The paragraph is an introduction to Moderna's third quarter 2024 conference call. The operator explains call logistics, including a Q&A session and recording details, before handing over to Lavina Talukdar. Lavina provides an overview of the call's agenda, involving discussions on financial results and a business update, led by Stéphane Bancel, Stephen Hoge, and Jamey Mock. She notes the inclusion of forward-looking statements and directs listeners to additional resources on Moderna's website. Stéphane Bancel begins his part by reviewing the business performance, noting $1.9 billion in third-quarter revenue.

The paragraph discusses the company's financial and operational performance, highlighting a net income of $13 million and cash and investments totaling $9.2 billion. It outlines cost-saving measures leading to a $500 million reduction in operating expenses compared to the previous year, excluding a $1.4 billion charge. The earlier U.S. regulatory approval for the COVID vaccine, Spikevax, resulted in increased availability and doubled doses delivered to customers compared to the prior year's start. Market data from retail channels shows increased early vaccine uptake, although recent weekly doses have begun to decline. Moderna holds a 40% share in retail vaccinations and sees the COVID market as a promising long-term opportunity. The company uses vaccination trends to identify growth opportunities in the COVID market.

The paragraph discusses the distribution channels for respiratory vaccines in the U.S., highlighting that retail pharmacies accounted for 73% of the COVID vaccine market in 2023. In contrast, flu vaccines are more distributed through integrated delivery networks (IDNs) and government programs. The text suggests that increasing COVID vaccination rates to match flu levels, especially in underutilized channels like IDNs and government sectors, could significantly benefit public health. Moderna's strategy includes educating healthcare providers on COVID's public health impact and directly engaging consumers to promote vaccination, emphasizing the risks of long COVID and the importance of vaccination.

The paragraph discusses recent developments and future plans for Moderna. It highlights the importance of vaccination, noting the CDC's recommendation for additional COVID-19 doses for specific groups in 2025. Moderna's mRESVIA sales were below expectations due to timing and competition issues, but the company aims for better performance in 2025 by starting earlier and seeking broader label approval. Moderna is also pursuing international approvals. The paragraph announces Abbas Hussain's addition to Moderna's board, emphasizing his extensive commercial experience, and mentions the expansion of Moderna's executive committee to support strategic execution and mission delivery.

Stephen's role at Moderna has been expanded to oversee the entire commercial organization, while he continues as President with responsibilities across research and development, and medical and commercial strategies. Rose Loughlin has been promoted to Executive Vice President, Research, and Jacqueline Miller to Chief Medical Officer, marking the first internal promotions to Moderna's executive committee. This reflects the company's commitment to developing internal talent. Tracey Franklin's role has been expanded to Chief People and Digital Technology Officer, highlighting the integration of people, culture, and digital innovation at Moderna. The company is focused on optimizing work processes and the organization of people and digital technologies. The paragraph ends with acknowledgments of Stephen, Tracey, Rose, and Jacqueline's contributions and new roles, before transitioning to Jamey Mock discussing financial results and future outlook.

The paragraph provides an overview of the company's commercial performance for the third quarter of 2024, highlighted in Slide 14. Net product sales reached $1.8 billion for Q3, totaling $2.2 billion for the year so far. Additionally, there are $100 million in other revenues not included in the slide figures. U.S. sales contributed $1.2 billion to Q3, boosted by an early COVID-19 vaccine launch due to earlier FDA approval, and including a $140 million provision release from fewer product returns. Initial RSV vaccine sales were modest at $10 million, with expectations for future growth. International sales were $0.6 billion, meeting expectations but lower than 2023 due to deferred orders. The company maintains its full-year product sales projection of $3 billion to $3.5 billion, expecting Q4 sales of $0.8 billion to $1.3 billion, with U.S. sales anticipated to be $200 million to $500 million. This range depends on factors like market share, current vaccination rates, and government and IDN participation.

The paragraph discusses the financial performance and expectations for a company's RSV market in 2024. It anticipates being at the lower end of its sales range if the U.S. market declines by 10% and RSV sales do not increase, while international sales for 4Q are expected between $600 million and $800 million, based on contracted volumes. The company's Q3 financial results included net product sales of $1.8 billion, a cost of sales reduction to $514 million, due to strategic restructuring and improved productivity. R&D expenses declined slightly to $1.1 billion, with efficiencies noted. SG&A expenses also fell significantly to $281 million, reflecting cost reductions across the organization.

The paragraph discusses the company's financial performance, highlighting a significant reduction in income tax to $8 million due to a $1.7 billion valuation allowance on deferred tax assets. This contributed to a net income of $13 million, improving from a $3.6 billion loss the previous year, with earnings per share rising to $0.03. Cash and investments decreased to $9.2 billion due to continued R&D and operational expenses. The company continues to focus on cost efficiency and reducing SG&A expenses by 36% year-over-year, driven by cuts in commercial, medical, and G&A spending, as well as improved use of digital technology and AI. Overall, the company emphasizes building foundational capabilities for scalable efficiency.

The company is focusing on improving productivity and increasing COVID-19 vaccination rates through education and advertising, which will result in a smaller decline in SG&A spending in Q4 compared to the previous year. For the full year, SG&A expenses are projected to decrease by 20% to $1.2 billion. The 2024 financial framework forecasts net product sales of $3 to $3.5 billion and a cost of sales at 40% to 45% due to manufacturing improvements. R&D expenses have been revised down to $4.6 to $4.7 billion due to cost savings and study timing. Taxes are expected to be minimal, and capital expenditures are updated to $1.2 billion, partially for purchasing the Norwood campus. The year is expected to end with approximately $9 billion in cash and investments.

The paragraph discusses the company's strategic plans related to its Norwood campus acquisition and provides an update on its R&D pipeline, focusing on respiratory vaccines. The acquisition's cost will be balanced by reductions in other expenses. Sales visibility for the next quarter is strong. The company plans to seek approval for ten product candidates over three years, highlighting positive Phase III data for various vaccines: mRNA 1283 for COVID, mRNA 1345 for RSV, and mRNA 1083 for a combined flu/COVID vaccine. Approvals for 2024 are targeted, with priority review vouchers to be used for some programs. The standalone flu vaccine, mRNA 1010, is progressing with its Phase III study.

The paragraph outlines updates on various Phase III studies and trials being conducted by a company. A Phase III study for a standalone flu vaccine is funded through a project with Blackstone Life Sciences, with the potential for early success after one season. The company anticipates reaching 81 cases for the interim analysis of a Phase III CMV vaccine study by the year's end. Norovirus vaccine trials are enrolling quickly, and the study design is detailed on a subsequent slide. In oncology, a Phase III trial for mRNA 4157 combined with Keytruda in non-small cell lung cancer has begun, targeting patients not responsive to neo-adjuvant treatment. Plans for rare disease therapeutics include generating pivotal trial data for a PA program in 2024 and starting a pivotal trial for MMA in early 2025, following FDA agreement on trial design.

The paragraph discusses two Phase III studies related to vaccines and cancer treatment. The first study tests the efficacy, safety, and immunogenicity of a vaccine in 25,000 adults. The second study, in collaboration with Merck, focuses on non-small cell lung cancer and involves 1,200 patients receiving neo-adjuvant therapy, followed by surgery. Patients not achieving a complete response will be randomized into two treatment arms, with disease-free survival as the primary endpoint. The company aims to drive sales of its approved products, Spikevax and mRESVIA, focus on upcoming product approvals to boost sales growth, and achieve cost efficiency by reducing R&D expenses. They aim to increase COVID vaccination rates to match those of the flu.

The article outlines the company's international expansion plans, aiming to bring manufacturing plants online in the U.K., Canada, and Australia by 2025 and start fulfilling multi-year contracts in these countries. With ongoing RSV contracting in the U.S. and other regions, the company anticipates increased mRESVIA sales and market share. Over the next three years, they aim for up to 10 product approvals to drive sales growth and fund future investments, with near-term milestones for several programs. They plan to file three major products in 2024, including an updated COVID vaccine, an RSV vaccine for high-risk individuals aged 18 to 59, and a COVID-flu combination vaccine, pending FDA discussions. The company is also focused on cost-saving initiatives, with plans to reduce annual R&D expenses by $1.1 billion by 2027 and improve efficiency in cost of sales. They are confident in achieving execution targets and remain committed to making a significant impact on people's lives.

In the paragraph, Salveen Richter from Goldman Sachs asks about the sources of rest-of-world revenue for the third and fourth quarters, specifically which countries contribute and whether these contracts will recur in 2025. Additionally, she inquires about the interim data release for the CMV study if the Data and Safety Monitoring Board (DSMB) recommends un-blinding. Stephen Hoge responds that revenue is coming from countries like the UK, Canada, Australia, and Brazil, with expectations of a decline in 2025 and an uptick in 2026 based on current contracts. Jamey Mock addresses the CMV question, stating that if the DSMB recommends un-blinding due to meeting vaccine efficacy criteria, the results will be shared.

The paragraph discusses the possibility of un-blinding results from a study depending on recommendations from the DSMB (Data Safety Monitoring Board) and indicates that results will be shared if un-blinding is recommended. A question from Eli Merle of UBS is directed at understanding the revenue from ex-U.S. COVID contracts, which have guaranteed purchases until the end of the decade. Stephen Hoge responds by stating that while specifics of the contracts won't be disclosed, the minimum purchase commitments are expected to grow as more products are added. Eli also asks about the timing related to event accruals for interim and final analyses, seeking clarity on these timelines.

The paragraph features a Q&A session during a conference call. Jamey Mock discusses the timing of case confirmations for a study, highlighting a backlog that the team is addressing, and suggests that the final analysis could occur quickly once case accrual is complete. Gena Wang from Barclays asks about commercial aspects, specifically pricing for COVID-19 doses in the U.S. and questions about reserve returns for previous and current winter seasons, as well as the use of a priority voucher for a flu-COVID combo product. Jamey Mock responds to the pricing query, noting that specific pricing details won't be disclosed but suggests that Gena's estimate isn't far off the mark.

In the paragraph, Stephen Hoge discusses the decision not to use a priority review voucher for the flu/COVID combo due to timing issues with the contracting season. Instead, they plan to use it for another product. They anticipate two other submissions to proceed with priority review, potentially leading to approval next year, though no revenue from these projects is included in their 2025 guidance. Gena Wang inquires about the reserve return from the last winter season; Jamey Mock responds that they adjusted it from over $500 million to around $400 million, with a release of about $140 million due to lower return reserve estimates.

The paragraph features a Q&A session in which Michael Yee from Jefferies asks about factors affecting confidence in filing for a combination (combo) product with the FDA and expectations in the RSV market. Stephen Hoge responds by acknowledging ongoing discussions with the FDA regarding the combo product, which is based on recent immunogenicity results from 1083. He mentions that they are working to submit for approval by the end of the year but does not provide specific details on those discussions. Stéphane is anticipated to address the question on the RSV market, where dynamics may be impacting expectations and future market participation.

The decision to not use the priority review voucher was based on the timing of approvals and the potential to miss the influenza contracting season. This also allows for a more thorough review process. Stéphane Bancel discusses the RSV market, noting it's slower than expected due to new CDC guidelines and high inventory levels from previous seasons. The market dynamics may change, particularly in Q1, as inventory issues are resolved and guidelines potentially updated. The ability to contract COVID and RSV vaccines simultaneously for the flu season is expected to impact the U.S. market.

In the paragraph, Stéphane Bancel addresses a question from Tyler Van Buren about U.S. COVID vaccine sales trends. Bancel explains that while Q3 to Q4 last year saw flat sales, the current year's Q4 guidance anticipates a 60% to 80% decline possibly due to vaccine availability timing, with expectations of earlier vaccinations influencing sales. He highlights the importance of analyzing different channels in the U.S. market, such as retailers and long-term care facilities, where earlier starts to vaccination are observed. Retailers are actively pushing vaccination campaigns before Thanksgiving and Christmas. Bancel also mentions collaboration with Integrated Delivery Networks (IDN) to boost COVID and flu vaccination rates.

The paragraph discusses challenges in monitoring the progress of campaigns initiated by retailers and the government for COVID vaccinations, as visibility is limited and orders are received only when placed. It notes this year’s retail season differs from the last one, but hopes for better outcomes through collaborations. Stephen Hoge highlights that product sales aren't directly related to vaccinations, explaining a sales decline from the third to the fourth quarter due to earlier approvals and shipment readiness in the third quarter. Terence Flynn from Morgan Stanley asks about the INT program, specifically the progress of a Phase III lung clinical program and an update on a Massachusetts manufacturing facility, questioning its completion timeline and potential FDA requirements. Stéphane Bancel responds to Terence's inquiry.

The paragraph discusses the company's progress in their plant operations, which are on schedule and no longer a critical path to FDA approval. The team will continue working hard, and clinical work will transition to the new plant once operational. During a Q&A session, Evan Wang asks about potential policy barriers due to election results that might impact vaccine distribution in the U.S. and queries about the competitiveness of their RSV data internationally. Stéphane Bancel responds by emphasizing the company's mission to collaborate closely with government and public health leaders globally, ensuring that their objectives align with improving public health, regardless of administration changes.

The paragraph discusses the challenges and processes involved in the approval and distribution of RSV vaccines outside the U.S. Approval and recommendation timings vary across different markets, and pricing negotiations can be complex, potentially leading to missed seasons. The recommended age for vaccination often targets older populations, further influencing market dynamics. With aging populations in regions like Europe and Asia, the RSV market outside the U.S. is expected to grow in importance. However, there is still a need for increased awareness and education about RSV among both consumers and healthcare providers to enhance vaccine uptake and public health efforts.

The paragraph discusses the development of a pipeline for orphan disease treatments, specifically focusing on pivotal trials for MMA (Methylmalonic Acidemia) and PA (Propionic Acidemia). Stephen Hoge explains that they plan to move quickly into pivotal study designs, with MMA trials potentially advancing faster due to the presence of a biomarker that may expedite FDA approval. In contrast, PA lacks a clear biomarker, necessitating reliance on event rates, which may prolong the process. The timeline for product launch is projected to be post-2026, depending on study enrollment rates and the demonstration of significant benefits either through biomarkers or event rates.

The paragraph is a segment from an earnings call involving discussions about the RSV and COVID vaccine market shares. Edward Tenthoff and other analysts question company representatives, including Stéphane Bancel, about market share expectations. Bancel explains that they do not provide guidance on market share for RSV, and any significant changes would be more evident in the 2025 season. Regarding COVID, Bancel acknowledges a loss of retail market share in the U.S. amid strong competition but notes that the overall market share including retail, IDN, and government sectors will be clearer at the end of the season.

The paragraph discusses the design of a new trial for non-small cell lung cancer involving a chemo combo preceding an investigational new therapy (INT). The trial is aligned with the evolving standard of care that includes neo-adjuvant use of treatments like Keytruda, which has led to complete tumor clearance in some patients. The study aims to determine if INT can benefit those who did not achieve a complete response after initial treatment with chemo and Keytruda. Approximately half of the enrolled patients, expected to not have a complete response, will be randomized to test whether adding INT to continued Keytruda treatment enhances outcomes.

The paragraph discusses the future potential of using Keytruda as a neo-adjuvant treatment in the lung cancer space and other indications, with ongoing studies to evaluate its benefits. The speaker emphasizes the importance of pacing and systematically expanding Phase II and III programs in collaboration with Merck, ensuring manufacturing and execution capabilities. The speaker also addresses the timing of transitioning to combination flu-COVID vaccines, which depends on approvals and public health recommendations, and mentions ongoing COVID litigation, particularly regarding GSK's recent lawsuit.

The paragraph discusses the anticipated timeline for the launch of a flu-COVID combination vaccine, suggesting that a 2025 release is unlikely due to the early timing of flu cases in the United States and the current status of submissions and approvals. The company is targeting a 2026 launch, emphasizing the potential public health benefits of preventing hospitalizations through improved vaccine compliance. The long-term goal is to protect high-risk individuals from respiratory viruses with the combination product. Additionally, Stéphane Bancel comments on a legal case involving GSK, stating that such lawsuits are common in emerging markets and that they are prepared to defend themselves. The conference concludes with closing remarks from Bancel and the operator.

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