Moderna, Inc.

Good day and thank you for standing by. Welcome to the Moderna third quarter 2025 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today. Livina Tulipdar, please go ahead.

Thank you, Kevin. Good morning, everyone. And thank you for joining us on today's call to discuss Moderna's third 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 Stéphane Bancel, 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 turn the call over to Stephane.

Thank you, Lavina. Hello, everyone. Thank you for joining us today. I will start with a quick review of the portal. Jamie will present our financial results and outlook. Stephen will review our commercial progress and clinical programs. And then I will share our key value drivers as we look ahead before we take your questions. In the third quarter, our revenue were $1 billion, driven by sales of our three approved vaccines, Spikevax, Amnexpact, and MERS-VIA. The net loss for the quarter was $200 million. We ended the quarter with $6.6 billion in cash and investments. We remain highly focused on financial discipline. I'm pleased to announce that continued cost reduction efforts across the company in the third quarter of 2025 led to a 34% reduction of cost of sales, R&D, and SG&A combined, compared to the third quarter of 2024. During the quarter, we made good progress across our three strategic priorities. Our first priority, driving use of our commercial products. For Spivax, our original COVID vaccine, we received approval in 40 countries for the seasonal 2025-2026 strain update. Mnexpac, our new COVID vaccine, was approved this year by the FDA. We also filed and received approval for the 2025-2026 strain update in the U.S., making this the first season that Mnexpac is available in the United States. We also received approval for Mnexpac in Canada. For RSV vaccine, Mresvia, we continue to gain regulatory approval, and Mresvia is now approved in 40 countries. We have strategic partnership with three countries, Canada, the UK, and Australia, where we have established manufacturing facilities and secured multi-year off-take agreements. In each of these countries, we have achieved important milestones. In Canada, we delivered the first made-in-Canada mRNA vaccines to the Canadian government for use this season. And in the UK and Australia, our facilities were granted licenses by their respective regulatory agencies. Second priority, add a single pipeline to drive sales growth. We announced in July positive phase III flu efficacy data, which we believe will advance both our flu vaccine program, mRNA1010, and our flu plus COVID combination program, mRNA1083. For the flu plus COVID combination program, our filing continues to be under review by the European Medicines Agency. In our oncology portfolio, At the European Society of Medical Oncology, ESMO, Congress in October, we presented encouraging Phase 1b data for cancer antigen therapy mRNA-4359. Unfortunately, we also announced recently that despite the progress made by the scientific community in understanding the CMV virus, our CMV program did not meet its primary efficacy endpoint for congenital CMV. We will discontinue the development of our CMV vaccine in this indication. Third priority, executing with financial discipline. The team continues to diligently advance our cost improvement program. Over the last four quarters, Q4 2024 to Q3 2025, we delivered a $2.1 billion improvement in cost across cost of goods, SG&A, and R&D versus the prior four quarters. I want to thank the entire Moderna team for this great achievement, and we'll continue to work on prioritizing our R&D pipeline, growing productivity, including by the use of more digital tools, including a large number of GPTs, but also better pricing with our suppliers across the entire company. Thanks to this good progress and momentum, we've reduced projected 2025 cash costs by approximately $500 million since just the last quarter investor call in August 2025. and by approximately $900 million since the beginning of the year. With this, I will hand over to Jamie.

Thanks, Stéphane, and hello, everyone. Today I'll provide an overview of our financial results for the third quarter and share our outlook for the remainder of 2025. Let's start by reviewing our commercial performance, which you can follow on slide 7. Year-to-date, total revenue was approximately $1.3 billion, with $900 million from the U.S. and the remainder from international markets. In addition to product sales, revenue also includes collaboration, grant, and stand-ready revenue associated with our strategic partnerships. For the third quarter of 2025, our total revenue was $1 billion. U.S. revenue was $800 million in the third quarter, the vast majority of which was from our COVID vaccines, which included the successful launch of our new COVID vaccine, MnexBite. Stephen will give more detail on the U.S. COVID vaccination season in a moment. Revenue outside the U.S. was $200 million. Approximately half of international revenue in Q3 was delivered to Canada, where we began executing on our strategic partnership through our in-country manufacturing facility. As a reminder, we have similar strategic partnerships with the Australian and UK governments and expect to begin shipping locally manufactured product in 4Q25 and 1Q26, respectively. For the full year 2025 outlook, we are narrowing our revenue range to $1.6 to $2 billion from our previous guidance of $1.5 to $2.2 billion. For the U.S. market, we expect fourth quarter sales of $100 to $400 million. This would bring our updated full year U.S. revenue guidance to $1 to $1.3 billion versus our prior guidance of $1 to $1.5 billion. Our original guidance assumed year-over-year revenue to be flat to down 33%, excluding one-time items. Our updated guidance now assumes a year-over-year decline of 15% to 33%. COVID vaccination rates remain the largest variable to this range, which Stephen will walk through in a moment. For international markets, we now expect revenue to be between $300 and $400 million in the fourth quarter, bringing the full year to $600 to $700 million. versus our previous guidance of $500 to $700 million. We have a tighter range on our international sales, as most of these sales are for contracted volumes, leaving delivery timing and final vaccination rates as the only remaining variables. Moving to slide eight, I will review our 3Q financial results in more detail. Total revenue was $1 billion in the quarter, as I just discussed on the prior page. We had net product sales of $973 million and other revenue of $43 million from grants, collaborations, royalties, and stand-ready fees. The 45% year-over-year decline in revenue was expected and primarily reflects lower COVID vaccine demand. It's also worth noting that last year's third quarter included approximately $140 million from a true-up adjustment to prior period sales provisions. That benefit did not repeat in Q3 this year. Cost of sales for the third quarter was $207 million, representing 21% net product sales for the quarter. This was a 60% year-over-year decrease in our cost of sales from $514 million in Q3 last year. The improvement was driven by lower inventory write-downs, reduced unutilized manufacturing capacity, and lower volume. Overall, these results reflect the productivity gains and the efficiency improvements we've achieved in our manufacturing operations. R&D expenses in the third quarter were $801 million, a 30% decrease from last year. The reduction mainly reflects lower clinical trial costs, as we've completed several large phase three studies in our vaccine portfolio, as well as efficiency gains across the organization. Last year's results also included an expense related to the purchase of a priority review voucher. SG&A expenses were $268 million in the third quarter, a 5% decrease year over year. The decline mainly reflects lower consulting and external service costs across multiple functions, along with reduced digital and facility spending. These savings reflect the cost discipline we've built into the organization and our continued focus on streamlining how we operate. Our income tax provision for the quarter was immaterial, consistent with the prior year. We continue to maintain a global valuation allowance against the majority of our deferred tax assets, which limits our ability to recognize tax benefits from losses. Net loss for the quarter was $200 million compared to net income of $13 million in Q3 2024. Loss per share was 51 cents compared to earnings per share of 3 cents last year. We ended Q3 with cash and investments of $6.6 billion, down from $7.5 billion at the end of Q2. The decrease was primarily driven by seasonal impact to working capital. With that, let me take a minute to share the progress we've made on our cost reduction goals. As a reminder, our original target this year was to reduce our gap operating expenses from $7.2 billion in 2024 to $6.4 billion in 2025. On a cash cost basis, excluding stock-based compensation, depreciation, and other non-cash charges, that represented a decrease from $6.3 billion in 2024 to $5.5 billion. I'm happy to report that we are now on track to beat our 2025 cost plan by over $1 billion on a gap basis and by $900 million on a cash cost basis, both at the midpoint of our projections. During our previous 2Q call, we had lowered our gap and cash costs by $400 million each, with gap costs lowered from $6.4 billion to $6 billion and cash costs lowered from $5.5 billion to $5.1 billion. Today, we are further lowering our 2025 expense guidance due to additional progress across the company to drive efficiency gains and continued investment prioritization. Our gap operating expense guidance is being reduced by another $700 million from $6 billion to $5.3 billion at the midpoint. This reduction is $500 million of cash costs plus $200 million of non-cash reductions in stock-based compensation and depreciation. The $700 million gap reduction from prior guidance is split evenly between cost of sales and R&D. We are lowering our cost of sales forecast by $300 to $400 million from $1.2 billion to a range of $0.8 to $0.9 billion, which reflects an acceleration of the efficiency programs we are targeting as part of our multi-year cost-out plan. We are also lowering our R&D expense range to $3.3 to $3.4 billion and approximately a $350 million improvement due to continued investment prioritization and efficiency gains in the execution of our clinical trials. In just two years, we expect to reduce our cash costs by approximately 50% from nearly $9 billion in 2023 to $4.6 billion in 2025. We are now ahead of our plans and will update improvements to our 2026 and 2027 targets at our upcoming analyst day on November 20th. Importantly, We continue to target cash break even in 2028. I would like to take this moment to thank all my Moderna colleagues for their hard work and commitment to improve the financial profile of our company. Moving to slide 10, I will share our updated 2025 financial framework. For total revenue, as I mentioned in my earlier remarks, we are narrowing our range to $1.6 to $2 billion. From our previous guidance of $1.5 to $2.2 billion, For cost of sales, our updated guidance is $0.8 to $0.9 billion, an improvement from our previous guidance of $1.2 billion. This updated range assumes a higher cost of sales in 4Q versus 3Q, which factors in similar sales volume and higher unutilized manufacturing charges. Newly introduced tariffs are not expected to have a material impact on our business, but we continue to monitor changes to global tariffs. Our revised R&D range of $3.3 to $3.4 billion projects an increase in 4Q spend due to the seasonality of vaccine trial spend, as well as studies in support of regulatory approvals. SG&A expenses are expected to be $1.1 billion. Similar to last year, we expect SG&A expenses in the fourth quarter to increase primarily due to commercial-related activity. We expect taxes to be negligible in 2025. We expect our capital expenditures are also supposed to be approximately $300 million. We are increasing our year-end cash guidance to $6.5 to $7 billion, an increase of $0.5 to $1 billion from our prior guidance of approximately $6 billion. This increase is projected to increase year-end cash due to the reduction in our operating expense for the year. In summary, we have made strong financial progress against our 2025 financial objectives. We have tightened our sales range because of increased visibility into our seasonal sales. And we have lowered our 2025 cash cost estimate by $900 million from $5.5 billion to $4.6 billion, resulting in a higher projected year-end cash balance of $6.5 to $7 billion. With that, I will now turn the call over to Stephen.

Thank you, Jamie. And good morning or good afternoon, everyone. Today, I'll review our current commercial positioning in the U.S. as well as our progress across our pipeline. As you know, COVID vaccine sales still represent the vast majority of our revenues. And as Jamie pointed out earlier, the U.S. is our largest market in 2025. Slide 12 reviews the U.S. COVID vaccination market during the fall of 24 and the cumulative vaccinations to date for the retail channel for the fall of 25 as reported by IQVIA. As a reminder, the retail channel represented 72% of the total vaccinations in the fall of 2024. We expect the segment will represent a similar proportion of market in 2025. As Jamie noted earlier, our U.S. revenue guidance is $1.0 to $1.3 billion. This range is based on our preseason expectation for a 20% to 40% decline from fall 2024 retail vaccinations of approximately 26 million. As of October 24th of this year, cumulative retail vaccinations were 13.2 million, down approximately 30% year over year, and well within the 20 to 40% decline we had assumed in our 2025 U.S. revenue outlook. Moving to slide 13. Our COVID retail market share is 42%. up two percentage points from last year. We are most pleased by the strong market uptake for MNEXT spike, even given a mid-year launch. MNEXT spike now makes up 55% of our COVID vaccination volume. Slide 14 is a summary of our prioritized pipeline. This pipeline now consists of three approved products, two programs with positive phase three results, and five more candidates in clinical studies with registrational potential. Moving to slide 15, which outlines the latest developments in our late-stage respiratory portfolio, I'd like to start with our COVID vaccines. As mentioned earlier, SpikeVac's updated 2025-2026 formula is now approved in 40 countries. For MNEXT Spike, we received approval for the 2025-2026 formula in the U.S., and we are also approved in Canada. We have also applied for approval in Europe, Australia, Taiwan, and Japan, and would expect to launch in those countries in the 26-27 season. Boram Resvia, our RSV vaccine, it has been approved for adults age 60 and older in 40 countries, and also approved for high-risk adults aged 18 to 59 in 31 of those 40 countries. We recently presented multiple data sets from the Inresvia Clinical Program at ID Week. For our flu vaccine candidate, mRNA-1010, we expect to complete regulatory submissions for approval in the United States, Canada, Australia, and Europe by January 2026. The positive results from our Phase III vaccine efficacy trials We're presented at both ID Week and the European Scientific Working Group on Influenza, or ESWE, this past month. Moving on to mRNA-1083, our combination flu COVID vaccine candidate, our filing for approval is under review with the European Medicines Agency, and we expect to refile with Health Canada by the end of 2025. In the U.S., we are awaiting further guidance from the FDA on our plans to refile. We presented phase three immunogenicity sub-analyses for our flu COVID combination program at ESWE. Now turning to our non-respiratory vaccine and rare disease portfolios. Our ongoing phase three norovirus study has not yet accrued sufficient cases needed to conduct the interim analysis after the first season. and as a result, we will proceed to enroll a second Northern Hemisphere season this winter. As before, the timing of the Phase III readout will be dependent upon accruing sufficient cases to trigger the interim analysis. For mRNA-1647, as we announced in late October, we did not meet the primary endpoint for prevention of infection in our Phase III CMV efficacy study. We are discontinuing development in congenital CMVs, However, we will continue to evaluate mRNA-1647 in an ongoing Phase II trial in patients who are undergoing bone marrow transplantation. In rare diseases, I'm happy to announce that we have reached target enrollment of the registrational study for our propionic acidemia, or PA, program. We also had the opportunity to present data from our ongoing Phase I-II study at the International Congress of Inborn Errors of Metabolism medical meeting during the quarter. For methylmalonic acidemia, or MMA, we presented interim data from the Phase 1-2 trial at that same meeting, and we expect our MMA registrational trial to start in 2026. Turning now to our oncology portfolio, we continue to make significant progress in advancing our programs. For Antismeran, which is partnered with Merck, we have several late-stage studies underway Our phase three trial in adjuvant melanoma is fully enrolled and accruing events towards its interim analysis. Our phase two adjuvant renal cell carcinoma trial is also fully enrolled. And as we have disclosed previously, we have two phase three studies in non-small cell lung cancer and multiple randomized Phase II studies, including a Phase II study in high-risk muscle-invasive bladder cancer and a Phase II study in high-risk non-muscle-invasive bladder cancer, all of which are still enrolling. We've also expanded our antismoron program into the metastatic setting, with a Phase II study in first-line metastatic melanoma and a recently opened Phase II study in first-line metastatic squamous non-smell cell lung cancer. Both these studies are randomized trials. Neoantigen analysis from our Phase II adjuvant melanoma trial was presented at the Society for Melanoma Research meeting in October. Now moving to mRNA-4359, which is enrolling a Phase II study in first-line metastatic melanoma and first-line metastatic non-small cell lung cancer patients. The decision to proceed into those Phase IIs was based on encouraging Phase Ib data some of which was presented at the recent ESMO Medical Congress. In early-stage oncology, we are dosing patients in a Phase I trial for our cancer antigen therapy program, mRNA-4106. For our T-cell engager program, mRNA-2808, I'm happy to announce that the first patient was dosed in the Phase I trial during the quarter. Finally, the IND for our cell therapy enhancer, mRNA-4203, is open, and we look forward to enrolling and dosing the first patient in that study. We're pleased by the growth and breadth of our clinical stage oncology pipeline and the continued strong momentum of the multiple Phase III and randomized Phase II trials within our Antismerin clinical trial program conducted in partnership with Merck. With that, I will hand the call over to Stephan.

Thank you, Stephen and Jamie. We're looking at the three value drivers of our business, commercial, pipeline, and financial. Commercially, we are seeing the benefit from market share gains of MNEXT Bike, which we believe will continue in 2026 and beyond. Next year, our commercial business will benefit from a full-year contribution from our strategic partnership in Canada, UK, and Australia. From a pipeline standpoint, we look forward to potential approvals of our combination flu plus COVID vaccine in Europe. The file is currently being reviewed, and in Canada, we expect to refile soon. In the US, we look forward to refiling, pending further guidance from the FDA. Later this year, we will file our seasonal flu vaccine, mRNA 1010, for approval in the US, Canada, Australia, and the EU. We also expect to see two clinical milestones from our intramural program. First, the five-year, follow-up data from our Phase II adjuvant melanoma study, and second, the efficacy data from our Phase III adjuvant melanoma study. We look forward to the Phase II data from our cancer antigen therapy MRNA4359. We also look forward to the Phase III efficacy data from norovirus vaccine and the recreational efficacy study data for PA program propionic acidemia in rare disease. We have exercised strong financial discipline so far this year. We are ahead of our initial 2025 cash cost projection by $900 million. We will continue to improve our cost structure and drive productivity. For the year-end cash balance projection, we have increased our year-end projection to a range from $6.5 to $7 billion, up $500 million to $1 billion from a prior guidance of around $6 billion. We know that a higher cash balance to exit 2025 and a much lower cost structure when we enter 2025 is the right strategy as we transition from a single pandemic product company to a large diversified portfolio of commercial product in seasonal vaccines, oncology medicines, and rare disease medicines. In closing, I want to recognize the entire Moderna team for their relentless dedication to our mission. All our progress, scientific, clinical, commercial, and operational is focused on our mission, delivering the greatest possible impact to people for mRNA medicines. With this operator, we'll be happy to take questions.

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 hasn't been answered or you wish to move yourself from the 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. As we look to the expense management on the forward here, can you help us understand what's being deprioritized or changed to allow for these changes? And then secondly, you know, in accordance with kind of Royvent and the IP dynamics that are playing out here, can you Just frame your strategy here on the forward as we look to 2026. Thank you. Sure.

Thanks. Hi, Selby. Thanks for the question. So I'll take the first one. So it depends on your reference point in terms of what you talk about from a cost-out perspective. Over the last few years, as I mentioned, we're down 50% from a cash cost basis. But if I'm more recent in our recent $500 million to $700 million reduction, That's split evenly across R&D and cost of sales. So cost of sales is purely driving efficiencies. Everything that the teams are hard at work and have been hard at work doing, they're just accelerating and getting it done faster. So that's unutilized manufacturing capacity. That is all the waste that we saw in materials. They're doing a great job reducing that, driving productivity within the labor force. So that's not really a deprioritized investment. On R&D, it's a bit of both. It is the execution of our clinical trials has been much more efficient. We've talked in the past about the fact that we were operating for speed, and this time we were operating for cost as well and efficiency. So a lot of this is just the execution of our trials. But we are making decisions here and there to not continue to advance to Phase II or Phase IIIs or even out of Phase I here and there. Broadly, we're taking down our, you know, just big picture story from the last couple years. our large phase three vaccine trials are really running down and winding down, including CMV recently and flu combination vaccine. And after that, we are moving into oncology, which is a different amount of patients that are under those trials. So there is some prioritization in there, as we've always said, but a lot of it is also execution, but we still have prioritized our pipeline. So we are excited about the nine or 10 late stage programs that we have that Stephen highlighted in his prepared remarks, and we look forward to continuing to take out additional costs, and we do see that coming down over the coming years, and we'll update you more at Analyst Day.

And good morning, Salvin. On Arbutus, the trial in the U.S. is scheduled for March 9th, 2026. We remain confident in the groundbreaking technology we pioneered, including our lipid and particle delivery system. We are vigorously defending the case and responding to new filings outside the U.S. We believe that our technology does not infringe any valid patents asserted by arbiters.

Thank you.

Our next question comes from Gina Wang with Barclays. Your line is open.

Thank you for taking my questions. Maybe two very quick questions. First one is regarding, you know, the U.S., COVID revenue, 781 million that I assume majority of this basically is the inventory buildup or delivery to the pharmacist. So maybe how often do you track pharmacies to maintain their inventory and what are, you know, additional color you can share regarding your estimate of the revenue for the remaining of this year? And then second question is regarding the CMS, sorry, CMV vaccine. So what is the learning there? You know, why immunogenicity data did not translate to clinical benefit?

Okay, so thanks, Gina. Good to hear from you. I'll take the U.S. sales. Yes, so ultimately the end measure is vaccinations in the U.S. We've got shots in arms. And so in the third quarter, yes, we ship a lot of our product into wholesalers, and then they take it down to our end pharmacists, whether that's a retail pharmacy or an IDN network, a doctor or physician's office. And so we track that almost daily. And really what we put, what Stephen shared with you on the screen, is that's why we show shots in arms. We believe that's the ultimate measure. And if you look at season to date through October 24th, shots and arms are down in the U.S. 30%. There's a lot of reasons for that, some of which we anticipated. And if I take this back to our guidance, when we originally guided at the beginning of the year, we said $1.5 billion in the U.S. sales, one to $1.5 billion. The $1.5 billion was essentially flat year over year. for all aspects, whether it's market share, competitive dynamics, vaccination rates, et cetera, excluding a one-time item from the prior year. And the billion dollars, as I said, is down 33%. So we obviously anticipated that the vaccination rate, which is the largest variable here, could go down. And so now we've seen that go down, and we've reduced our range. So we said we believe vaccination rates will now be down 20% to 40%. And we are – In the heart of the vaccination season, we're probably half to two-thirds of the way through. So we have good visibility to this. We are measuring shots in arms. We talked about our share as well. And we also look at every single day and every single week, is there more pull-down? Is there more pull-down to the physicians? Is there more pull-down to retail? Are there more shipments even in the fourth quarter? And we feel very comfortable with our range now of $1 billion to $1.3 billion. But we do not see vaccination rates in the U.S. getting back to flat. which is the change from the high end, from going from $1.5 to $1.3 billion. Great.

And, Gene, I'll take the CMV question. So, first, we really only have, at this point, the top-line data from that trial. And over the coming weeks and months, we will get a tremendous amount of more information, including detailed information on a bunch of other things. on immunogenicity and potentially even correlates protection and have the ability to generate hypotheses on what maybe didn't work. What I can say at this point is, you know, as you know, going into the trial, we and the field had high hopes that a pentamer neutralizing antibody response, which had not been a part, a strong pentamer neutralizing antibody response, which had not been a part of previous intensive vaccines, was going to be the missing piece for being able to prevent infection with a CMV vaccine. Prevention of infection with the herpes virus or in CMV was an incredibly high bar. It was a difficult bar to go after, but ultimately the only one we thought that we could test that had a chance at meeting our target product profile for prevention of congenital CMV. So I guess what we can say at this point, until we get that additional data, is it looks like, Pentamer neutralizing antibodies weren't the missing piece and that it wasn't sufficient by itself to drive a dramatic improvement in the prevention of infection with CMV. Now, we'll dig into the data as we get it over the coming months. Obviously, look forward to publishing it, sharing it at medical conferences, and hopefully the entire field can learn where vaccine development in CMV might need to go next. But ultimately, Pentamer wasn't enough.

Thank you.

Our next question comes from Corey Kasimov with Evercore. Your line is open.

Hey, good morning, guys. Thanks for taking the question. I'll shift gears over the pipeline. I want to ask about your norovirus program. Are you surprised at all by the slow case accruals here, or is this kind of anticipated? And do you believe this offers any sort of reflection on the commercial opportunity or potential demand for the product should it be approved? Thank you.

Thanks for the question, Corey. So, yeah, predicting epidemiology in norovirus is still an early space. And so, we had always designed the study as a potential two-season study. In fact, we always expected that it was possibly going to be necessary. That happens in flu vaccines. That has happened in other respiratory vaccines, other, you know, vaccines based on case accrual. It happened to us here. I think We believe we're getting better at predicting where that epidemiology will be, where we cite the trials, and ultimately being able to accrue cases that are matched to the vaccine composition. And I think we are hopeful that with this additional second season, which was always a possibility, that we'll be able to show or accrue enough cases to conduct that IA and ultimately demonstrate the efficacy of the vaccine. The impact on commercial target product profile moving forward, I would say we don't believe that there's been a change to that. At the end of the day, what matters here is hopefully a highly effective vaccine against preventing norovirus. It is a well-established burden of disease globally, and we do believe that the health economic benefit of prevention of severe to moderate infections with norovirus will be clear, particularly those that are at highest risk. including those that live in long-term care facilities or for other occupational reasons might be at risk. So we still feel strongly about that target product profile and think that the epidemiology challenges of the last season will be addressable with the second season of enrollment.

Okay. Appreciate it. Thank you. Our next question comes from Luca Issi with RBC. Your line is open.

Oh, great. Thanks so much for taking my question. Congrats on the progress. Maybe, Jamie, can you just talk about what gives you confidence as you can reiterate your cash break-even guide for 2028? I'm appreciative you're making some fantastic progress in terms of managing the alt-packs and the cap-packs, but still your cash cost at the midpoint this year is $4.6 billion. So I think in order to break even in 2028, you really need your top line to re-inflect quite materially from here. So can you just talk about that? I mean, it looks like COVID is still declining. You know, RSV, maybe it's one and done for now. CMV did not make it. INP initially is going to be just for adjuvant melanoma. So what are the near-term products that you think can really inflect the top line in the foreseeable future? And then maybe second, Stefan, quickly, I think a few media outlets have reported that Moderna is working on potential large deals with pharma. So wondering if you can comment on that. And then maybe bigger picture, what's your latest thinking on DD these days? Thanks so much.

Thanks, Luca. There's a lot in there. And we recognize it's on everybody's mind, and we're going to lay this out at analyst day, just so you know. But I'll mention a couple things here. You know, when we say, and we all commit to breaking even, it is both a mix, to your point, of revenue growth and cost reduction. And so on the cost reduction side, as I mentioned earlier to Selveen's question, we see ample opportunity, and I mentioned that we will update our 2026 and 2027 framework at Analyst Day, but there's still plenty to do on that front. On the revenue side, we see a lot through geographic expansion, through our strategic partnerships that I mentioned in my prepared remarks, through new product introductions. We'll get through and lay that out in a more fulsome way at Analyst Day, but We remain committed, but, yes, it is a mix of both the revenue side growing as well as the cost side reducing, and we still feel confident in our plan.

Thank you, Jamie. And on the deal side, as we spoke about in several of our last calls, we really want to get products like the latent vaccine, like EBV, for example, to patients. As we've said, part of our prioritization of our portfolio, we do not want to fund a phase three by ourselves. And so, we are talking to pharma companies. We are talking to financial sponsors. As you know, we have a partnership with Blackstone that we lead on flow and . So, those discussions are ongoing, and when we have something to communicate, we will. Thank you so much.

The next question comes from Tyler Van Buuren with TD Cowen. Your line is open.

Hey there. Thanks for taking my question. This is Greg on for Tyler. It looks like Mnex spike is already taking the slight majority of your COVID vaccinations over spike back. So how do you expect the split between these two vaccines to continue to evolve? And I'd also be interested to hear what feedback you're hearing from pharmacists and other clinicians about Mnex spike so far. Thank you.

Thanks for the questions. So, you know, we're obviously really pleased with that launch. It has become, you know, our leading product in the overall COVID franchise. And that's been, you know, frankly, exceeded our expectations in a positive way. It really speaks to the profile, we think, clinical data, as well as, you know, the overall sort of momentum in the market towards higher risk populations. Some of that as a result of changes in recommendation in this country has in the United States towards high-risk individuals and those over the age of 65. We're continuing to build up that medical story, and the data has been shared, obviously, at ECIP, but in medical meetings. And we hope to continue to build momentum behind the MNIC Spike brand as our leading product in the franchise. Now, SpikeFacts will always have a place. And as you know, SpikeFacts is the only approved product in pediatrics down to six months to four-year-olds. And that is an important population, particularly for those with high-risk factors, you know, those with lung disease or those with underlying comorbidities, even in the young population. So we will always expect some portion to be at spike facts, but over time, we would hope that the older adults and higher-risk populations might migrate to MNIC spike That's consistent with the feedback we've been getting. And, in fact, if you look at many of our large customers, both health systems and pharmacies, that is how they are thinking about the products and using them. We'll be working with governments around the world as we move to launch MNEX Spike outside of the U.S. for the next season, and we hope to continue to see growth in that brand as a part of our overall franchise. But as I said, we will always have both. I don't have specific guidance on the split because at the end of the day, this is a decision made by healthcare providers and customers about what's the most appropriate choice for their patients.

Thank you. Our next question comes from Jessica Fry with JPMorgan. Your line is open.

Hi, good morning. This is for Jessica. Thanks for taking our question. How is the U.S. COVID vaccine demand tracking this season relative to your projections, and what about the ex-U.S. season? And also, can you orient us around the potential annual revenue contribution tied to the manufacturing sites in the U.K., Canada, and Australia? Thank you.

Yeah, so, yeah, I'll break it down, the U.S., so U.S., and then the manufacturing contributions. I think I've mentioned this a little bit already. So our revised guidance is $1 to $1.3 billion in the U.S. We anticipate that vaccination rates are going to be in the range of down 20 to down 40%. That's not too different than what we thought at the outset of the year that it could be flat to down. We definitely incorporated a scenario where vaccination rates could be down, but we feel good about it. We are mostly halfway through the season and feel good about and have confidence in our U.S. range. Outside the United States, we actually raised the bottom end of our revenue guidance. So we used to be half a billion to $700 million. Now it's $600 million to $700 million. That's due to everything is now contracted. A lot of it has been delivered. And as we look to the last couple months of this year, what's really coming down to the only variables left are delivery timing, whether some of this falls into the first quarter of 2026 or remains in 4Q25. And then there are a couple markets that are predicated upon vaccination rates, so the demand is still tied to vaccination rates. So we feel very comfortable with our range outside the United States as well. Then in terms of the strategic partnerships, if you remember, in I think the second quarter, we said that the deliveries for our UK strategic partnership has already shifted outside the year, which was the reason we dropped the high end from $2.5 billion at that time to $2.2 billion. So we do not expect any revenue inside this year. That will be pure growth in the year 2026. I mentioned in my prepared remarks that half of our OU international revenue was in Canada in the third quarter. So Canada is up and running. We believe Australia will be up and running from a revenue perspective, that is, in the fourth quarter, and then the U.K. in the first quarter of next year. So we feel good heading into next year that we should be able to see some revenue growth from our strategic partnerships.

Thank you.

Our next question comes from Jeff Meacham with Citigroup. Your line is open. Hey, guys.

Thanks so much for the question. I have two for you. So the first one on the cost reduction and just looking at the 2028 breakeven target, I was curious if your pipeline evaluation process has evolved just to look at maximizing, you know, ROI on your R&D investments. And then on the rare disease platform, you know, what's the capacity in this TA to add more programs? It does seem like it could be quicker to get the proof of concept data, but I just maybe wanted to compare that to oncology and how you guys were thinking about it. Thank you.

Thanks for both those questions. So, first on R&D, I think it was a couple years ago, reiterated last year, that we said as far as large phase three programs in our infectious disease pipeline, that we would defer further Phase 3 investments until we crossed break-even, cash break-even in 2028. And then as a result of that, there would be this substantial downshifting in our R&D expenditures over last year and this year and the next year ahead as the large Phase 3s for flu, for COVID, for CMV, and even norovirus runoff. And so we've maintained that position all the way through how we've been constructing our pipelines. which I would say is not necessarily ROI maximizing. It is, you know, cash and investment optimizing. We do believe we have several compelling phase two programs. EBV is one example of a vaccine against infection mononucleosis and perhaps multiple sclerosis, but one that we are not moving forward with in terms of investment. I believe that ROI is attractive and positive. We do. but we will wait to make investments until we've shown we can break even based on the current products. And so that's the way our portfolio has been evolving from a construction perspective. Now, there are instances, for instance, in our oncology space where we do see an opportunity to make cash investments within our prior guidance, whether that's with the Antismeran program or with 4359. that we think have a very attractive ROI and, again, can fit within our break-even guidance for 28. And so those are instances of where we will continue to move forward. And maybe that's a natural segue to that last part of your question, which is that is also true to some extent in the rare disease space. We have the two programs, PA and MMA, that are moving towards or, you know, in the case of PA, fully enrolled in their potential registrational studies. And it is a platform where we do believe we can do much more. There's a very large number of diseases for which we think a technology can work. But, again, we want to demonstrate discipline. And so we are not prioritizing making further investments in the rare disease space until we have PA and MMA through those registrational studies, and ideally until we also achieve our break-even targets for 28. It is a lower cash investment to move those programs forward. And so, as you alluded to, it might be a place that naturally, as we get more comfortable over the next year or two, that we start moving perhaps a third or a fourth program through. But that will have to be balanced against further investments in oncology, like the 4359 programs, or potentially the reinitiation of pivotal investments in our infectious disease portfolios. And at this point, we'll make those decisions in the future and haven't got a strategic view one way or the other right now. Great. Thank you.

Our next question comes from Courtney Breen with Bernstein. Your line is open.

Hey, guys. Thanks so much for taking the question today. Just wanted to probe a little bit more on the R&D cuts, perhaps kind of in contrast to Salvin's question, perhaps a little bit more forward-looking. As you think about kind of the efficiencies that you've garnered and the new approach, are there more cuts that you can make going forward to that R&D plan, or would that require actually stopping off programs or changing kind of your prioritized list of assets that you have in the pipe? Thank you so much.

Thank you for the question. So we do expect – further reductions in costs. We'd previously communicated how we were moving towards breakeven. And so today's cash costs for 2025, while they are better than our guidance, they are not done. And we expect further reductions in our gap costs for R&D over the coming year and two, purely based on the sunsetting of our existing prioritized investments. And so we believe that those reductions will happen without further program stops. And we will continue to do investment in the early stage space as well, which, as you know, is a less cash-intensive, capital-intensive area. So at this point, we believe we can continue to drive efficiencies and further cost reductions in our R&D investment in the coming years simply by completing the work that we had started several years ago in our infectious disease vaccines portfolios.

Thank you. Our next question comes from Myles Minter with William Blair. Your line is open.

Hi. This is John. I'm from Myles. Thanks so much for taking our question. So, maybe a follow-up to an earlier question on the CMV program. I know that you're still going through the data, but was wondering if you could speak to any read-through from the CMV trial missing to any of your other latent vaccine studies, or if you view the CMV miss as an isolated event?

Thanks for the question. So, CMV was unique in our pipeline in that it is the only pivotal study, phase three study that we're running against a latent virus and the only one that was going after prevention of infection. So, we do believe that prevention of infection was unfortunately the only way to try and demonstrate a potential for the vaccine against congenital CMV, but it was by far the highest bar. Vaccines generally don't prevent infections, they prevent diseases from the viruses. And even in the case of CMV, we still believe that there's an opportunity for mRNA-1647 to have an impact in patients undergoing bone marrow transplant where they are already infected, but they see a reactivation of their CMV that can have serious potential morbidity and mortality. And for that reason, we think there's an opportunity for a vaccine to help control that reactivation even a vaccine against CMV. So I guess I would say we don't have other programs in our late stage or prioritized pipeline that have a similar read-through or a read-through from the CMV results because we are not trying to prevent infection with any of them. We're trying to prevent diseases. And even in the case of CMV, we see a potential opportunity in an indication like bone marrow transplant CMV reactivation, where, again, the target product profile is going against prevention of a disease, not prevention of infection.

Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 1-1 on your telephone. I'm not showing any further questions at this time. I'd like to turn the callback order step on for any further remarks.

Well, thank you, everybody, for joining today. We look forward to talking to many of you in the coming days and weeks, and we look forward to seeing many of you here on campus on November 24th in Vestal Day. Have a great day. Thank you.

Ladies and gentlemen, that concludes today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day.