The Moderna Fourth Quarter 2023 Conference Call began with Lavina Talukdar welcoming participants and introducing the speakers. Stéphane Bancel, the Chief Executive Officer, reviewed the company's financial results and business updates for the fourth quarter and full year 2023. Jamey Mock, the Chief Financial Officer, presented the financial results, and Stephen Hoge, the President, discussed the late-stage clinical programs. Bancel concluded by emphasizing the company's commitment to delivering impact through mRNA medicine and thanking the team for their contributions to the mission.

In 2023, we achieved sales of $6.1 billion and impacted over 100 million people globally. We focused on advancing our development pipeline in infectious disease, oncology, and rare disease. Our U.S. market share increased, but we faced challenges in the EU and Japan. We took steps to improve our COVID business, such as resizing our manufacturing footprint and flattening our commercial structure. Our R&D team made significant progress and we now have nine late-stage programs, including a respiratory vaccine for RSV.

In the fourth quarter of 2023, the company reported positive data from a flu study and is fully enrolled in Phase 3 studies for their next-gen COVID and flu plus COVID combination vaccines. They are also excited about their Phase 3 CMV trial and their Individualized Neoantigen Therapy Program, which is enrolling in adjuvant melanoma and non-small cell lung cancer studies. The company has purchased a manufacturing site to commercialize their INT program and their rare disease therapeutic programs are progressing well. In terms of financials, the company reported GAAP revenue of $6.8 billion and a net loss of $4.7 billion, mostly due to non-cash charges. They ended the year with $13.3 billion in cash and cash investments. The company expects their product sales to decrease in 2024 due to advanced purchase agreements signed in 2022.

In the second half of 2023, the company recorded a total of $4.6 billion in sales, with $2.8 billion in the fourth quarter alone. This was a decrease of 43% from the previous year, largely due to a decrease in sales volume. However, the company's efforts to resize their manufacturing footprint led to a decrease in cost of sales. R&D expenses increased due to the company's commitment to advancing their late-stage clinical development programs. Additionally, there was an upfront payment of $120 million for a strategic research and development collaboration. SG&A expenses also increased by 25% year-over-year.

The increase in spending for the company was primarily due to expansion in commercial operations, resulting in a net income of $217 million for the fourth quarter of 2023. The annual performance showed a decrease in net product sales of 64%, mainly due to lower sales volume of the COVID-19 vaccine. However, excluding deferred revenue, sales were in line with expectations. Cost of sales represented 70% of net product sales, primarily due to strategic efforts to optimize manufacturing operations. Research and development spend and SG&A were in line with expectations, and the income tax provision for the year was $772 million. The company also discussed the requirement to establish a valuation allowance against deferred tax assets.

The company's future income projections do not include products not yet approved by regulators, and a valuation allowance does not affect cash flows or future tax returns. The net loss for the year was $4.7 billion, primarily due to lower product sales and higher R&D expenses. However, excluding non-cash items, the net loss is reduced to $1.6 billion. The company's 2024 financial framework expects net sales of $4 billion, with a low point in the first half of the year due to seasonal factors. R&D expenses are expected to decrease, while SG&A expenses and taxes are expected to remain stable.

The Q3 earnings call for Moderna highlighted their disciplined approach to capital allocation, with a focus on reinvesting in the business. They anticipate $0.9 billion in capital expenditures in 2024 and ending the year with $9 billion in cash. The company's late-stage pipeline, consisting of nine programs across four franchises, made significant progress in 2023. These programs include respiratory vaccines, infectious disease vaccines, and rare disease therapeutics. In 2023, they achieved important clinical milestones, such as filing for RSV vaccine approvals and presenting data from their Phase 3 study at the RSVVW meeting. They also had success in their mRNA-1010 flu program, meeting primary safety and immunogenicity endpoints.

The company is pleased with the progress of its various vaccine studies, including the Phase 3 trials for its Next-Gen COVID vaccine and flu and COVID combination vaccine. The Phase 3 study for its CMV vaccine is also on track, with efficacy data expected in 2023. The RSV vaccine study met its primary and key secondary endpoints, with a vaccine efficacy of 83.7% against RSV. Follow-up data showed sustained efficacy of 63.3% against RSV with two or more symptoms over a medium follow-up of 8.6 months. The timing of enrollment and subsequent analysis aligns with the epidemiology of RSV over the past two seasons.

The trial for the RSV vaccine enrolled steadily over 13 months and included cases from both the smaller RSV season of 2021 and the larger season of 2022-2023. The primary analysis met its success criteria and a pre-planned additional analysis was conducted in April 2023. The data showed sustained efficacy through two seasons and the study is ongoing. The company also achieved clinical milestones in their therapeutics franchises, including beginning Phase 3 clinical studies for their Individualized Neoantigen Therapy in partnership with Merck. Top-line follow-up data from a Phase 2 study in adjuvant melanoma patients was also recently released, confirming the durability of the initially reported responses.

The paragraph discusses the positive results and milestones achieved by Moderna in 2023, with a focus on their respiratory franchise, oncology, and rare disease programs. They anticipate even more progress in 2024, with potential approvals for their RSV and flu vaccines, Phase 3 data for their Next-Gen COVID vaccine, and potential efficacy data for their CMV study. They also plan to expand into additional tumor types and move into registrational studies for rare diseases. The company is looking forward to a busy year of execution in 2024.

The company is focused on executing their late-stage pipeline, with a particular focus on their COVID vaccine and RSV vaccine candidates. They are actively working to increase vaccination rates and respond to a new tender for their COVID vaccine. They anticipate launching their RSV vaccine in multiple markets, with a potential launch in the US in 2025. The RSV market is estimated to be a $10 billion opportunity, with strong demand for the vaccine expected in 2023.

The company is excited to launch their RSV vaccine into a large and growing market in 2023. They believe they have the best vaccine profile in terms of efficacy, safety, and ease of use. Their clinical data shows strong efficacy and a well-established safety profile. They will be the only company to offer an RSV vaccine in a ready-to-use prefilled syringe, which will save time and reduce medical errors for pharmacists. They anticipate their PFS presentation will be welcomed by pharmacists during the busy respiratory vaccine season. The company is focused on continuing to execute and report milestones in their late-stage pipeline in 2023.

The speaker discusses the upcoming busy and exciting year for the company, with multiple Phase 3 readouts and product filings. They also mention their commitment to financial discipline and cost improvements, as well as the use of AI across the business. They believe that 2024 will be a year where the company is seen as an mRNA platform company rather than just a COVID vaccine company, and they are confident in their ability to deliver on their mission. They then open the floor for questions.

The speaker, Stéphane Bancel, responds to a question from Michael Yee about the company's plans for their RSV product. Bancel mentions that they cannot start contracting yet, but their medical team has been promoting the product at conferences. He also mentions that there is high excitement about the possibility of a pre-filled syringe product and that discussions with pharmacy leaders have been positive. The next question comes from Gena Wang with Barclays.

Gena Wang asks about the RSV vaccine and the upcoming ACIP meeting. She wants to know the proportion of participants who completed two seasons and what additional data will be presented at the meeting. She also asks about the potential impact on the 2024 revenue guidance. Stephen Hoge responds that he does not have the exact proportion of participants, but it is likely a large number. He also mentions that they will provide updates on durability, immunogenicity, and data on different subpopulations at the ACIP meeting. Stéphane Bancel adds that they will listen to the committee's feedback on decision-making around repeat dosing or boosting.

The speaker discusses the potential upsides and downsides for sales this year, including the opportunity to participate in the European market due to the new tender, complaints about the availability of the Moderna vaccine, and the potential for growth and share in the RSV market. They also mention potential downsides such as low vaccination rates and delays in product launches. In response to a question about the CMV Phase 3 trial, they mention that there is currently no vaccine for CMV and discuss potential factors for success, including clinically meaningful and commercially relevant vaccine efficacy and use in both seronegative and seropositive patients.

The company is conducting a Phase 3 study for a vaccine against CMV, a virus that can cause birth defects. They hope to see a 50% reduction in infection rates, and are enrolling both seropositive and seronegative participants. They plan to launch the vaccine for both groups, as there is currently no widely used diagnostic for CMV. The company expects to complete enrollment and have a readout of the study this year.

The company has made significant progress in their vaccine efficacy studies and will need to see approximately 80 cases before the first interim analysis. The DSMB will evaluate the data and if the statistical threshold is met, the results will be shared with the world. If not, the study will continue until a final analysis at 112 cases. The company expects to have enough cases this year and is confident in seeing a readout from the interim analysis in 2024. The potential for accelerated approval for melanoma is being considered, as well as additional tumor types in both adjuvant and metastatic settings.

The speaker discusses the potential for accelerated approval for their adjuvant melanoma treatment, citing the three criteria that need to be met. They express excitement about the durability of the treatment and mention the need for a confirmatory Phase 3 study and establishment of a commercial manufacturing facility.

The company is making progress on three essential criteria for their neoantigen therapy facility. They are also planning to open additional Phase 3 and confirmatory studies for other indications, including adjuvant and metastatic indications. They are also considering monotherapy indications. The company is also enthusiastic about their RSV product and will be sharing data with the ACIP after getting regulatory approval.

The speaker discusses the sharing of data with the ACIP regarding booster data for their RSV vaccine. They mention that similar data from competitors has also been shared and will be used to inform the ACIP's recommendation for booster administration. They believe the data supports the view that all three products are similar and expects consistent recommendations from the committee. The speaker also mentions that the evaluation of the RSV vaccine in the pediatric population is ongoing.

The speaker responds to a question about the durability of the Phase 3 CMV vaccine and the potential commercial opportunity in a younger adult women/adolescent population. They mention that they have not yet started the study for the RSV vaccine, but are considering taking it into a Phase 3 trial. They also mention that they do not have data on durability for the CMV vaccine yet, but will share it when available. They discuss the potential for good durability in young women due to their strong immune system and mention the importance of a correlative of protection in determining vaccine efficacy and competitive dynamics.

The company has identified a strong candidate for neutralizing antibodies against RSV and has been sharing data with regulators and public health officials. They plan to publish the data and submit it for regulatory approval. Once a correlate of protection is established, it will likely be the primary way for public health officials to determine revaccination and boosting for high-risk populations. The company is also in discussions with the FDA about their seasonal flu vaccine, but there are no updates at this time.

The speaker responds to a question about the company's plans for their drug INT in metastatic settings. They clarify that they have not formally announced this decision and that they are still discussing the data and potential benefits. The speaker also mentions the favorable safety profile and potential in earlier lines of therapy, but acknowledges the high unmet need in the metastatic space.

The company has not yet formally decided to study metastatic indications, but is currently focused on adjuvant and earlier monotherapy. They have scaled up their ability to enroll patients in Phase 3 studies and are making progress in enrolling patients and meeting demand from clinical sites. The company has also made progress in scaling up manufacturing for clinical supply, but the commercial aspect is still being worked on. The goal is to establish a site for clinical supply this year, but further guidance on when it will be fully operational for commercial use will depend on discussions with regulators.

In the last question of the conference call, Evan Wang from Guggenheim Securities asks about the additional studies for RSV and when data will be available for the Phase 3 and 50-plus populations. He also asks about the potential for using Australia as a proxy for COVID sales in 2023 and how interpretable Australia would be. Stephen Hoge responds that the data will be shared with public health officials at the appropriate time and that it will likely be included in the label after the initial BLA is completed. Stéphane Bancel adds that their team has been delivering a strong performance in Australia in terms of COVID and has been helping the government since the beginning of the pandemic.

The speaker discusses a 10-year partnership with the Australian government and the progress of building a plant in Melbourne. They mention discussions with regulators for RSV approval and compare the Australian market to a European market, rather than the US market. They state that there is no correlation between what happened in Australia with COVID and RSV and what will happen in the US in the future. The speaker thanks the audience for their questions and invites them to join Annual Vaccine Day on March 27. The presentation concludes and the audience is thanked for joining.

This summary was generated with AI and may contain some inaccuracies.