligation before we even want to go forward with that question. We are making great progress this year, and we're optimistic that both that and the facility will be available in short order. And then, of course, we'll want to start engaging with our donors, including the FDA, on the question of accelerated approval.

Got it. Thank you very much.

Our next question comes from Terrence Flynn with Morgan Stanley. Your line is open.

Great. Thanks for taking the question. Maybe two-part for me. Just on the RSV vaccine, can you provide your latest perspective on what the most likely ACIP recommendation will be? Will you get a parity recommendation to the competitors, or do you think there's a potential for a differential recommendation here? And then just wondering, any update on your ongoing conversations regarding filing your seasonal flu vaccine. I know you mentioned in your prepared remarks, but just any more insight in terms of what the gating steps are here. Thank you.

Thanks for both questions. So first on RSV, you know, caveat by saying we have to complete the approval process with FDA, and then at the end of the day, the recommendation really falls to ACIP and the committee members, so defer to them. Our expectation, our hope, is that when they review the data package that we already have, as well as additional data that we expect to be able to share at the ACIP meeting on durability through a second season and on immunogenicity across other populations, we expect a parity recommendation. We certainly think the data supports that. But again, I'll defer to the committee members on the ultimate decisions. On the question of flu, we are actively engaged right now with regulators on the process for submission of the flu vaccine. As I mentioned a moment ago, we are also closing in on clinical data from our combination flu COVID vaccine, mRNA-1083, and that obviously has an important role in our engagement with regulators generally on flu versus flu-COVID combinations. And so those discussions are ongoing. I won't provide any other update on it except to say, as we've said today, and we continue to say, we expect to file the flu product this year, but it will be dependent upon a number of considerations, possibly also including the flu-COVID data that we expect to see soon.

Thank you. Our next question comes from Ellie Murrell with UBS. Your line is open.

Hey, guys. Thanks for taking the question. On CMB, how are you thinking about the need or benefits of potentially boosting, both from a clinical as well as a commercial perspective, and if you would study this? And then second, just on CMB, if you don't meet the interim, the analysis there, would you disclose that? Thanks.

Great, thank you. So, first on the question of boosting. So, so far what we have, we obviously don't have the efficacy readout. That's the phase three studies ongoing. But we do expect to have quite substantial durability data on immunogenicity. And it's quite possible the efficacy data will give us a signal of what the correlates of production could be. And so we don't right now have any evidence they're not good, durable, multi-year, you know, possibly as long as five years or continue tracking in genicity protection. It's possible that'll extend out to 10 years, you know, and then some boosting is necessary. It's also possible that we decide that a booster might be necessary shorter term than that, let's say five years or 10 years. We just don't know at this time. And so, at present, the data we do have on the durability of the immunogenicity, it looks quite strong. And so, we do think a three-dose series will likely be protective for a very long period of time, all subject to the efficacy data that you just referenced. So, on the interim analysis for efficacy, As we've said before, we're making great progress in that study in accruing cases, and we do expect to be able to provide an update on or conduct at least an initial interim efficacy analysis this year. Because of the rate of case accrual and also because the protocol calls for us to cross a median of one-year follow-up, the timing may be such that by the time we get to that first interim analysis, we also have enough cases for a final analysis or that a final analysis is imminent. let's say it's a very short period of time away. And so because of that uncertainty, until we see that data and understand how close we are to that final analysis, I don't think we can commit one way or the other whether we're going to be updating. We really depend upon the data we see and then how quickly we expect to get that final analysis. At the end of the day, if we have news to share both on the interim and the final, we, of course, will. But I don't think we can commit at this stage because we haven't seen the data yet.

Great. Thanks.

Our next question comes from Hartaj Singh with Oppenheimer. Your line is open.

Great. Thank you for the question. I just have a question on, you know, you're developing a refrigerator-stable vaccine and flu vaccine, I believe. And I'd just like to kind of understand how you think about that. When could that get approved? And then will the combo vaccines also be refrigerator-stable? Thank you.

Great. Thank you, Hartaj.

Ladies and gentlemen, please stand by. Your conference will resume momentarily. Once again, ladies and gentlemen, please stay on the line.

And pardon me, can you hear me now?

Could you try speaking again? Your line was muted. Yeah, I'm here. Can you hear me? Yeah, we can hear you now. Your line got muted, but you can go ahead and continue. Great.

Sorry for that brief interruption. So, Hartaj, thank you for the question. Just to quickly restate what I was saying, all of our respiratory portfolio, RSV, flu, COVID and the flu-COVID combo are being developed towards refrigerator-stable PFS. And so our mRNA-1083 program, the flu-COVID program, as well as the flu program, are intended to be refrigerator-stable, pre-filled syringes. As Defond mentioned a moment ago, we really view that as the ideal presentation, the optimal presentation for healthcare providers really around the world to facilitate their delivery of the vaccine to patients.

Great. Thank you. Thanks for the question, Steven.

Thank you. One moment for our next question. Our next question comes from Gina Wang with Barclays. Your line is open.

Thank you for taking my questions. I have two. One is regarding COVID. For the EU, you said up to 36 million doses every year in the EU. What could be the scenario you can get 36 million doses in the EU? And also the price in Brazil and the EU. Should we use pandemic price of $25 to $30 per doses as the benchmark? Quickly on R&T. accelerated approval path. Based on today's comments and the prior discussion, our impression is you could achieve all the three key components by the end of this year. Is Merck also fully on board to submit for the accelerated approval in melanoma?

Thank you, Gina. It's Stefan. I'll take the COVID question and then Stephen will talk about INT. So the tender is up to 36 million doses. It will depend on the number of countries that apply to the tender for the EU. So this will know at the end of the process. And as you know, it's a tender process, so there's no dialogue. We're just ensuring all the files and all the data, and that's really ongoing. The team is obviously very active on it. And on price, for obvious competitive reasons, we're not going to share price. because the company tells them the price right away. Stephen, anything?

Yeah. So we haven't specifically got into when we expect to complete, obviously, the second and third parts of our three-part criteria, that being manufacturing readiness. As you can imagine, work is going on around the clock, as well as the enrollment. We've made great progress, but you have to sustain that progress. On your question of where is Merck on this, I think you'll have to direct it to them. Our view is that if we're able to get to the point where accelerated approval is appropriate and regulators are supportive of that, we can't imagine why ourselves and Merck wouldn't want to make the product available to help people suffering from cancer right now. But the contingencies there are obviously we have to do our work and our diligence this year, and then ultimately we have to speak to regulators and they get to decide whether that pathway is available to us. And so I think for both ourselves and our partner, Merck, we'll want to defer to regulators ultimately on that choice.

Thank you.

Our next question comes from Luca Issi with RBC Capital. Your line is open.

Oh, great. Thanks so much for taking my questions. Maybe a very quick one on RSC. I think the last press release actually cited May 12th as the PDUFA date, while today you're simply saying there's initial regulatory approvals in the first half of 2004. So is there anything to read to it and just confirm that? The PDUFA date is still May 12, which is actually the end of next week. And then maybe second on IP, Kim just commented on the recent decision by Judge Goldberg to rule obviously in favor of Arbutus or they're lipping on a particle. Our understanding, this can have a pretty material impact on both prior and future sales of COVID. So again, any thoughts there, much appreciated. And then super quickly on IMT, Steve, What's holding you back on starting a randomized trial intended at cancer in the metastatic settings? I thought the data they see out was pretty impressive. So, any thoughts there? Much appreciated. Thanks so much.

Great. Thank you for this question. I'll take this from the third very quickly. So, on the question of RSV, we continue working towards the same , and there's not a change to that. As you know, there's a lot of work and around the clock work by ourselves, obviously, and folks at the agency, and so we're hopeful that that happens as planned, but if it takes a little bit longer, at the end of the day, what really matters is the June ACIP meeting, but there's been no change to report, so don't read anything into that. As far as the INT question, you know, on head and neck, I appreciate the question, We are also obviously enthusiastic about that data. However, our partner Merck and ourselves, we have not yet decided where that sits in the priority of other indications, technologies, and opportunities we're pursuing. As you've already seen in the past year, we've stood up a very large number of studies, and we're just trying to pace ourselves. And so it will take us a little bit of time with our partner Merck to determine what the next steps are in head and neck, and at this point we do not have an update on it.

Thank you, and I'll take the IP questions. I mean, as you know, our COVID-19 vaccine technology, including our lipid nanoparticle delivery system, is a result of independent research and development. We have a strong belief that our technology does not influence on the patents asserted by arbiters. We are confident in our position, and we look forward to presenting our case at trial next year.

Thank you. Sorry, our next question comes from Jessica Faye with JP Morgan. Your line is open.

Hey, guys. Good morning. Thanks for taking my questions. I had a few here. So for INT, I know you mentioned you can't comment on when you expect a complete manufacturing scale-up, but can you provide a status update on where you stand with that today and the number of patients you can support right now, as well as where you want to take that capacity once you get to the end of this three-phase scale-up process even if you don't put a timeline on when you'll get there. Next one is coming back to flu. Can you just refine a little bit when the 1083 immunogenicity data will be available and maybe elaborate on how the combo data play a role in the regulatory talks on 1010? I thought you previously said these products could stand on their own and that you might not need 1010 approved to get 1083 approval. Now wondering kind of why 1083 might factor in for 1010. And then lastly, on CMV, can you remind me how the risk of CMV in pregnancy compares in seropositive versus seronegative individuals? I'm thinking from a commercial standpoint, how you weigh the strategy of personally vaccinating everyone versus just seronegative people. Thanks.

Great. Thank you for the questions. I'll start with the INC question on manufacturing and efficacy. So, we have not provided the capacity numbers for the factory in Marlborough, but of course, as you can assume, we know the size of the melanoma market, and we know how strong the data are. We've run into people benefiting from the Phase II data. So, we've sized the plant accordingly, as you can imagine. Also, we are building the plant for scale, because as you know, Stephen and his team and the Merck colleagues are running a lot of studies. So, this is not a plant for melanoma. This is a plant for INT. Again, from a manufacturing standpoint, we don't care which cancer is in terms of organ because we use genetic information to design an individualized product for every human being. So basically, we bought a plant last year that was kind of a big building finished to save us time to market. Obviously, we don't have to get the permitting and build the building. And so the team since then, that is now more than a year ago, has been working actively to get the plant ready. And the plant is going to be built in modules inside the building. So basically, we're going to launch with the first module of manufacturing capacity, and then And one day, maybe we'll do an opening of a facility like we did for Norwood. You will see there's a lot of empty space left behind, which allows for a very quick ramp up because the HVAC system and all the utility system has been set up for the entire plant. And so then you just add modules as you go. So we'll have the ability to scale very quickly as we get more indication available. But again, we are aware of melanoma. number of cases, and so the plans will be sized so we make sure we can provide products to patients.

Stephen? Great. Thank you for the clarifying question on flu. So let me just start by saying that independently, we are looking to submit both the flu program and the flu-COVID combo program, so that's 10-10. The question on the timing of that data, it's imminent, and so in the coming quarter, we expect to be able to share that update. The point about interdependency, I suppose, is just more about sequencing of those submissions, and in some places, in some regulatory geographies, obviously, you can't stack them on the same day, if you will. There's a logical sequence, and what we'll want to assess once we see the 10 to 3 data is our regulatory strategy, as well as our preparation and delivery of data for the submissions to determine which one will go first or second. But at this point, we're trying hard to make sure that we can do both products across all of our major markets if the data is positive this year. And so, more on that as we move forward. But for now, we are proceeding independently. Sorry if I've got any confusion about that. On the question of CMV and seropositivity, so it's a really important point. Thank you for raising it. But while the majority, while the risk of vertical transmission of CMV to pregnancy, to the fetus, is highest in seronegatives, it does happen in seropositives as well. So congenital CMV is a disease that's seen in particularly in reactivation or sometimes reinfection even in the seropositive context. And so we do believe that there's a potential for benefit for a vaccine even in the seropositive population. We are evaluating the study right now in the seronegatives because the rate of that transmission and obviously the potential to prevent against infection is more enriched and therefore the study science primary are focused on the seronegatives. But we are looking, we have studied the vaccine from a safety perspective in seropositives And we are looking at things like shedding. And if you draw a little bit of an analogy to or correlate to the EVV data that we've already put out there in a different virus, but we've been able to show that we can really control the rate of shedding, even in seropositive, basically the Epstein-Barr virus. And so we have some reasons for optimism, at least that When we pull together the totality of the data, there will both be the obvious potential benefit, which is that there is still vertical transmission and seropositive, and potentially some data on the rates of shedding that would be supportive to that. Ultimately, though, we're studying all the way down to 16-year-olds, and our goal will be a label that's 16-plus with the goal of going into a population that is not as highly seropositive as it is later in life, and therefore we see a very large

Our next question comes from Jeff Meacham with V of A. Your line is open.

Hi, this is Alex Hammond. I'm for Jeff Meacham. Thanks for taking our questions. So on your Zooster vaccine candidate, when should we receive updates on your pivotal strategy? And is there any color you can provide today in terms of your current thinking on the phase three design? And then our second question is, on the PA and MMA programs that are advancing into pivotal trials, can you provide any thoughts on the Nature editorial and the comments on safety? Thank you.

Yeah. Could you describe the first part of the question was on which program, the booster?

The Zooster, the shingles.

Oh, shingles booster. Thank you. So on the VDD program, We have, we're obviously very excited by the phase one data, which was compared against the licensed product, and we saw really strong T cell responses and genicity. And generally, we've been seeing that across our programs, but in that one, it was very encouraging. We're in the process right now of trying to find a pivotal strategy that will include, obviously, dose selection, the number of doses in that study, and how we're going to conduct that study. We do not have an update today on what that will look like. In addition to our own thoughts on it, we'll obviously want to consult with regular risk before we finalize that final report, but we are moving towards a pivotal study in BCV. We do not have a timing on that update yet. As it relates to MMA and PA, the clinical data that we have continues to show a compelling benefit-risk profile, good safety profile. In fact, in the PA studies, we have many folks who've been in those studies on drugs for well over a year and over 30 years, I think, for last update in overall patient dosing experience. So we are starting to get very clear perspective on the safety profile. The editorial question, I don't have a view on editorials or opinions, you know, based on the preclinical data. I think we stand behind the clinical data that we have and are quite encouraged by that profile. And we'll continue to watch it closely in our ongoing phase one studies. But we do not have any specific or new concerns based on the clinical data today.

Thanks. Our next question comes from Evan Wang with Guggenheim Securities. Your line is open. One moment.

Question. Two from me. First, on the Combo 1083 program, so data sounds like this quarter. I believe enrollment was completed a few months ago, so I guess how comprehensive would the top line update be in terms of follow-up? And then with submission, is longer-term fault needed there, and are there parallels from 1010 that we can take in terms of regulatory filing speed for 1083, or is that more impacted by the decision for filing one or the other first? And then second, on RSV, you know, it's kind of early ahead of approval, but with some international markets, it seems that's more nascent in terms of establishing some reimbursement there. So, I guess, how are you thinking about positioning internationally? Thanks.

Great. Thank you. So, for the 1083 data, yes, on this quarter, and I would say that we're We enrolled the majority of the 1083 studies, you know, last fall. And the 1010 second generation study, so we've talked about the P303 study, the first part of that enrolled over last summer, just a few months before the combo study. And the second part of it, there was a part B and C, as you know, looking at head-to-head against Luzon HD, that actually enrolled the same time as the 1083 study, so last fall. And so they've been actually kind of tracking right on top of each other. I think we're going to wait to see the data before we can provide real guidance on timing. But obviously, we've been working towards that flu-COVID combination product for a while, and we will want to make sure that we get that file, if it is positive, as fast as possible. I wouldn't draw too many, because the difference in the structures of the study between the P303 study, which had a Part A and a B and C, And the 10-3 study, which was done very quickly, I wouldn't draw too many correlations between reading out and the family for submission on either one. Stéphane, do you want to take the RSV question?

Sure. So the international market is obviously very important. The U.S. is very important, but the U.S. international is also super important. As we shared before, we found in all the major geographies already, you know, of course, EU, UK, Canada, Australia, you know, some countries in Asia, some countries in the Middle East, RSV is well-known by public health leaders like it is in the U.S. So I think that there's a very strong desire, again, to protect the elderly, like what we are doing here in terms of through COVID RSV, that's becoming really kind of a standard that public health leaders, health ministers across at least the developed world, but even in developing countries, there's more and more interest, as you see aging population everywhere. It's only the U.S. approval that we expect coming soon. We have several geographies that will stop being approved soon.

Thank you. Our next question comes from Simon Baker with Redburn Atlantic. Your line is open.

Thank you for taking my questions. Two quick ones, if I may. Just in terms of the timing on the CMV interim data, You said this quarter it could be as early as the end of 24. That sounds slightly later than you'd previously said. I just wondered if that's me over-interpreting the semantics or whether there is a slight delay there. And then the second question is on the HSV vaccine. Previous quarters, we talked about the EBV vaccine and the potential utility vaccine. in multiple sclerosis. I just wondered what your thoughts were about HSV and the hypothesis that implicates its role in Alzheimer's disease. Thanks so much.

Thank you for both questions. So first on the clarification, there's no change to our expectations on when the CMV readout will happen. I think we previously tried to, you know, be careful in saying that we expect it to happen this year. And so, obviously, by the end of this year, it's meant to say the same thing. But there's no change in our expectations at this point. On the HSV Alzheimer's hypothesis, it's a very interesting, you know, there's a lot of neuroinflammatory questions that go with a herpes simplex infection across a range of different indications. Alzheimer's is one of them. At this point, the studies that we expect to move forward with HSV will be for seropositives to improve outcomes, so shedding days, for instance, or lesion days. And then eventually, we will want to consider whether we want to go at prevention of infection, which is obviously a different standard, a different indication. that might be more relevant for then how you think about some of the neuroinflammatory or long-term sick law. I think you asked my opinion on the science. I think it's incredibly interesting and exciting. I do think it's early for us to start drawing connection from a vaccine perspective in terms of our potential impact for it. You know, I hope over time there is an opportunity to intervene in things like that. Obviously, in the EBV vaccine with multiple sclerosis, that science has firmed up to the point where there's reasonably high conviction that there's a potential for benefit there. We have to go prove that. But at this point, it's still earlier days, I think, with HSE and Alzheimer's.

Great. Thanks so much. Our next question comes from Edward Tunoff of Piper Stanley. Your line is open.

Great. Thank you very much for taking the question and congrats on everything. Actually, most of my questions have been answered. But I wanted to ask with respect to the cancer efforts, you know, are you able to break out what the actual R&D cost is for that program? And that's still a cost and profit share with Mark. And how many indications do you guys ultimately plan on pursuing? Thank you so much.

Maybe I'll take the first one, Ted. So we obviously know what we're spending, but it's not something that at this point that we are prepared to dispose. So maybe someday, but not at this point.

Understood. With the expansion, yeah. Yeah, on the expansion indication, look, it's a joint decision. Our partnership with Mark has been really strong. We've been building this out. We do like to review those strategically and then bring them forward once we've started them. And so I don't want to get ahead of that because those are our private strategic competitions. But we are not done yet. We will keep adding in the years ahead.

Very exciting. Look forward to seeing you in Chicago.

Ladies and gentlemen, that concludes the Q&A portion of today's conference. I'd like to turn it back over to Stefan for any closing remarks.

Well, thank you everybody for joining in today and for the great questions. We look forward to seeing you at the latest at ASCO. Have a great day.

Well, ladies and gentlemen, so that concludes today's presentation. You may now disconnect and have a wonderful day.