Moderna, Inc.

Good day and thank you for standing by. Welcome to the Moderna First Quarter 2025 Conference Call. At this time, all participants are in 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today. Lavina Tlukdar, Head of Investor Relations at Moderna. 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 2025 financial results and business updates. You can access the press release issued this morning, as well as the slides that we will be reviewing by going to the investor section of our website. On today's call are Sivan Bansal, our Chief Executive Officer, Stephen Hogue, our President, 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 now turn the call over to Stephane.

Thank you, Lavina. Good morning or good afternoon, everyone. Thank you for joining us today. I will start with a review of our business in Q1. Jimmy will present our financial results and our outlook. Stephen will review our clinical programs, and I will come back to Shaquille priorities and catalysts before we take your questions. Let me start with a review of our financials. Our Q1 revenues were $0.1 billion and a loss of $1 billion. These were in line with our expectations and reflect the highly seasonal nature of our respiratory vaccine business. We ended the quarter with $8.4 billion in cash and investments. As you are aware, we are focused on financial discipline. I'm pleased to announce that continued cost reduction efforts in the first quarter of 2025 led to a 90% reduction of cost of sales, R&D, ESG&D combined compared to the first quarter of 2024. I would like to thank our team for their great work. During the quarter, we made solid progress against some three priorities. Priority number one, expanding markets for commercial products. Earlier this year, we were awarded a tender opportunity allowing us to compete for COVID-19 business in Europe. Additionally, during the quarter, EmRatSVR received approvals in Australia, in Taiwan, and in the UK, and most recently, in Switzerland. This is in addition to approvals we received in 2024 in the US, EU, and Canada. Our second priority, advancing our pipeline to direct sales growth and diversification. I'm excited to announce the expansion of our oncology portfolio with CheckPoint Medicine, which Steven will review later. For phase three flu program, where we have exceeded the required number of case accruals to run an interim vaccine efficacy analysis. We also presented encouraging data from other key programs including RSV, CMV, and INC at Swiss Health Medical Conferences. We are pleased to share that INC will now be known by the IM, or International No Proposal Name, of intense MIRAN, auto genes. This designation reflects the growing maturity of a product development program, and marks an important milestone as we continue addressing some of our potential regulatory approvals. And finally, on our third priority, executing with financial discipline. The first quarter of 2025 marks the third consecutive quarter where we reduced combined R&D, health, SG&A expenses by double digit year over year. With

that, let me turn to Steven. Thanks, Yvonne, and welcome everyone. Today I'll cover our first quarter financial results, our full year outlook, and an updated operating cost framework as we look ahead to 2026 and 2027. Let's start with our first quarter financial results shown on slide seven. Net product sales were $86 million, driven primarily by COVID vaccine sales. The US accounted for about one third of total sales, with the remainder from international markets. This result was in line with expectations, given the seasonal nature of respiratory vaccines, with most sales anticipated in the second half of the year. We observed lower vaccination rates compared to Q1 last year, reflecting the continued transition of COVID into routine seasonal vaccination patterns. In addition to product sales, we recorded $22 million of other revenue, bringing total revenue for the quarter to $108 million, a decrease of 35% year over year, but in line with expectations. Cost of sales for the quarter was $90 million, compared to the first quarter of 2024, cost of sales decreased $6 million, primarily due to lower sales volume. While total cost of sales declined year over year, it represented 104% of net product sales this quarter, up from 58% in the prior year, driven by lower volume and revenue mix. R&D expenses were $856 million, a 19% decrease year over year. The decline was mainly driven by lower clinical development spend across our respiratory programs, reflecting the timing of trial activity and the wind down of certain studies. This was partially offset by continued investment in our norovirus program and oncology. SC&A expenses were $212 million, down 23% year over year. The decrease was driven by broad-based cost reductions. These reductions reflect our continued focus on streamlining operations and managing costs across the organization. We recognize an income tax provision of $7 million in the first quarter, similar to the prior year, but the provision was not material due to the continued valuation allowance on our global deferred tax assets, which limits our ability to recognize tax benefits from the loss. Net loss for the quarter was $1 billion, a $204 million improvement compared to a $1.2 billion loss in the first quarter of 2024. Loss per share was $2.52, an improvement from a loss of $3.07 in the prior year period. We ended the quarter with cash, cash equivalents, and investments totaling $8.4 billion, compared to $9.5 billion at the end of Q4. The decrease was primarily driven by the operating loss for the quarter. Now let's turn to our financial framework for 2025 on slide eight. Our expectations for the full year 2025 remain unchanged from our initial guidance in February. We still expect total revenue in 2025 to be in the range of $1.5 to $2.5 billion, with first half sales of approximately $0.2 billion, reflecting the seasonality of our respiratory vaccine business. As a reminder, the wide range of our guidance reflects the uncertainties in vaccination rates, the competitive market environment, the size of the RSV market, and timing of licensure of our factories and product approvals in Australia, Canada, and the UK. As previously shared, while we filed three products with the FDA in 2024, since we don't know the timing of potential approvals, we are not including any new product revenue in our guidance range. Cost of sales is projected to be approximately $1.2 billion, reflecting continued improvements in manufacturing efficiency and lower expected inventory write-offs, offset by increased costs associated with the go-live of our new manufacturing sites in Australia, Canada, and the UK. I'll now provide some perspective on the newly-increased global tariffs. Those in action as of today have not had a significant direct impact on Moderna. All of our drug substance for the US market is manufactured at our facilities in Massachusetts. Our commercial drug substance has been shipped overseas for fill-finish operations before shipment to the final customers. Internationally, our new plants in Australia, Canada, and the UK are expected to be online in 2025 to supply local markets. Finally, materials sourced from China are not material to our total cost base. R&D expenses are anticipated to be approximately $4.1 billion as we continue to invest in our late-stage pipeline while maintaining financial discipline. SG&A expenses are expected to be approximately $1.1 billion, reflecting a continued focus on efficiency while supporting our commercial execution. While we are pleased with the cost reductions that we achieved in both R&D and SG&A during the first quarter of 2025, it is still early in the year, and we are not updating our full-year expense guidance at this time. That being said, it is a strong start to the year, and we are looking to accelerate additional cost reductions in 2025. We expect taxes to be negligible in 2025, and capital expenditures are projected to be approximately $400 million. And we still expect to end 2025 with approximately $6 billion in cash and investments. Beyond 2025, we are announcing today our plan to drive an additional $1.4 to $1.7 billion of cost reductions by 2027 as part of our commitment to achieve our 2028 breakeven target on a cash cost basis. To that end, we are reducing our 2026 gap operating expense forecast from $5.9 billion to a range of $5.4 to $5.7 billion. This guidance includes $0.9 billion of non-cash charges from stock-based compensation, depreciation, and amortization. Excluding these items, we now project a 2026 cash cost of approximately $4.7 billion at the midpoint of the range. We are also planning to reduce 2027 gap expenses to between $4.7 and $5 billion, with a 2027 cash cost of approximately $4.2 billion at the midpoint of the range, excluding stock-based compensation, depreciation, and amortization. Stepping back from 2023 to 2027, we are planning a total reduction in annual gap expenses of over $6 billion, which represents a 55% reduction over four years, from $11 billion annually in 2023 to $5 billion or less in 2027. The first $4 billion of gap expense reductions were realized in 2024, with the largest driver coming from reductions in our cost of sales. When we undertook a strategic initiative in the second half of 2023 to restructure our manufacturing footprint, to better optimize for endemic-level demand of our COVID vaccine. We also reduced SG&A by 24% from 2023 to 2024, through a variety of cost-out initiatives throughout the company, and R&D declined 6% year over year to $4.5 billion in 2024. While we are continuing to drive additional cost reductions and efficiency gains in both cost of sales and SG&A, the largest future source of cost reductions will come from R&D, which currently represents nearly two-thirds of our expense base. This projected decline in R&D expense will come from the completion and wind down of our ongoing phase three trials, procurement savings from contract renegotiations, and other process efficiencies. In summary, we are encouraged by the progress we've made in our cost-out initiatives today. As Stefan mentioned, we now have had three consecutive quarters of double-digit year over year declines in combined R&D and SG&A expenses. Our teams continue to identify and act on new savings opportunities, which gives us the confidence in meeting our new 2026 and 2027 cost targets. With that, I will now turn the call over to Stephen.

Thank you, Jamie. Good morning or good afternoon, everyone. Today, I will review progress across our pipeline. Slide 11 is a review of our prioritized pipeline, which is introduced at our R&D day last September. As you know, we have since filed for regulatory approvals for three of these programs, our next-generation COVID vaccine, mRNA-1283, our RFC vaccine for high-risk adults aged 18 to 59, mRNA-1345, and our flu plus COVID combination vaccine for individuals aged 50 and over, or mRNA-1083. As part of our ongoing portfolio optimization, we've made a strategic decision to deprioritize the flu-COVID combination vaccine for younger adults, those aged 18 to 49. While we remain committed to the long-term potential of combination respiratory vaccines, we are gonna be focusing our efforts on combination vaccines in the older adult population for now. At the same time, we are excited to announce the advancement of our oncology pipeline with the addition of the Checkpoint Program. The prioritization of this phase two program is based on early but encouraging data, and it's consistent with our strategy to build our therapeutics pipeline, particularly in oncology. We are targeting filings for Checkpoint and the other six programs on the right-hand side of this slide by 2028, subject as always to data and regulatory consultations. Moving to slide 13, which outlines the latest developments in our late-stage respiratory portfolio. As I just mentioned, we submitted regulatory filings for three programs. Our next-gen COVID vaccine has a PDUFA date of May 31st. The age group expansion for our RSV vaccine has a PDUFA date of June 12th, and we look forward to decisions on both products in the coming months. For our flu-COVID combination vaccine, we received a November 2025 PDUFA date. However, following feedback from the FDA during the review, the flu vaccine efficacy data will now be needed to support the application. As a result, we now expect the review timeline to be extended into 2026 and be dependent upon positive phase III efficacy results from our ongoing flu vaccine trial and the addition of these data to the submission. And on that point, our standalone flu vaccine candidate, mRNA-1010, is in its phase III efficacy study, and due to the intensity of the current flu season, has now exceeded the required number of cases to support the interim efficacy analysis, which we expect to complete now by this summer. Now turning to our non-respiratory vaccine and rare disease portfolio. For our CMV vaccine, we recently presented durability data from our phase II study at the ESMINT conference, demonstrating that mRNA-1647 continues to elicit robust antibody responses for three years post-vaccination, showing very strong durability. We also had the opportunity to share these findings, along with an overview of our CMV program, at the inaugural CMV Vaccines Workgroup as a part of the April ACIP meetings. We're encouraged by the establishment of this workgroup, which reflects the growing recognition of CMV as a significant public health concern and a commitment to reducing the disease burden of CMV. Our phase III CMV efficacy study for mRNA-1647 continues to accrue cases. We remain blinded to the study results at this time and expect a final efficacy analysis to come later this year. For norovirus, we are pleased to note that the FDA clinical hold for our phase III trial was lifted during the quarter. The study is fully enrolled in the Northern Hemisphere, and we are continuing to enroll in the Southern Hemisphere. The phase III efficacy readout for norovirus is dependent upon case accruals, and given the uncertainty of that timing, the targeted approval could be in 2026 or 2027, depending upon that readout. We expect to have more clarity on the pace of case accrual and potential readout timing later this year. In rare diseases, our Proprionic Acidemia, or PA program, is currently in a registrational study. We've made good progress with regulators and with enrollment. Following review of program timelines and other aspects of the launch, we now anticipate a 2027 approval. Similarly, for Methylmalonic Acidemia, or MMA, we've finalized the registrational study design with the FDA, and we plan to initiate that trial in 2025. We expect the potential for approval for MMA in 2028. We continue to advance our oncology portfolio with significant progress across our individualized neoantigen theory program, Intismarin, our Checkpoint program, and our early stage oncology programs. In collaboration with Merck, we have several late stage studies underway for Intismarin. As a reminder, the phase III trial in adjuvant melanoma is now fully enrolled. We also have two phase III studies in non-small cell lung cancer, both evaluating Intismarin in combination with Keytruda in patients with and without prior neoadjuvant treatment. Additionally, we're conducting randomized phase II trials in adjuvant high-risk muscle-invasive bladder cancer and adjuvant renal cell carcinoma. I'm happy to announce that the phase II adjuvant renal cell carcinoma study is now also fully enrolled. We're also expanding the scope of our Intismarin program into earlier stages of disease, with the addition of a new phase II study that moves beyond the adjuvant setting. This study evaluates Intismarin as monotherapy or in combination with BCG, the standard of care, in high-risk non-muscle invasive bladder cancer and will help us explore Intismarin's potential in earlier disease settings beyond the adjuvant landscape. As I mentioned a moment ago, we have prioritized advancement of our Checkpoint program based on encouraging early clinical results. The program is currently being evaluated in a phase II study for both first-line metastatic melanoma and first-line metastatic non-small cell lung cancer. I'll review the details of that program on the next slide. We're also advancing two novel cancer antigen therapies to the clinic. mRNA-4106 is a tumor-targeted antigen therapy designed to direct the immune system against multiple shared tumor antigens. The first patient has been dosed in a phase I study in solid tumors that is assessing safety, pharmacodynamics, immunogenicity, and preliminary efficacy for the program. And we have an open IND for mRNA-4203, which is designed to boost the activity of an engineered T-cell therapy to improve its persistence and effectiveness. This program is being developed in collaboration with Ematics. These cancer antigen therapies, Checkpoint, mRNA-4106, and mRNA-4203, are -the-shelf therapies, in contrast with intismarin, which is an individualized cancer treatment. These programs reflect our growing oncology pipeline, with more coming soon. Now, let me provide an overview of the Checkpoint program, mRNA-4359, starting with its mechanism of action. Checkpoint is designed to help a patient's immune system recognize and attack tumor cells by encoding mRNA-based cancer antigens for PD-L1 and IDO. The therapy trains the immune system to recognize upregulation of PD-L1 and IDO by cancer cells and immunosuppressive regulatory T-cells. By combining this targeted immune activation therapy with Checkpoint inhibition, with traditional antibodies such as Keytruda, we aim to enhance the anti-tumor response, overcoming immunovation, and improving the depth and durability of responses. Checkpoint is being evaluated in a phase one-two clinical study, which is now moving forward and enrolling the phase two portion. This study is designed to assess the safety and tolerability of Checkpoint, both as a monotherapy and in combination with Keytruda, in first line metastatic non-small cell lung cancer and first line metastatic melanoma. Key efficacy endpoints will include objective response rate, disease control rate, duration of response, and progression-free survival. It is an open-label study. In addition to clinical outcomes, we are evaluating T-cell profile changes, both in the peripheral blood and within the tumor microenvironment to better understand mRNA-4359's mechanism of action. We shared early phase one A data at the ESMO Medical Congress in late 2024, and we're excited and looking forward to sharing the data from the phase one B portion of the study at a medical conference later this year. Based on the early encouraging results, we plan to expand Checkpoint into multiple additional cancer indications. With that review, I will now hand it over to Stephane.

Thank you, Stephen and Jamie. We are focused on three priorities. Priority one, to drive sales of approved products. Priority two, to focus on our late-stage pipeline to drive sales growth and diversification. Priority three, to deliver cost efficiency across the entire business. Our first priority is to drive user spine backs and MSVR vaccines. We enter 2025 with two approved products, which puts us in the better competitive position compared to the beginning of 2024. With our ability to now offer RSV for the full season, we expect to better compete in the respiratory vaccine market. And our recent international MSVR approval should add to sales this year. Priority two, we are focused on delivering up to 10 product approvals, which we believe will drive sales growth. Together, these 10 anticipated product target a total interest-able market of over $30 billion. As Stephen discussed earlier, we have taken some of our priority programs. For the combination of full-post COVID, in age 50 and older, we expect the additional standard of full vaccine efficacy data, coming soon, for combo filing will extend the review and approval timeline to 2026. For norovirus, the program timing is dependent on case accrual, which will mean a potential 2026 or 2027 approval. We are very pleased with the addition of Checkpoint AMC to our new prioritized by-plank, MRN-4359. And finally, for PNMMA, we anticipate approvals in 2027 and 2028, respectively. Priority three, drive cost efficiency across the entire business. We've demonstrated our commitment to core discipline for reduction achieved in 2024 and 2025 to date. We remain confident in our ability to further streamline our operating structure for the remaining of 2025 through 2027. We are pleased to announce today, the 2027 cash cost target of $4.2 billion, giving us additional confidence in achieving our cash breakeven target in 2028. For 10-promoters program, we expect important milestones. We fight for approval for free products in 2024 on next-gen COVID among the 20-free, or IV vaccine for high-risk 18 to -year-olds. We look forward to regulatory decisions on this. For flu plus COVID combination vaccine, we expect an extended review timeline, planning positive, standalone flu efficacy data and submission. We're targeting a 2026 approval. For CMV, we look forward to having the final results of phase three vaccine efficacy study in 2025. We've exceeded the case accrual goals for flu efficacy study and expect a result by this summer. On-orvirus vaccine is in phase three and the timing of the data without will be subject to case accrual. In oncology, the results of ongoing in this MERS phase three adjuvant melanoma trial will be subject to event accruals. And we expect to present a phase two five-year durability data in adjuvant melanoma next year. As mentioned before, we are very excited by the addition of a checkpoint empty so prioritize portfolio and we look forward to sharing data at the medical meeting later this year. For PA, we are already generating data for a registration study and we expect to start a registration study for MMA this year. I am very thankful to our team for our progress achieved so far across commercial organizations on this pipeline and the great cost reduction efforts across the company. With this, we'll be happy to take your questions.

Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered and you wish to move yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Salbeen Richter of Goldman Sachs, your line is open.

Thank you, good morning. You noted that based on FDA feedback confirming the need for phase three flu efficacy data, you now expect an extended review timeline in your targeting approval in 2026. Could you comment any further on your interactions with the FDA and why they decided to require this and more broadly, just to the potential risk to the vaccine business outlook under the new administration? Thank you.

Thank you, Salbeen, for the question. So first on the narrow question of the flu study, we have moved forward very quickly in enrolling cases as the FDA and everybody is now aware, and actually in that flu efficacy study, which we originally thought might be a two season efficacy study, we now know that very shortly here, we will have a readout with a very large number of cases in a 40,000 person study. And since that will speak to the potential value of our flu component, it makes good scientific sense that that would be a part of the review that's going on for our flu COVID combination. I'll remind you, we had already demonstrated efficacy for the COVID component, and really now we're almost sitting on top of that flu efficacy component. So for a whole bunch of, I think, quite reasonable scientific reasons, it makes sense that we review that as a part of the combination vaccine study. The implication of that is we'll have to complete that review, obviously, hopefully see a positive result, and then submit it to the current VLA for the mRNA-1093 program. That will inevitably lead to some form of clock stop and extension of the review timelines. And so we're excited to see those results in flu. We think they will, we hope they will be constructive for the flu COVID program and look forward to submitting them, sharing those results first, and then submitting them once we have them. As far as more broadly, question about our interactions with the FDA across multiple submissions, those continue, business as usual from our side. We continue to have productive exchanges across all of our ongoing file reviews. That includes our 1283 program, the RSV program. We continue to be engaged in anticipating seasonal program, seasonal composition update for this coming fall. And then obviously I've just spoken to what's happening in the flu COVID combination space. So from our perspective, we are grateful for the ongoing collaboration work, and we'll continue to make sure that we provide all the data required to conduct a diligent review of all of our products in our portfolio. More broadly, I get the question of outlook, and I invite others to sort of add if I miss anything, but we continue to see an opportunity, a real need for COVID vaccination, particularly this coming fall. And we'll remind that through this winter season, we still saw thousands of deaths in the United States, actually about a thousand deaths a week during the peak winter months from COVID-19. The overwhelming majority of which were from folks who had not been vaccinated, but were older Americans and had risk factors. And we do believe that vaccines have a unique opportunity to prevent those deaths, those hospitalizations. There was actually a publication out of Denmark just this week showing that this past year, our updated vaccine composition was 96% effective at preventing death, 85% effective at preventing hospitalization this year. And so we do believe that there is a need, and we believe there's an opportunity with vaccines to play an important role in public health. Ultimately, people need to make their own decisions about that. So our focus right now is making sure that those products, our products are available for Americans and in markets around the world for

the coming fall COVID season. Thank you, one moment for our next question.

Our next question comes from Elena Merle with UBS. Your line is open.

This is Jasmine on for LA. Thanks so much for taking our question. So what's the latest on your thinking whether seeing the INT phase three data in 2026 is still a reasonable expectation? I'm wondering what your plans are for new trials, expansions and other indications for both INT and the newly prioritized checkpoint. Thank you.

Sure, thank you for the question. So first I'll remind you that the phase three melanoma study, it reached its target enrollment in September of 2024, last year we announced that. Given the historical event rates, that would lead us to expect that we would have accrued enough events for at least the first analysis of efficacy in 2026. And so we are still ultimately waiting for events and it will be event driven, whether that analysis happens. But based on our prior experiences, both in phase two B and the other expectations, we still believe that 26 readout is possible and it's not likely. For other indications, we haven't provided updates, obviously for the non-small cell lung cancer study. We're really pleased with that enrollment, but we haven't provided a specific update on timeline there. And for the phase two studies, we did, as you noted, recognize that we've now fully enrolled the randomized study in renal cell carcinoma, which is exciting because that randomized study has a chance of a readout. We have not, with our partner Merck, guided on when we expect that will be, but I will note that events do accrue relatively quickly in that indication in that population. So we'll look forward to that. We will continue to look to expand, perhaps, into monotherapy spaces. Both ourselves and Merck have indicated that and we have an instance of that that we're bringing forward today. There will hopefully be others, but I will defer from commenting on them until we and Merck are ready to announce that we've started those efforts. On the question of checkpoint, we are obviously encouraged, we would like, we look forward to sharing the data that's the basis of that encouragement at an upcoming medical meeting because we've been looking at that program very carefully in its phase one B portion of the study, which, I'll remind you, is a combination with antibody checkpoints to see whether or not we can see a synergistic effect. And we're currently moving forward in at least two histologies that we've talked about today, so that first line, nalc-nalcolin cancer and the first line metastatic indication. Obviously, we have also been looking at it in second line indications as a part of that phase one program and we'll continue to do so. We will add additional histologies in the future, but we're not ready to announce any today.

Thank you. One moment for our next question. Our next question comes from Tyler Van Vierden with TD Cowan, your line is open.

Hey guys, thanks very much for all the updates. At the risk of being repetitive here, and just to be clear and more specific, given how close we are to the PDUFA, it's business as usual for the 1283 review. Can you talk about just how interactions are going for that program and what your confidence is in approval given the new leadership and recent denial of the Novavax program?

Yeah, I mean, obviously I can't

kind of comment on others' programs because I'm not familiar with what's going on there, but in those confidential exchanges, but I can speak to ours, which is, it really has been business as usual. There are lots of exchanges of scientific information. We really view it as our responsibility to provide high quality data to all of our regulators, including the FDA, so that they can conduct their assessments. To date, those assessments have, we believe, been constructive and positive, and we have seen no signs that there's any question about our ability to make the existing PDUFA date. Now, again, review's ongoing, and we have to defer to what questions may come from the FDA or others as we move forward, but it really has felt like business

as usual. Thank you. One moment for our next question.

Our next question comes from Michael Yeeva. Jeffery, your line is open.

Hi, thanks. This is Dina Ahn from Mike. Just a quick question about a recent media article that came out yesterday regarding how vaccine trials would be run that they would now require to be run against a placebo. Just wanted to get your thoughts about that. What do you think that will do to enrollment? Will it be harder to enroll, easier? And is that going to be required, do you think, for all respiratory vaccines, specifically COVID, for you guys, or just newer vaccines, such as CMV or any others that you're working on in the product line? Thanks.

Thank you for the question. So, obviously, I can't comment on a policy change that either hasn't happened or that we, you know, we haven't been communicated directly to us. I will note that, as you did, our COVID vaccine, our RSV vaccine, our CMV vaccine, our norovirus vaccine, these are all conducted as placebo-controlled studies. And for many of the other products in our pipeline, there are portions of their development that happen in placebo-controlled studies, usually earlier clinical development or in certain populations. For instance, our COVID vaccine was studied in children in a placebo-controlled context. So, it will really depend upon, ultimately, what the FDA and HHS feel is appropriate and their guidance at a -by-program level of what that will require. Our responsibility as a manufacturer and a drug developer is to make sure that we provide the data that regulators and public health officials feel like they need so that they can stand behind our products. And so, we will absolutely engage constructively in making sure we understand what those needs are and that we fulfill them.

Thank you. One moment

for our next

question.

Our next question comes from Terrence Flynn with Morgan

Stanley. Your line is open. Good morning. This is Chris Ahn for Terrence. Just one quick question on the COVID strain selection. So, given the regulatory uncertainties, can you please elaborate on the process for the COVID strain selection moving forward? Thank you.

Sure. I will answer it from a global perspective. I will start by saying, in every instance, it is up to our regulators in all these countries to tell us as manufacturers what updates they may or may not want for the coming year. I will note that some years, flu does not update all of its strains, for sure. In some years, and so far with COVID, we've had updates every year. There are continuing evolving strains that we are tracking that we think might justify an update this year, but that decision will really lie with a set of regulatory bodies. First, we will probably, based on timing here from WHO and EMA and other international regulators, and then we would expect to also hear, probably at the same time, from the US FDA. The process is really up to them, how they choose to ultimately conduct their selection process on whether or not they want to do a strain update for this year and what the composition would be. I'll defer to each of those individual regulators, but we would expect within the next month if we follow the same process that we have in prior years to hear from all of them about what they'd like to see us deliver for the fall for their respective countries.

Thank you.

One moment for our next question. Our next question comes from Corey Kisboff with Evercore ISI, your line is open.

Hey, good morning, guys. Thanks for taking the question. I wanted to ask you about the flu-COVID combination and the updated timing you have there. You may not know yet, but is it your expectation that you would need to refile that with the updated flu efficacy data, or could you just submit that data as a, I guess it would be considered a major amendment? In other words, potentially delaying this by just three months and enabling a potential FDA decision in early 2026 as opposed to later in the year. Thank you.

Thank you for the question. And I think the short answer will be we don't know. It will ultimately depend upon consultation with the FDA of what they would prefer the approach to be. It is totally appropriate to submit that data as an amendment to the BLA. It could also be from a pragmatic perspective, it makes sense to update more broadly the BLA submission with it, which could result in resubmission. We'll just go forward with whatever feels like the most pragmatic approach, and ultimately the one that the FDA guides us to do. I will say that absent that, there is a lot of other information in the current file, including the performance of the COVID component, obviously things on manufacturing, the broader immunogenicity and safety data set from the pivotal phase three for the flu-COVID combo, and the review of all that information is progressing. And so there are reasons why amending with the flu efficacy data may be the most pragmatic approach, but again, it will depend upon consultations with the FDA, which will only be appropriate to do after we have that flu efficacy data in hand.

Okay, helpful, thank you. One moment for our next question. Our next question comes from Courtney Breedon with Bernstein, your line is open.

Hi, thanks for the question today. The main kind of focus for us is really on kind of some of the new cost cutting that you guys have announced today. What we would really like to understand is kind of what particular milestones or expectation changes drove you to increase the cost cutting program? I think you've been quite explicit in the past that you'll be looking for top line signals to drive new changes there. And then kind of the second question is, what components would you point to as being kind of those where you've felt you've been able to flex to enable kind of some of that additional cost cutting that we're now anticipating in 2026 and 2027 from last expectations, thank you.

Yeah, thanks for the question, Courtney. As to the first piece in terms of what are the milestones or what's changed, you know, a lot of this is nothing has changed, so we were expecting and we've been indicating that we are right now going through a lot of phase three, large phase three trials. In RSV, CMV, norovirus, our combination vaccine, flu, and many of those just ramped down and are completed by 2027 and we had never really given guidance for 2027. So much of this was just extending our guidance out to 2027 and 2028, and we're now at the same level here and indicating just what that R&D level will be. The second thing is as to a milestone, I mean, yeah, it's an uncertain environment, so there's nothing from a revenue perspective that we have seen that would indicate that we need to do this, but we need to focus on what we can control, and that is our cost base. And as we look out to 2027 and 2028, we felt that it was appropriate to get our cash cost to about $4 billion to make sure that we fulfill on our commitment to break even by 2028. Now as to the how, I already mentioned the large majority of it, which is the phase three trials, but we have been on a cost efficiency program for the last couple of years, as I mentioned in my prepared remarks, so there's much to do and the teams continue to identify additional opportunities in procurement, we're using digital tools, or relooking how we get work done. And so we just think that there's a lot that we can go do, and that's why we came out with new 2027 guidance, just as we look out, some of this is as expected, some of this is the continued improvements that our teams see, and we look forward to executing on it and fulfilling our commitment to break even by 2028.

Thank you, one moment for our next question. Our next question comes from Miles Minter with William Blair, your line is open.

Hi, I'm Dick, on for Miles, thank you so much for taking our question. First, for norovirus, have you guys identified the source of the GBS case that was originally identified by the FDA and have there been any additional cases of GBS noted in the Northern Hemisphere or Southern Hemisphere trials? And then second, for antismoran, for the study in which you quantify the number of T cell clones induced, we're curious how you're comparing that to BioNTech product and whether you've used the same analysis pipeline that they've used for their quantification for your sequencing data. Thank you.

Thanks for both questions. First, yes, on the norovirus study, we're pleased that the clinical hold has been lifted. Obviously, what means we've sort of satisfied any of the questions and importantly, updated materials that were from an informed consent perspective all that's out there. We have not seen an additional GBS case, obviously. That's encouraging, but not necessarily unexpected. It is a fortunately rare event when it does occur. As far as causality, we may never know. I will remind you that there are GBS cases in the background population, particularly in older adults, that happen fairly regularly, several per 100,000. And we're enrolling these large 25,000, sometimes 50,000 person studies over multiple years. We do see occasional GBS cases actually on the placebo arms of these studies, and now we've seen one in an active. It's possible that it's related to the vaccine. It's possible that it's not. We are working hard to assess causality, but you can't really ever get a direct link. What you really can do, though, is characterize the frequency of these things and make sure that people are aware of them. As a part of our ongoing phase III norovirus study, we'll continue to very actively monitor for additional cases of GBS. We certainly hope we don't see any either on the placebo arm or the active arm. But all of that, we're pretty encouraged, again, just to be off clinical hold and moving forward with enrollment and hopefully moving forward with that program. The antismarine question. So I can't speak to the way BioNTech had run their pipelines. Obviously, we're not deeply familiar with it. We are really encouraged by the clonality that we're seeing in TCRs. I think it's some evidence that we're really deepening and broadening the response and that those are matched by what's happening in the vaccine. That sort of translational data, though, ultimately is supportive of what is the really exciting evidence of efficacy that we've already seen from that study. I think that that's ultimately just giving us some of the why, but the what was the remarkable hazard ratio improvement that we've reported both at ASCO last year and that we'll look to be updating as we continue to follow that phase IIb study.

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 quick questions. One is when we look at the COVID revenue this quarter, the U.S. was only $29 million and seems only a fraction of the Pfizer U.S. revenue. So any concerns on the future market share change? The second question is regarding the flu vaccine data in summer 25. Could you please share your total events that

you plan to achieve? To Gina, I'll take the first question.

I'm not sure if we heard the second question, so we might ask you to repeat that. Yeah, I mean, we looked at the Q1 revenue for ourselves and our competitors, and all we can point everybody to is the actual script data. The script data through the first part of this year is really pretty similar to last year at 38% market share. Even if you go back to last year and you normalize our revenue in the U.S., we've talked about in the past, $1.7 billion. Take out the gross to net changes. It's really $1.5 billion. That across that marketplace is a 40% market share. That's exactly what we see, I guess, 38% scripts data. That's what we see through the first half. I would also say that our customers are trying to manage their working capital better, so their inventory levels are down. I can't comment on other companies' revenue, but I can comment on what we see in the actual marketplace from a script perspective.

Thank you.

Gina, we didn't quite hear the second question. Could you just repeat it, please?

Sure, of course. The second question is regarding the flu vaccine, the interim data in summer 25. I don't know if you will be able to share regarding the total events and the stats around it. That you plan to achieve.

I don't think we have provided any guidance on it. It is obviously a very large number of cases, because there was quite a large disease this year. But at this point, I don't think we're going to provide any guidance. We're ultimately just going to conduct that analysis. Literally, the season is over, and we'll try and share those results and obviously explain them once we've released that.

Thank

you. One moment for our next question. Our next question comes from Jeff Meacham with Citigroup. Your line is open.

Good morning. This is Jarway on for Jeff. Just broadly thinking about the recent ACIP meeting, I was just wondering if you could comment broadly on some of the comments they have made, namely on CNV and its need for durability data and its implementation challenges and for COVID. Perhaps a possibility to move from universal recommendations to one that's risk-based. And then separately for the new checkpoint program, given the cost cuts that you guys are implementing, could you please share perhaps any potential to either add license or even partner that program in the future?

Thank you for all of them. I'll try and answer them quickly. First on CNV, look, I think we do recognize for that vaccine, we'll want to see good durability. Five, 10 years would be ideal, if not longer. Because at the end of the day, what you're trying to do with CNV is zero convert people so that they can control and prevent really a substantial infection with the virus. The durability data we've got to date actually looks really strong. So if you look at the antibody titers through three years now and similar cell-mediated immunity, but focusing on the neutralizing titers, they're essentially flat through three years. And if you model that forward, it does look like it's going to meet our objectives for really durable immune responses. That's incredibly encouraging. We've seen in a related program in EBV, real durability and viral suppression. We previously reported on that. And so we're feeling pretty optimistic about the performance of the latent vaccine platform and specifically CNV in our ability to achieve durability. As far as the ACIP conversation on that, we were actually quite encouraged by how constructive people are about the need for a CNV vaccine, that any efficacy there will be seen as valuable because at the end of the day, this virus is a scourge. And so while durability was raised, we actually think we've addressed that question. And the question of efficacy, we feel pretty aligned with that conversation and optimistic that our current results will be positive. The question on COVID and changes in recommendations. Look, at the end of the day, it is for public health officials to decide how to use our products. Our responsibility is to bring forward the data that allows them to make that decision. Risk-based decisions have been applied in other countries. Certainly, if you look at the types of populations that have been identified, those that are older adults, 65 plus, those who have any risk factor, in fact, 74% of Americans have a risk factor for severe COVID-19, including under the age of 64. There was real support for that. And then there was general support for let's let people decide. I think that was seen in the polling of the ACIP working group. So for those even without risk factors that might want to protect themselves against COVID, they should have the right to do it. I will note that if you look at death and hospitalization data, it tends to be in the older adults. It tends to be in those with risk factors. And so it makes sense that we will want to encourage strongly vaccination in those populations. Again, a thousand Americans a week dying through this past winter is more than died in traffic accidents per week. It's really something we must address. As far as the checkpoint program is concerned, we are really encouraged by that data. We're moving forward. At this point, one of the reprioritizations you saw in our pipeline is that we decided not to invest in a pivotal study for younger adult combination vaccines. That's the 18 to -year-old flu-COVID combo vaccine. And really what you should interpret with that is that we are reprioritizing that investment into our oncology pipeline based on the emerging data. It's not any disservice to the – or any problem with the 10-83 program. We're actually really encouraged by it. But we're going to focus there on older adults and those that are higher risk. And we're going to take the opportunity to reinvest that money in the checkpoint, which we are encouraged to move forward with ourselves for now.

Yeah, maybe just to add to Stephen's point, because I think it's an important strategic consideration. As we've said at several meetings, respiratory is a very important franchise for us. There are, as Stephen said, incredible medical needs for many, many years to come, unfortunately, for the patients. Our R&D costs, as those face-wheels are behind us, our R&D costs in respiratory are coming down. That business is generating cash flow. We don't need to invest in manufacturing. And as Stephen said, we really want to be thoughtful about deploying that capital toward oncology. We're very excited about our incisive programs, of course. But as you know, Merck is funding half of it. And so that's why when we see opportunities and the clinical data we're seeing on checkpoints, we are able to pivot very quickly, which we think is very important to really have a company with a strong respiratory business, generating cash, and investing in growth

on therapeutics. That's where we're at now.

Perfect. Thank you. One moment for our next question. Our next question comes from Luca Isi with RBCCM. Your line is open.

Hey, guys. This is Shelby on for Luca. And thanks for taking the question. Maybe following up on the political landscape, RFK is on record arguing there is no evidence that a single antigen vaccine ever worked for respiratory diseases. He also claims he is working on multi-antigen vaccines. Do you know what he means by that? And also maybe bigger picture, how confident are you that your upcoming PDUFAs will be reviewed based on the risk-benefit profiles of the molecule and not political agendas? Any thoughts? Much appreciated.

Thanks for the question. As far as the Secretary's statements, I think you'd have to refer those questions to him. I can't comment because ultimately it'll depend upon his perspectives. I will note that we have products that have been approved that have demonstrated efficacy. So we'll continue to provide data hopefully in support of that because we do ourselves believe that the clinical trials we run really do support

the

benefits of our products, including those that are single antigen. And we have some multi-antigen products. I'll remind you that CMV is a 7 mRNA massive multi-antigen product as is EBV as are many of our other vaccines. And so we do believe that sometimes single antigen makes sense and sometimes multiple antigen makes sense. And we do both. As far as the question on our PEDUPIDates, as I said a moment ago, we continue to have constructive exchanges of data and information with the FDA in the review of all of our files. We've also been participating in the review of the information with the ACIP CDC working groups that ultimately also recommend these products. Our responsibility is to make sure they have the information they need to do a risk-benefit analysis, to follow the science where it leads. We are confident in the data we have. In the case of our next generation COVID vaccine, point to the fact that that is an 11,000 person, large multi-year randomized efficacy studies. And we think it is a really strong demonstration of the potential for that product to help patients against COVID-19. And so we're quite enthusiastic about it. Most of our other files include similarly large or larger phase three randomized studies. It's quite a lot of information to get through. And our job is to make sure that we present it objectively to the agencies so they can conduct those reviews. We remain confident that those reviews will be consistent with prior practice. And again, it has been business as usual

through the first half of this year for us. Thank you, ladies

and gentlemen. This concludes the Q&A portion of today's conference. I'd like to turn the call back over to Stethan Bensel for any closing remarks.

Thank you so much for joining us today. As you can see, we are really focused on executing on our strategy. Thank you for participating in the call. We look forward to speaking to you in the coming days or weeks. Thank you. Have a good day.

Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.