Q2 2020 Moderna Inc Earnings Call

[music].

Operator: Following the formal remarks, we will open the call up for your questions. Please be advised that the call is being recorded.

During the formal remarks, we'll open the call up for your question.

Please be advised that the call is being recorded at this time I like to turn the call over to look phenotypic Dar head of Investor Relations at Mckenna. Please proceed.

Operator: At this time, I'd like to turn the call over to Lavina Talukdar, Head of Investor Relations at Moderna. Please proceed. Thank you, Operator.

Thank you operator.

Lavina Talukdar: Good morning, everyone, and welcome to Moderna's second quarter 2020 conference call to discuss financial results and business updates. You can access the press release issued this morning as well as the slides that we'll be reviewing by going to the investor section of our website. On today's call are Stphane Bancel, our Chief Executive Officer, Kyle Dax, our Chief Medical Officer, Stephen Hoge, our President, and David Malie, our Chief Financial Officer.

Good morning, everyone and welcome to mention second quarter 2020 conference call to discuss financial results and business.

[laughter] Jimmy issued this morning, as well that's inside that will be the feeling like going to the investor section of our website.

On todays call I Stephane downtown our Chief Executive Officer cows out our Chief Medical Officer, Steve in home, our President and David Mooney, Our Chief Financial Officer.

Lavina Talukdar: Before we begin, please note that this conference call will include forward-looking statements made pursuant to the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Please see slide 2 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. We undertake no obligation to update or revise the information provided on this call as a result of new information or future results being developed. I will now turn the call over to Steph.

Before we begin please note that this conference call will include forward looking statement made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.

He seems like two of the accompanying presentation in 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 statement.

We undertake no obligation to update or revise the information provided on this call as a result of new information or future results or developments.

I'll now turn the call for there to Stefan.

Stphane Bancel: Thank you, Lavina. Good morning or good afternoon, everyone. I hope all of you are in good health and remain safe. Thank you for joining us for our Q2 Business Update. We are committed to building mRNA as a nucleotide medicine, with Moderna's position to remain the leader in this field. As you know, we believe our mRNA medicines have the potential to address large and mass medical needs, to treat diseases that are not addressable by recombinant protein, Osmo Monitor. Due to the platform nature of mRNA, we believe our mRNA medicines provide a higher probability of technical success to commercial launch and faster timelines to clinical trials and to the market relative to traditional medicine. We also believe that the manufacturing capsule intensity of mRNA is materially lower than recombinant proteins, so our cost of manufacturing at commercial scales would be similar to small molecule injectables.

Thanks.

Good morning over the phone everywhere.

Overview, I wouldn't heads and redundancy.

Thank you for bringing walk you through business.

We are committed to being involved there has been you couple of minutes teams.

Well done that position remained they'd be doing this.

As you know, we believe our among them as a team have potential toward risk large unmet medical need.

At the pre disease, that's almost addressable by recombinant protein.

While small monitors.

Due to the platform they train them on their we've really boy modeling as it seems provider itll, probably be just to confirm success to commercial launch and timelines clinical trials and to the markets where keep occasional medicines.

We also believe that the manufacturing kept 30 intensity of M&A, He's must fairly nowhere been recombinant proteins and talk also manufacturing a commercial escapes would be seeking out from small security injectables.

Stphane Bancel: Let me start by summarizing the key achievements of the company in Q2 on slide 4. MRD1273, a COVID-19 vaccine candidate, saw the start of its Phase 2, and the team focused on the Phase 3 design and preparation for a July start. We signed a strategic long-term partnership with Lonza to develop a significant manufacturing capacity to make mRNA and formulate it at large industrial scale to complement our Massachusetts manufacturing site capacity in the context of a pandemic. We started the technology transfer to London in Q2. We raised $1.3 billion on May 18, and as communicated in our history, this capital was raised to enable us to scale up at risk on manufacturing capacity in anticipation of a potential approval for MRNA 1235. We started investing the proceeds for additional capital equipment at the Massachusetts plant, as well as the Lonza plant in New Hampshire and in Switzerland.

Let me stop by summarizing the Ts you've made to the company in Q2 insightful.

And while the plus 70 free Koby 19 vaccine candidates so the south of its face tool.

And the team focused on the face pre design crude production for two lifestyle.

We signed a strategic long term partnership with Lonza, what's significant manufacturing capacity to make involved there and formulate to eat at large industrial scale to complement our Massachusetts manufacturing side capacity in the context of append to me.

We started to pick never be focusing on day in Q2.

We raised 1.3 billion, though on May 18, and Thats communicate that you know ice free you skeptic <unk> was raised to enable us to keller at risk or manufacturing capacity in anticipation of a potential approval for ammonia 12 70 free.

We started investing the proceeds for additional capital equipment, but my such that plan.

That's what I had the loans our plants in young child and in Switzerland.

Stphane Bancel: Ordering raw materials at a large scale and hiring additional personnel to make mRNA-127. In April, we finalized and announced an award from BARDA for up to $483 million for critical development costs for mRNA-12-selective. An additional award was announced last week for up to $472 million, given the increased size of a Phase III to 30,000 participants. The total award is now up to $955 million, and this is in a very difficult environment during the spring, given the many lockdowns across the U.S. due to the COVID-19 outbreak.

I'll drink raw materials, Apple upscale and hiring additional customer who make and mountain, it's what 70 free.

In April, we finalized and announced and the world from ball, though for up to 483 million that all four clinical development costs and monitor what if there would be free.

But in addition are well above the <unk> announced last week for up to 472 million thought all even to increase the size of a phase free to 50000 participants.

This will put a world these now up to 955 million though.

In a very difficult environment. During this spring even to many of bounds across the U.S. due to could be 19 outbreaks.

Stphane Bancel: Our clinical team was able to continue to operate most of our clinical trials on schedule, and we remain on track to provide in Q3 the Phase 2 interim data for CMV vaccine candidate mRNA 1647. The team continues to work relentlessly to start the Phase 3 study for CMV in 2021. We continue to believe that our C&V vaccine candidate's annual peak sales could be $2 to $5 billion.

Our clinical team was able to continue to operate from most of our clinical trials on schedule.

And we remain on track to providing Q free the phase two interim data for CMV vaccine candidate came out and they 16 47.

The team continues to work with expressly to stop the phase three study for CMV in Twentytwenty one.

We continue to believe that off CMV vaccine candidate annual peak phase could be for two 5 billion girl.

Stphane Bancel: Unlike mRNA-1273 or COVID vaccine candidates, we own the global commercial rights to mRNA-1647 or CMV vaccine candidates. Q2 marked a new growth phase for our company, as we started to build and hire our commercial team. This is a historic moment for those of us who have worked at the company for many years since it was a breakthrough research enterprise working with small animal models. And now we are building commerce.

And that came out and that's what it 70 free Cobi vaccine candidates, we own the global commercial rights of M&A 16, 47, while CMV vaccine candidates.

Q2, Martin you grow phase four company as we started to be and higher or commercial team.

Do you see the historic moment for those of US who have worked at a company for many years since it was a breakthrough with such as the price working with small anyone mothers.

And now we're building commercial.

In Q2, the team started discussions we have several countries around the world, but potential supply agreements by Monday sweats tendency free.

Stphane Bancel: In Q2, the team started discussions with several countries around the world about potential supply agreements for mRNA-12-senitive... We saw our first deferred revenues book in Q2 on the balance sheet for $75 million of cash receipts from deposits for our first potential supply of mRNA-1274. As of July 37, we have received approximately $400 million of cash. On today's call, we will cover three main topics. First, Sal will review and update you on our clinical programs and share some new clinical data on our CMV and Zika vaccine candidates. Then Stephen and I will share with you our value framework for vaccine COVID-19 candidates and our approach for delivering value during the pandemic. Finally, David will take you through the second quarter financials. Now, I will turn the call over to Tyler.

We saw Phil deferred revenues booked in Q2 on the balance sheet for 75 million that off cash receipts from the proceeds for Chris potential supply well then bonnets was 73.

As always we like up to seven we have received approximately 400 million that off caster closing.

Fourth of this goal we've covered three main topics.

I ask Tom will review and update you on the clinical programs and share some new clinical data I'm, not CMV and Zika vaccine candidates.

Vince Stephen and I, we shall we view our value framework for vaccine copied Nike candidates.

No approach for they bring value during independent Mick.

Finally, Debbie can we take to prove a second quarter financials.

Let me now I'll turn the call to Todd.

Let me just for fun and good morning, everyone. Let me start with our prophylactic vaccines portfolio a quick overview of the programs is on slide seven.

It's worth 73 or vaccine against Covenant team has made significant progress we interim results of the phase one trial is no been published in the New England Drew medicine. The phase two trial was fully enrolled and importantly, we recently started with the phase three trial 30000 volunteers to the U.S.

Kyle Dax: Thank you, Stephane, and good morning, everyone. Let me start with our prophylactic vaccine portfolio. A quick overview of the programs is on slide seven. mRNA-1273, our vaccine against COVID-19, has made very significant progress. The interim results of the Phase 1 trial have now been published in the New England Journal of Medicine.

Let's see if these phase two dose confirmation study remains on track for interim data the third quarter. This year and the phase three trial is expected to begin in next year.

Phase one trials for Zika is fully enrolled and those shares some data from the 100 250 microgram dose cohorts shortly well we're preparing for phase two.

Assays wasn't be HD escalation study with our combination Hmtd PSV three vaccine remains on pause with enrollment suspended due to cope with 19 disruptions.

Kyle Dax: The Phase 2 trial was fully enrolled, and importantly, we recently started the Phase 3 trial of 30,000 volunteers in the U.S. A CMV phase 2 dose confirmation study remains on track for interim data in the third quarter of this year, and the phase 3 trial is expected to begin next year. The Phase 1 trial for Zika is fully enrolled, and I'll share some data from the 100 and 250 microgram dose cohorts shortly while we're preparing for Phase 2. Our Phase 1B aged de-escalation study with our combination HMPV-PIV3 vaccine remains on pause with enrollment suspended due to COVID-19 disruption.

And finally, the phase one study with them or they live in from the two against or be led by our partner Merck is ongoing.

So what are these today's additional data from our CMBS Zika phase what programs for CMV. These include 12 months Immunogenicity data from dose cohorts 30, 90, and 100 and they get microgram safety data from the 300 microgram dose cohorts.

For Zika, we've disclosed data from the 10 30 microgram cohorts and today ill show you the safety and Immunogenicity data for the 100 250 microgram dose groups.

So starting with CMV on slide nine you will see it takes a little bit solicited adverse events. After the third and final vaccination in the highest dose we tested 300 microgram.

Let's say 10 Reactogenicity data from this doses displayed side by side with the other lower dose cohorts from the trial.

At the 300 microgram dose level solicited adverse event reaction showed a trend towards increases with the higher dose and were higher in sure outage. This is consistent with what we've seen in the other doses as we move from 30 to 90 or 180 Microgrids.

Kyle Dax: And finally, the Phase 1 study with mRNA 1172 against RSV, led by our partner Merck, is ongoing. So, what is new today is additional data from our CMV and Zika Phase 1 programs. For CMV, these include 12-month immunogenicity data from dose cohorts 30, 90, and 180 microgram and safety data from the 300-microgram dose cohort.

The most commonly reported adverse events were paying that the injection site headache fatigue, my Alger and skills for sure negative participants with fever, and our throughout Europe as more permanent adverse events in zero positives.

Importantly at the 300 microgram dose were continues to be no related serious adverse events reported and no unexpected safety findings.

Moving to the 12 months Immunogenicity data for the full 39 being 180 microgram dose cohorts in the phase one seems to be true. We're happy to report that six months. After the last vaccination with M&A 16, 47, we have durable neutralizing antibody responses out to the 12 months' timeframe.

Kyle Dax: For Zika, we have disclosed data from the 10 and 30-microgram cohorts, and today I will show you the safety and immunogenicity data for the 100 and 250-microgram doses. So starting with CMV, on slide 9, you will see a table of the solicited adverse events after the third and final vaccination at the highest dose we tested, 300 micrograms. The safety and reactogenicity data from this dose are displayed side-by-side with the other lower dose cohorts from the trial. At the 300-microgram dose level, solicited adverse event reactions showed a trend towards increases with the higher dose and were higher in seropositives. This is consistent with what we've seen in the other doses as we move from 30 to 90 and 180 micrograms. The most commonly recorded adverse events were pain at the injection site, headache, fatigue, myalgia, and chills for seronegative participants, with fever and arthralgia as more common adverse events than for seropositive participants.

Slide 10 shows the data in the same format. We reported previously as a top part of the table you see the geometric mean neutralizing antibody titers Gibbs material, so infections or the tend to mirror at the 12 month Mark as was the fold increases above this year a positive benchmark of 50 970.

At the 90, and 180 microgram doses that fold increase in geometric mean titers above that your positive benchmark were 3.63 0.9 fold higher respectively.

In the bottom of half of the table figures for the geometric mean antibody titers against fiberglass infection or the GBM to June for the same doses can be seen and the geometric mean titers against fibroblast cells and the 90 and 130 microgram were 0.70 0.9 fold there were fewer caused the benchmark levels of 14.

49.

Slide 11 is the graphical representation of the geometric mean antibody titers against if you feel you will so infection relative to the Ciro positive benchmark geometric mean tighter and the scale with a large scale you can see that's your negative participants, but solid lines and the increase in neutralizing antibody titers for each of the dose.

Kyle Dax: Importantly, at the 300 microgram dose, there continue to be no related serious adverse events reported and no unexpected safety. Moving to the 12-month immunogenicity data for the full 30, 90, and 180-microgram dose cohorts in the Phase 1 CMV trial. We're happy to report that six months after the last vaccination with mRNA1647, we have durable neutralizing antibody responses out to the 12-month time frame. Slide 10 shows the data in the same format we reported previously. At the top part of the table, you see the geometric mean neutralizing antibody titers against epithelial cell infections or the pentamer at the 12-month mark, as well as the fold increases above the seropositive benchmark of 5917. At the 90 and 180 microgram doses, the fold increase in geometric mean titers above that zero positive benchmark were 3.6 and 3.9 fold higher, respectively.

After each vaccination.

The 90, and 180 microgram doses are shown install the blue and Orange and they are well above the benchmark zero positive level up to 12 month. Mark. This is six months after the last vaccination. So the persistence of neutralizing antibodies is encouraging.

There are positives are represented by the Dash lines. These participants entered the trial with neutralizing antibodies as you can see from the start and they also saw their neutralizing antibody levels further increase with each vaccination remaining above the geometric mean tighter for neutralizing antibody levels to the 12 month smart.

She is an important unmet need and we're encouraged and excited by these 12 months data. We're currently running the phase two dose confirmation study, where we're testing a narrower range of doses of 5100, and 150 micrograms 252, seer negative enter your positive or those who has been enrolled and we remain on track for an interim.

Readout in the third quarter this year.

We continue to plan for the phase three trials in 2021 pending further regulatory interactions and feedback the primary endpoint as we had previously reported is anticipated to be prevention of primary infection in serum negative women of childbearing age and we expect to include less than 8000 participants in the U.S. in Europe.

Kyle Dax: In the bottom half of the table, figures for the geometric mean antibody titers against fibroblast infection, or the GB antigen, for the same doses can be seen, and the geometric mean titers against fibroblast cells at the 90 and 180 microgram were 0.7 and 0.9 fold, or a zero positive benchmark level of 1449. Slide 11 is the graphical representation of the geometric mean antibody titers against epithelial cell infection relative to the seropositive benchmark, geometric mean titer, and the scale is a log scale. You can see the seronegative participants by the solid lines and the increase in neutralizing antibody titers for each of the doses after each vaccination. The 90 and 180 microgram doses are shown in solid blue and orange, and they're well above the benchmark zero positive level at the 12 month mark.

Let me know move to Ameren, 18, 93 or vaccine against the Zika virus, where we've seen additional data at the 100 250 microgram dose levels.

Both of these dose levels were generally well tolerated with a trend towards more observations of locally repayments willing at the injection site with the higher dose levels and after the second vaccination consistent with what we've seen across our vaccine platform. There was a trend of more solicited systemic adverse events noted with 250 microgram dose levels.

Particularly after the second dose there were no related serious adverse events.

You can see some of the 30 microgram data have been updated from our vaccine day presentation back in April.

In terms of the Immunogenicity respond spoke at 100, 250 microgram dose level in Houston strong neutralizing antibody response in both syrup pauses NCR negative participants the table on the left hand side focuses on this year a negative participants and the data for the 10 30 microgram courts have been previously shared.

All serum negative participants in the 100 microgram dose cohorts your converted after the second vaccination similar to that seen with lower 30, microgram dose cohort, but now with higher geometric mean titers as depicted graphically on the bottom.

Kyle Dax: This is six months after the last vaccination, so the persistence of neutralizing antibodies is encouraging. The six seropositives are represented by the dashed lines. These participants entered the trial with neutralizing antibodies, as you can see from the start, and they also saw their neutralizing antibody levels further increase with each vaccination, remaining above the geometric mean titer for neutralizing antibody levels for 12 months. CMV is an important unmet need, and we're encouraged and excited by these 12-month data. We're currently running the Phase 2 Dose Confirmation Study, where we're testing a narrow range of doses at 50, 100, and 150 micrograms.

We did not see any further increase at the 250 my congrats relative to the 100 microgram dose.

No on this page you can see the data for participants with pre existing slightly parsing unity or this year positives were more than 80 93 were still able to mounted Zika specific neutralizing antibody response here. The first vaccination is comparable to a booster response and the response with similar between all dose levels. Although of course I would note that these are very.

Small numbers.

We are reviewing the data will make a dose selection decisions in preparation for the phase two and this program continues to be supported by BARDA.

So let me quickly review at a high level the data generated to date with M&A 12, 73 or vaccine against Koby 19, the phase one clinical data published in the Newman Journal showed that 100% of the participants vaccinated generated neutralizing antibodies and the geometric mean tighter level.

43 were 4.1 fold higher than those seed income to listen to your from three representative cobot 19 patients.

Kyle Dax: 252 seronegative and seropositive adults have been enrolled, and we remain on track for an interim readout in the third quarter of this year. We continue to plan for the Phase 3 trial in 2021, pending further regulatory interactions and feedback. The primary endpoint, as we had previously reported, is anticipated to be prevention of primary infection in seronegative women of childbearing age, and we expect to include less than 8,000 participants in the U.S. and Europe. Now, let me now move to mRNA 1893, our vaccine against the Zika virus, where we've seen additional data at the 100 and 250 microgram dose levels. Both of these dose levels were generally well-tolerated, with a trend towards more observations of local erythema and swelling at the injection site with the higher dose levels and after the second vaccination. Consistent with what we've seen across our vaccine platform, there was a trend of more solicited systemic adverse events noted with 250 microgram dose levels, particularly after the second dose. There were no related serious adverse events.

As published recently in the New England Journal Medicine, and the non human primate vaccination with the two dose regimen of M&A 12, 73 led to rapid protection against infection in both the lungs and those of the animals.

Finally, a preprint from a mouse challenge model had showed consistent protection in the lungs in those areas of those animals as well and this morning, we're happy to hear that nature published. This study is is available online today.

So we've been able to show protection against viral replication and every spcs, we've tested so far and the levels of neutralizing antibodies. The correlative this protection or roughly similar to those we achieved in humans in phase one.

So we look forward to the data readouts expected in the coming months, which will include the older an elderly cohorts in the phase one the safety and Immunogenicity data from the phase two and the potential for interim safety and efficacy analysis from the phase three code.

Let me now quickly review or other clinical programs in the systemic secreted unfilled surface therapeutics I'm happy to report that the additional two cohorts of the phase one trial for motivate and T. 44 have recently completed enrollment as a reminder, and this program. The marinade 1944 encodes for an ITC antibody against the chicken kind of ours.

The two additional cohorts are testing an ivy infusion of M&A 1944 at the high dose of 0.6 make for kikwit still worried pre medication as well as two doses of 0.3 maker keurig without steward predicted pre medication given a week apart.

The randomized phase two trial of our personalized cancer vaccine in combination with Keytruda versus Keytruda alone, which is partnered with Merck is ongoing.

Kyle Dax: You can see some of the 30-microgram data have been updated from our Vaccine Day presentation back in. In terms of the immunogenicity response, both the 100 and 250 microgram dose levels induced a strong neutralizing antibody response in both seropositive and seronegative participants. The table on the left-hand side focuses on the seronegative participants and the data for the 10 and 30-microgram cohorts that have been previously shared. All seronegative participants in the 100-microgram dose cohort seroconverted after the second vaccination, similar to that seen with the lower 30-microgram dose cohort, but now with higher geometric mean titers, as depicted graphically on the bottom. We did not see any further increase at the 250-microgram dose relative to the 100-microgram dose.

We've also made progress with the intra tumoral immuno oncology programs are ox 40 look like and program has expanded into a phase two dose expansion study in combination with durvalumab in patients with ovarian cancer and is actively recruiting patients. The phase one program with our triplet of Oxforty ligand idled 23, and I'll 36.

Yes is ongoing and data were recently presented at ASCO you can fund to link for the data at the bottom of the slide.

Within our systemic intra cellular therapeutics modality, both M&A and PK studies remain on costs due to covert 19 disruptions.

Finally, our partner led programs, including the new NK respect seen with Merck and now 12 and budget as presented continue.

Slide 18 is a snapshot of our development pipeline with M&A 12, 73 in phase three and CMV in preparation for phase three started in 2021, we are for troth known phase two and two preparing for phase two intend development candidates in phase one with a further than nine in preclinical studies.

So with such a broad development pipeline, we anticipate many read outs and next steps in the near term and they are listed on slide 19. These include as I mentioned the phase one results from the older an elderly edge cohorts phase two and interim analysis for phase three for M&A 12, 73, the phase two results from CMV in the third quarter.

Kyle Dax: Now on this page, you can see the data for participants with pre-existing flavivirus immunity or seropositives where mRNA 1893 was still able to mount a Zika-specific neutralizing antibody response. Here, the first vaccination is comparable to a booster response, and the response was similar between all dose levels, although, of course, I would note that these are very small numbers. We are reviewing the data and will make a dose selection decision in preparation for Phase 2, and this program continues to be supported by BARDA. So, let me quickly review at a high level the data generated to date with mRNA-1273, our vaccine against COVID-19. The phase one clinical data published in the New England Journal of Medicine showed that 100% of the participants vaccinated generated neutralizing antibodies, and the geometric mean titer level at day 43 was 4.1-fold higher than those seen in convalescence here from three representative COVID-19 patients. As published recently in the New England Journal of Medicine, non-human primate vaccination with the two-dose regimen of mRNA-1273 led to rapid protection against infection in both Finally, a preprint from a mouse challenge model that showed consistent protection in the lungs and noses of those animals as well.

And the complete phase one data from the additional cohorts from or antibody against but you can get your borrowers.

With that let me turn the call over to Steve.

Thank you Paul.

I'd like to start our discussion on M&A 12 73 value.

By on Slide 21, just recapping.

The scale of the loss that we've opened pacing. It is it is remarkable that this pandemic harmed millions of people already and our Hearts go out to those who lost loved ones have been made six themselves.

Given the scale. It does devastation it is hard to believe that just seven months ago, none of us of I never heard of stars Koby to recover 19.

Globally now over 18 million people had confirmed and sections with the virus and almost 700000 have died in the U.S. that looks like 4.7 million confirmed cases, and a 150000 deaths and the estimates are that by year end in the U.S. alone that could be up to 400000 deaths in this country.

What we're learning about the virus almost every day is that it may have a number of long term so call. It beyond the short term impacts of the disease. So beyond the pulmonary and section pneumonia acute respiratory distress syndrome, and pulmonary embolism that we see there have been increasing reports of other coagulation disorders.

Yes, cardiac injury and long term cyclone as well as disturbing reports of potential long term neurologic complications and potential inflammatory syndromes in children, clearly, we're learning more and more everyday about that terrible devastation of this virus and it's absolutely imperative that we and others advance of vaccine.

Kyle Dax: And this morning, we're happy to hear that Nature published this study, and it is available online today. So we've been able to show protection against viral replication in every species we've tested so far, and the levels of neutralizing antibodies that correlate with this protection are roughly similar to those we achieved in humans in phase one. So we look forward to the data readouts expected in the coming months, which will include the older and elderly cohorts in phase one, the safety and immunogenicity data from phase two, and the potential for interim safety and efficacy analysis from the phase three coach. Let me now quickly review our other clinical programs. In systemic, secreted, and self-surface therapeutics, I'm happy to report that the additional two cohorts in the phase one trial for mRNA-1944 have recently completed enrollment.

To try and blunt this pandemic and control these long term cycle.

So on slide 22, and trying to assign value to the vaccine during a pandemic such as this there are a number of approaches but one of the most established is using incremental cost effective ratios.

You are using a health economic assessment framework, you usually look just at healthcare costs really the direct medical costs associated with carrying through the disease through the ice or analysis, we look at the incremental change in cost divided by the incremental change in health outcome and the health outcome the value of that improvement.

Is measured based on willingness to pay thresholds generally 50 to $150000 per quality adjusted life years.

On slide 22, I'm presenting a recently completed an analysis by quadrant health economics, looking at an ice or at a 60000 dollar quality threshold.

This analysis look just at the short term benefits of vaccination during a pandemic and what I mean by that is just the value created in the first year after rolling out broadly of the vaccine.

Kyle Dax: As a reminder, in this program, mRNA-1944 encodes for an IgG antibody against the chicken coronavirus. The two additional cohorts are testing an IV infusion of mRNA-1944 at the high dose of 0.6 mg per kg with steroid premedication, as well as two doses of 0.3 mg per kg without steroid premedication given a week apart. The randomized phase 2 trial of our personalized cancer vaccine in combination with Keytruda versus Keytruda alone, which is partnered with Merck, is ongoing, and we've also made progress with the intratumoral immune oncology program. Our OX40 ligand program has expanded into a phase 2 dose expansion study in combination with development in patients with ovarian cancer and is actively recruiting patients.

Now scenarios depend on which populations you're looking at and they also depends upon the epidemiology of the virus that's ongoing but looking at current trajectory of infection.

In terms of epidemiology and Vaccinating, all adults, meaning those 18, plus the ice or 50000 value of the vaccine would be approximately $300 per course.

He is focused vaccination just initially in the high risk populations say those over the age of 65 that value expands substantially not surprisingly given the high burden of disease in that population.

Obviously as transmission increases the potential value of vaccine significantly increases beyond.

Now on slide 23, it's important to note the limitations of these ice or type analyses. So while there is obviously a lot of value in a vaccine in directly impacting the health care costs such analysis does not look at the long term so sick Kuala.

And long term disability potential of the disease like Coca 19.

Kyle Dax: The phase 1 program with our triplet of OX40 ligand IL-23 and IL-36 gamma is ongoing, and data were recently presented at ASCO. You can find the link for the data at the bottom of the slide. Within our systemic intracellular therapeutics modality, both MMA and PA studies remain unpaused due to COVID-19 disruption. Finally, our partner-led programs, including the Mutant K-Risk Vaccine with Merck and IL-12 and VEGF with AstraZeneca. Slide 18 is a snapshot of our development pipeline with mRNA-1273 in phase 3 and CMV in preparation for a phase 3 start in 2021. We have four trials now in phase 2 and two preparing for phase 2, and 10 development candidates in phase 1, with a further 9 in preclinical studies.

Also does nothing to capture the social disruption, that's having a huge impact on all of our lives nor does it do anything to reflect the economic loss that is rampant across our economy's globally.

And with that I'd like to turn it over just a fun to talk to our approach.

Thank you Steven for these value framing.

I think if must footprint for me to stops we more than estimation.

We set up nearly 10 years ago now we've been mission to deliver on a nominal fine.

Equate the new generation of medicine for patients.

Our mission has been up compass falling most of the Cape and we continue focusing on Phil.

On slide 25, I want to share our proxy they bring value during the call. Good 19 endemic.

You can get spent they make and from the deep of unprocessed amounted to one of 73.

Promesa then if a patient has never been tiara.

We have a responsibility to do everything we can you give up a safe and effective vaccine.

We have invested in manufacturing at risk ahead of approval to ensure supply ease off will be 19 vaccine candidate is approved.

We are working we've gone mess around the world and all wells.

Between show vaccines accessible regardless of ability to pay.

And it will be with some people on price.

Kyle Dax: So with such a broad development pipeline, we anticipate many readouts and next steps in the near term, and they're listed on slide 19. These include, as I mentioned, the phase one results from the older and elderly age cohorts, phase two, and interim analysis for phase three for mRNA-1273, the phase two results from CMV in the third quarter, and the complete phase one data from the additional cohorts from our antibody against chicken. With that, let me turn the call over to you. Thank you, y'all.

Well be little value.

You independent Nick.

Let me jump to slide 26, and give you some more specifics.

Felt as we thought about a responsible pricing.

We concluded that it is important to consider different time horizons.

We're currently under pending Inc. as defined by the W. actual.

At the Madonna.

Like many somebody capex steps.

We believe that southgobi to virus, he's not going away.

And that would be a need to about connecting Paul ill give him a boost for many years to come.

So we think about two time horizons depend any carrier as defined by double your actual and the endemic Barrett.

During the pendency period, we have priced well you know value, we pre approval to supply agreement mosquito going nuts.

Stephen Hoge: I'd like to start our discussion on mRNA-1273 by, on slide 21, just recapping the scale of the loss that we've all been facing. It is remarkable that this pandemic has harmed millions of people already, and our hearts go out to those who've lost loved ones or have been made sick themselves. Given the scale of devastation, it is hard to believe that just seven months ago, none of us had ever heard of SARS-CoV-2 or COVID-19. Globally, over 18 million people have had confirmed infections with the virus, and almost 700,000 have died.

To date smaller volume agreements have been executed between company to the house and tuckey $7 per those.

I'm traveling agreements.

Our discussion.

We'd be at the lower price for higher volumes.

And again, they meet barrier pressing considerations, we followed traditional dynamics and market for Steve, including vaccine efficacy and the competitive landscape.

We will look to price in line Weve OVARA innovative conventional vaccines.

We expect traditional approaches to vaccine got chase and distribution in the endemic phase.

Well, if I mean, I'm tempted baby pointing to will cool or financials David.

Okay. Thank you Stefan.

Turning to slide number 28 in today's press release, we reported our second quarter on old into 2020 financial results.

Stephen Hoge: In the U.S., that looks like 4.7 million confirmed cases and 150,000 deaths. And the estimates are that by year-end, in the U.S. alone, there could be up to 400,000 deaths in this country. What we're learning about the virus almost every day is that it may have a number of long-term sequelae beyond the short-term impacts of the disease. So beyond the pulmonary infection, pneumonia, acute respiratory distress syndrome, and pulmonary embolism that we see, there have been increasing reports of other coagulation disorders, cardiac injury, and long-term sequelae, as well as disturbing reports of potential long-term neurologic complications, and potential inflammatory syndromes in children.

We ended Q2 2020 with cash and investments of 3.1 billion compared to 1.7 billion at the end of Q1.

The increase is driven by the capital raise in May of this year.

Net cash used in operating activities was 130 million for the first half of 2020 compared to 253 million in 2019.

Decrease in 2020 is mainly due to deposits of $75 million received as of June thirtyth.

For potential future supply of them are in a 12 73.

Net cash used in operating activities for the first half of 2019 also included 22 million of in licensing payments to sell sprint to sub license certain patent rights.

Stephen Hoge: Clearly, we're learning more and more every day about the terrible devastation of this virus, and it's absolutely imperative that we and others advance the vaccine to try and blunt this pandemic and control these long-term sequelae. So in slide 22, in trying to assign value to a vaccine during a pandemic such as this, there are a number of approaches, but one of the most established is using incremental cost-effective ratios. In a health economic assessment framework, you usually look just at health care costs, really the direct medical costs associated with caring for the disease.

Cash used for purchases of property and equipment was 25 million for the first half of 2020 compared to 18 million in 2019.

Total revenue was 66 million for Q2 2020 compared to 13 million for the same period in 2019.

Total revenue was 75 million in the first half of 2020 compared to 29 million for the same period in 2019.

Total revenue increased for both for three and six month period. Some 2020 due to increases in collaboration and grant revenue.

Stephen Hoge: Through the ICER analysis, we look at the incremental change in cost divided by the incremental change in health outcomes. And the health outcome, the value of that improvement, is measured based on willingness to pay for it, generally $50,000 to $150,000 for quality adjusted loans.

The collaboration revenue increases were mainly attributable to an increase in revenue in the second quarter, particularly from Astra Zeneca.

The increases in grant revenue were primarily due to our BARDA agreement related to the development of our vaccine candidate EM R&D 12 73.

Stephen Hoge: On slide 22, I'm presenting a recently completed analysis by Quadrant Health Economics looking at an ICER at a $50,000 quality threshold. This analysis looked just at the short-term benefits of vaccination during a pandemic. And what I mean by that is just the value created in the first year after rolling out a vaccine broadly. Now, scenarios depend on which populations you're looking at, and the value also depends upon the epidemiology of the virus that's ongoing. Looking at the current trajectory of infection, in terms of epidemiology and vaccinating all adults, meaning those 18 plus, the ICER 50,000 value of the vaccine would be approximately $300 per course.

Research and development expenses were 152 million for the second quarter 2020, compared to 128 million for the same period in 2019.

Research and development expenses were 267 million in the first half of 2020 compared to 258 million for the same period in 2019.

The increases for both three and six month periods in 2020 were mainly due to increased headcount and them R&D 12, 73 clinical development activities.

Overall in both periods, we saw a significant increase in expenses for prophylactic vaccines modality.

As a result of our focus on them on a 12 seven three.

Stephen Hoge: If you focus vaccination just initially on the high-risk populations, say those over the age of 65, that value expands substantially, not surprisingly given the high burden of disease in that population. Obviously, as transmission increases, the potential value of the vaccine significantly increases beyond. Now on slide 23, it's important to note the limitations of these ICER-type analyses. So while there is obviously a lot of value in a vaccine directly impacting healthcare costs, such analysis does not look at the long-term sequela and long-term disability potential of a disease like COVID-19. It also does nothing to capture the social disruption that's having a huge impact on all of our lives. Nor does it do anything to reflect the economic loss that is rampant across our economies.

While expenses related to the rest of the portfolio were stable.

General and administrative expenses were 36 million for Q2 2020 compared to 29 million for the same period in 2019.

Expenses were 61 million for the first half of 2020 compared to 56 million for the same period in 2019.

The increases for both periods were mainly driven by increases in personnel and legal expenses.

Turning to cash flow from net operating activity and purchase of property and equipment on slide 29.

Cash used in operating activity and per purchase of property and equipment was $118 million. Excluding the 75 million for deposits received as of June Thirtyth.

Potential supply them on a 12 73.

In line with previous trends.

Stephen Hoge: And with that, I'd like to turn it over to Stphane to talk to our audience. Thank you, Stephen, for this value framing. I think it is most appropriate for me to start with Moderna's mission.

On a reported basis, including the mentioned 75 million deposits.

Cash used in operating activities and purchase of Ppm me were 43 million for the quarter.

Stphane Bancel: We set up nearly 10 years ago now, with a mission to deliver on mRNA science and create a New Generation of Medicines for Patients. Our mission has been our compass for almost a decade and will continue for the long term.

Turning now to updated guidance for 2020.

Our guidance today maintains the metric of net cash used in operating activities and per purchase of property and equipment.

Stphane Bancel: On slide 25, I want to share our approach to delivering value during the COVID-19 pandemic. During this pandemic, and throughout the development process of mRNA-1273, our promise to deliver for patients has never been clearer. We have a responsibility to do everything we can to develop a safe and effective vaccine. We have invested in manufacturing at risk, ahead of approval, to ensure supply if a COVID-19 vaccine candidate is approved. We are working with governments around the world and all those involved to ensure the vaccine is accessible regardless of ability to pay and will be available at a price well below value during the pandemic. Let me now turn to slide 26 and give you some more specifics. First, as we thought about responsible pricing.

We will adopt additional guidance metrics in the future as the business progress is towards commercialization.

As always we'll be interested many advice you may have on how we can be clear concise and comprehensible.

On an overall basis, the net cash used in operating activities and purchases of property and equipment in 2020 will increase 2.6 $5.85 billion from the prior guidance of approximately <unk> point 5 billion for the year.

[noise] updated guidance for 2020 reflects ongoing investments in low down as broad and learn a clinical and preclinical pipeline as well as a significant activities associated with our efforts to advance our M are in a 12 73 cold and vaccine too.

Third approval and launch.

With regard to the ongoing investment in our base business, we remain on track to prior plans, where we continue to expect net cash used in operating activities and purchases of property and equipment to be approximately <unk> point 5 billion in 2020.

Stphane Bancel: We concluded it is important to consider different time horizons. We are currently experiencing a pandemic, as defined by the WHO, at Moderna. Like many public health experts, we believe that the SARS-CoV-2 virus is not going away and that there will be a need to vaccinate people or give them a boost for many years to come. So we think about two time horizons. The pandemic period, as defined by WHO, and the endemic period. During the pandemic period, we are priced well below value. Preapproval Supply Agreement, mostly to go on. To date, smaller volume agreements have been executed between $32 and $37 per book.

Turning now to the financial impacts of are rapidly advancing marinade 12, 73 coated vaccine.

First expenses that fall under the scope of our BARDA agreement.

These are primarily research and development activities to drive the cobot vaccine to licensure and scale up activities on the technical development and manufacturing side.

As we expect a relatively close matching of expenses and reimbursement we do not expect these activities to materially impact our cash flow and hence these are not shown separately on slide 29.

Stphane Bancel: Lafayette-Wooley-McRae-Mans, End of discussion, will be at a lower price for higher volume. In the endemic period, pressing considerations will follow traditional dynamics and market forces, including vaccine efficacy and the competitive landscape. We will look to price the vaccine in line with other innovative commercial vaccines. We expect traditional approaches to vaccine purchase and distribution in the endemic phase. With this, let me now turn to David for him to walk you over the financials. David.

Next looking up the cobot vaccine related non reimbursable investments.

Primarily for manufacturing up product to be commercialized in the us in internationally.

We expect another the cash impact of coal that related investments to be between.

0.5 $520.75 billion in 2020.

This includes approximately <unk> point 2 billion in capital investments with the balance of the expenses related to raw materials and production activity in our network.

David Malie: Okay, thank you, Stephane. Turning to slide number 28, in today's press release, we reported our second quarter unaudited 2020 financial results. We ended Q2 2020 with cash and investments of $3.1 billion, compared to $1.7 billion at the end of Q1. The increase is driven by the capital raise in May of this year. Net cash used in operating activities was $130 million for the first half of 2020, compared to $253 million in 2019.

Additionally, this investment so its initial commercial infrastructure buildout.

The sum total of net cash used in operating activities for all of mode. During this business is expected to total $1.05 billion to $1.25 billion before consideration of customer deposits.

Also included in todays guidance are the deposits we have received to date.

For potential future supply of our coal that vaccine.

Deposits as of July 31, total zero point $4 billion, including 75 million received during the second quarter.

David Malie: The decrease in 2020 is mainly due to deposits of $75 million received as of June 30, 2020, for potential future supply of mRNA-1273. Net cash used in operating activities for the first half of 2019 also included $22 million in licensing payments to sell scripts to sublicense certain patent rights. Cash used for purchases of property and equipment was $25 million for the first half of 2020 compared to $18 million in 2019.

We remain in active discussions with a number of potential customers and we'll update the status as the market evolves.

In summary on a net.

Total company basis, we update or 2020 guidance for net cash used in operating activities to 0.65 to 0.8 5 billion for 2020.

We expect this number to reduce as we received further deposits.

As we progress towards approval and commercialization of them on a 12 73, there's heightened interest in several areas of accounting that will increasingly impact our reported results as we move forward.

David Malie: Total revenue was $66 million for Q2 2020 compared to $13 million for the same period in 2019. Total revenue was $75 million in the first half of 2020 compared to $29 million for the same period in 2019. Total revenue increased for both the three and six month periods in 2020 due to increases in collaboration and grant revenue. Collaboration revenue increases were mainly attributable to an increase in revenue in the second quarter, particularly from AstraZeneca. The increases in grant revenue were primarily due to our BARDA agreement related to the development of our vaccine candidate mRNA-1273. Research and development expenses were $152 million for the second quarter of 2020, compared to $128 million for the same period in 2019. Research and Development expenses were $267 million in the first half of 2020 compared to $258 million for the same period in 2019.

Slide 31 highlight several of these items.

[noise] costs associated with pre launch inventory our expense to R&D in the period little occurred.

We will capitalize or inventory one regulatory approval and subsequent commercialization is determined to be probable and we expect teacher economic benefits from sales to be realizable.

[noise] customer deposits for potential supply of M. on a 12 73 are recorded as deferred revenue.

And we'll be recognized as revenue when revenue recognition criteria are met at a future date.

Accounting for the bar to ground follows the reimbursement model, where we were recognized revenue as we perform services and closely match expenses as they are incurred.

For purchase and supply agreements.

We disclose the aggregated the amount of the purchase obligation that is fixed and determinable as per GAAP accounting requirements.

This is regardless of whether these obligations have been recorded as actual cause lennar financial statements in the current period.

With that I'd turn the call back to Stephane for closing remarks.

Thank you David.

In closing, let me share we view snapshot of more than that today.

David Malie: The increases for both three and six month periods in 2020 were mainly due to increased head count and mRNA-1273 clinical development activity. Overall, in both periods, we saw a significant increase in expenses for prophylactic vaccines as a result of our focus on mRNA-1273. While expenses related to the rest of the portfolio were stated, general and administrative expenses were $36 million for Q2 2020, compared to $29 million for the same period in 2015. The expenses were $61 million for the first half of 2020, compared to $56 million for the same period in 2019. The increases for both periods were mainly driven by increases in personnel and legal expenses. Turning to cash flow from net operating activity and purchase of property and equipment, on slide 29, cash used in operating activity and for the purchase of property and equipment was $118 million.

The company continues to progress its clinical pipeline and good closed in Q2.

To be coming to commercial company.

We have a first phase three program Weve Koby Nike vaccine, but we're also preparing to face freefall CMV vaccine.

We are free program in phase two CMV SMS kinds of acting TCV and injection.

And well equipped Frank face to fall Zika vaccine and ox 40, laggan, you've been kind of dating immuno oncology.

We have eight programs in phase one.

We have had 12 positive phase when without across five different ticking over here going negative.

The problem. He development includes seven vaccines for unmet medical needs.

Which if approved would be 50 CASM vaccine.

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We have five immuno oncology programs equally studies.

We are already is programs that you both MMP we've opened nineties.

We have to what they mean do you just kind of day provided to went the other way in preclinical studies.

The foundations of Madonna I've never been stronger we went back to fall then the head of people don't feel that by the bank and all the animal studies as of the end of July and Thats number we grow considerably over the coming weeks as we continue to enroll off 50000 coffee bank faced free Coke study all koby 19 vaccine candidate.

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David Malie: Excluding the $75 million for deposits received as of June 30, for the potential supply of mRNA-1273, in line with previous trends. On a reported basis, including the mentioned $75 million deposit, cash used in operating activities and purchase of PP&E was $43 million for the quarter.

We have a 1000 I'm curious.

With a fully integrated GMP psyche, my specialists that and a strong experience manufacturing partner in owns a.

Our biopharmaceutical crop now value building, that's picking fees and it was no easy and ethics.

And finally, we have a strong balance sheet at the end of June we have you had meetings, we invest 3.1 billion got off to create value.

We have and sub annual growth Baseball company.

I'm honest Swift has a free is now in place free.

We have received approximately 400 million got off of cash or customer deposits for potential supply of and Monitronics 73 as I've discussed.

David Malie: Turning now to updated guidance for 2020, our guidance today maintains the metric of net cash use in operating activities and for the purchase of property and equipment. We will adopt additional guidance metrics in the future as the business progresses towards commercialization. As always, we'll be interested in any advice you may have on how we can be Clear, Concise, and Comprehensive On an overall basis, the net cash used in operating activities and purchases of property and equipment in 2020 will increase to $0.65 to $0.85 billion from the prior guidance of approximately $0.5 billion for the year. Updated guidance for 2020 reflects ongoing investments in Moderna's broad mRNA clinical and preclinical pipeline, as well as the significant activities associated with our efforts to advance our mRNA-1273 COVID vaccine toward approval and launch. With regard to the ongoing investment in our base business, we remain on track to our prior plan, where we continue to expect net cash used in operating activities and purchases of property and equipment to be approximately $0.5 billion. 2020

And we call can you discuss with many go on and that's around the world. We're interested in getting access to M&A 12 73.

Well I think small I've been extraordinary by many measures small company.

The next six months could see us about sales product pipe, albeit airport.

We know that's we have a special opportunity.

And we're committed to date, bringing on the promise of clients to we fall and Newcastle medicines for patients.

That's why we founded this company.

That is why we were called everything.

And not equipped 73 is ahead of us Pia.

We have a large pipeline, we move and 20 development candidate.

Since our founding.

We have believed that it makes no sense at more than that we'd be a wedding medicine company.

It would be zero, if we fast to make him on his time to work.

Oh, it's would be many major thing if.

The first one get to market, thanks to and have the approval.

That the because I am on Asian information molecule, which makes Madonna a unique biotech platform company.

I would like to when are we marked by thanking the many people who bucky thanking our clinical studies. The green patient has people don't give physicians and nurses.

I would like to Franco button outside the NIH and BARDA.

And in our biopharmaceutical partners.

I would like you say, especially thank you to my team.

We have done a remarkable drubbing Q2, you can get very complex spine scaling Madonna quickly when managing locking down and many potential disruptions.

I'm very proud of asking achievement in the fell seven months of Twentytwenty.

With that kind of happy to take any questions operator.

Thank you Sir.

As a reminder to ask a question you would need to press star one on your telephone to withdraw your question. Please press the pound cake.

David Malie: Turning now to the financial impacts of a rapidly advancing mRNA-1273 COVID vaccine. First, expenses that fall under the scope of our BARDA program. These are primarily research and development activities to drive a COVID vaccine to licensure and scale up activities on the technical development and manufacturing side. As we expect, a relatively close matching of expenses and reimbursements. We do not expect these activities to materially impact our cash flow, and hence, these are not shown separately on slide 29.

Please standby, while we compile that came in a roster.

I show our first question comes from the line of Matthew Harrison from Morgan Stanley. Please go ahead.

Great. Good morning, Thanks for taking my question I guess two for me this morning first.

On on manufacturing for 12, 73 can you give us an update on how much inventory you've built so far and where you are in terms of scaling to that 500 million dose per year run rate that you previously highlighted.

Second I was hoping you could comment on some media reports, we've seen over the last day or two about FDA potentially convening a panel for vaccines in October and and and.

And I guess also comments that there's going to be real time or view of vaccines and what exactly that mean, given the timelines potentially for your phase three study thanks very much.

David Malie: Next, looking at the COVID vaccine related non-reimbursable investments, primarily for manufacturing of the product to be commercialized in the US and international markets, we expect a net impact, a cash impact. We expect COVID-related investments to be between $0.55 to $0.75 billion in 2020. This includes approximately $0.2 billion in capital investment, with the balance of the expenses related to raw materials and production activity in our network. Additionally, this investment includes initial commercial infrastructure buildup. The sum total of net cash used in operating activities for all of Moderna's business is expected to total $1.05 to $1.25 billion before consideration of customer deposits. Also included in today's guidance are the deposits we have received today for potential future supply of our COVID vaccine. Deposits as of July 31 totaled $0.4 billion, including $75 million received during the second quarter.

Okay. This is called let me maybe take the second question first and I'll defer to fund to take the first one.

Look.

I can't comment on media reports I think that's the we have been working very closely with the agency as I'm sure. My colleagues have from other companies to make sure that were locked stuff and give them the greatest.

That visibility we can toward data as it emerges we continue that dialogue as our phase three is now enrolling.

The phase three trial has pretty clear.

If you will interim analyses in this statistical robust statistical plan that we had a described in the past, but obviously with the level of unmet need and more and more data emerging to substantiate the potential for benefit as we continue to accumulate safety data on the phase three I'm.

I'm I'm very happy to see that if the it continues to take a very proactive stance in evaluating the totality of the clinical data as it emerges and you know as soon as I have anymore insight than that they'll be more than happy to share.

David Malie: We remain in active discussions with a number of potential customers and will update the status as the market evolves. In summary, on the net. Total Company Base. We update our 2020 guidance for net cash used in operating activities to $0.65 to $0.85 billion for 2020. We expect this number to reduce as we receive further deposits. As we progress towards approval and commercialization of mRNA-1273, there is heightened interest in several areas of accounting that will increasingly impact our reported results as we move forward. Slide 31 highlights several of these items. Costs associated with pre-launch inventory are expensed to R&D in the period incurred.

Thank you Todd and Matthew on the first question on manufacturing.

We will not show you know inventory numbers.

This time, but I can tell you is that as we speak.

Our teams are making commercial products, assuming the potential approval of amounted to one of 73. So we are you actually making product and stockpiling actual risk.

In terms of capacity out of coffee in which we opted to be fall, which is full twentytwenty Wagner.

500 million bills per yeah.

Continues to be abates plan, meaning.

The team as a good sense of how quickly could go on that plan and the team continues to work really how over many different approaches from new process equipment.

We did put on Nick to find a path to a billion those which we consider ideas data as an upside to the based upon a million you don't base case and the TV few working how to figure out how we can get close out to a 1 billion.

David Malie: We will capitalize our inventory when regulatory approval and subsequent commercialization is determined to be probable, and we expect future economic benefits from mRNA-1273 fail to be realized. Customer Deposits for potential supply of mRNA-1273 are recorded as deferred revenue and will be recognized as revenue when revenue recognition criteria are met at a future date. Accounting for the BARDA grant follows a reimbursement model where we will recognize revenue as we perform services and closely match expenses as they are incurred under the Purchase and Supply Agreement.

Capacity for 2021 output.

Great. Thanks very much.

Thank you.

Thank you.

Our next question comes from the line of Pet 10 tough from Piper Sandler. Please go ahead.

Great. Thank you very much a good morning, everyone.

Question with regard to assumed infection rate for Ses Curry, obviously this is going to be somewhat dependent.

No on sort of where youre enrolling and things like that so what can you tell us about the general assumes effects from rate and kind of how many intrexons, who may need to see to be able to power.

David Malie: We disclose the aggregated amount of the purchase obligation that is fixed and determinable as per GAAP accounting requirements. This is regardless of whether these obligations have been recorded as actual costs in our financial statements in the current period. With that, I turn the call back to Stephane for closing. Thank you, David. In closing, let me share with you a snapshot of Moderna today. The company continues to progress its clinical pipeline and got closer in Q2 to becoming a commercial company. We have our first phase 3 program with our COVID-19 vaccine, but we're also preparing phase 3 for our CMV vaccine. We have three programs in Phase 2, CMV, PCV, and VEGF. And we're also preparing phase two for the Zika vaccine and OX40 ligand development candidate in immuno-oncology. We have eight programs in phase one. We've had 12 positive results, phase one without, across five different technology modalities.

The phase three study of that size, thanks very much.

[noise] I'd said, it's called.

It's a great question. The challenge is that I don't know how to build those assumptions given the huge wide variability, we see an actual infections right. So the number of infections you need to see correlates to the number of cases are required to pass the interim and as we've disclosed this roughly at the.

Little over 50, a little over under the 150 some.

For the first and second interim and then the final that's the number of cases and.

I think the advantage of running a 30000 subject trial with 15.

Thousands of them getting active vaccine in the rest of the placebo is that you know the larger that cohort the more like the order to see those cases early but its of course, it orix function of infection rates I think the.

Sort of if you step back philosophically, we designed with our partners at an age such a large trial with the initial goal not knowing at the time, what the infection rates were you kind of just take it across country average you figure you're going to be able to enrich it somewhat and you make it brought enough. So that its were presented give them could diverse population.

Stphane Bancel: The programs in development include seven vaccines for unmet medical needs, which, if approved, could be first-in-class vaccines. This includes our vaccines against COVID-19, CMV, HMPV plus PRV free combo, RSV in older adults, and RSV in the pediatric population, Zika, and EBV. We have five immuno-oncology programs in clinical studies. We also have four readiness programs in both MMA and PA with Open R&D. We have two autoimmune disease candidates with IL-2 and PD-L1 in preclinical studies.

I think what we've seen is anticipated a deceleration of the timeline to cases, not just by us, but I think quite by many people out there recognizing that infection rates currently in the U.S. are actually higher certainly in the areas in which we're doing this trial then maybe we would have thought three for me.

Once again, so I think the initial projections and.

Stphane Bancel: The foundation of Moderna has never been stronger. We have over 2,000 healthy volunteers and participants enrolled in our studies as of the end of July, and that number will grow considerably over the coming weeks as we continue to enroll over 30,000 participants in phase three co-study for COVID-19 vaccine candidates. We have over 1,000 employees, with a fully integrated GMP site in Massachusetts and a strong, experienced manufacturing partner in Lanzar.

People smarter than me have sort of made them was that we had expected to see the cases come in towards the end of the year or by the end of the year I think with higher infection rates. Currently there may be an acceleration of that but it's extremely hard to predict we'd like everybody else sort of probably these aren't.

Daily and weekly moving average and I don't think I've got a better crystal ball than than anybody else momentum over.

That's helpful. Thank you very much.

Thank you.

Our next question comes from Salveen Richter from Goldman Sachs. Please go ahead.

Stphane Bancel: Our biopharmaceutical partners are leaders in their respective fields and include Merck, AZ, and Vertex. And finally, with a strong balance sheet at the end of June, we have the ability to invest $3.1 billion to create value. We have entered a new growth phase for our company. MNE 273 is now in place. We have received approximately $400 million in cash for customer deposits for potential supply of mRNA-1273 as of July 31st, and we continue to discuss with many governments around the world who are interested in getting access to mRNA-1274. The last six months have been extraordinary by many measures for our company.

Good morning, Thanks for taking my question, so with regard to volume agreements that will be executed at a higher price point for smaller precious larger volume orders. How are you delineating between small labor supply chain terminal volumes and then secondly in two different companies developing vaccines for science company to both.

He is let's just say that pink 50 assays are those athletes identical.

So could you actually look at these programs head to head.

Endpoint.

Wanting solving suddenly take the first one I would some of the two Tyler.

Have given us also on one or on the voting agreements. We have has its guardino very precise Qatar.

Because as you can appreciate.

There are lots of different components that go into getting those extra month to finish line.

Stphane Bancel: The next six months could see us have our first product filed for BLA approval. We know that we have a special opportunity, and we are committed to delivering on the promise of our science to bring forward a new class of medicines for patients. That is why we started this company. That is why we work hard every day.

We put Petro custom house.

I think.

Small, even more kind of into millions and and Alex as you can imagine probably go countries will be a very trend to ballpark.

If anyone who.

I'll start talking about the Queen 50 assets.

Yeah. This is Paul I'll take a running start off it's a great question I think all of us of trying to look at them and understand the assays. There are big differences because those assets are not standardized than you've seen a range of print fifties.

Stphane Bancel: MRA-1273 is the head of the SPIR. We have a large pipeline with more than 20 development candidates. It makes no sense that Moderna will be a one-medicine company. It will be zero.

You've seen essays against life are a suit of ours neutralization.

What's clear is that all of these correlated with each other pretty well, but they're also our differences and I think if you look across that's why everybody is trying to sort of reported out as a ratio to the convalescent plasma. The challenge. There is again there is no standard panel for what the convalescent.

Stphane Bancel: If we fail to make mRNA science work, or it will be many medicines if the first one gets to market thanks to an FDA approval. That is because mRNA is an information molecule, which makes Moderna a unique biotech platform company. I would like to end our remarks by thanking the many people who participate in our clinical studies. Green Patients, Healthy Volunteers, Physicians, and Nurses. I would like to thank our partners at the NIH and BARDA, and in a bariatric surgical bar. I would like to say a special thank you to the Moderna team.

Plasma is so everybody's using different animals, which syrup, I think the ballpark estimate or probably roughly comparative.

My sense is sort of between half along in a log of each other for sure maybe even tighter than that but it's hard to drill down and get confidence that youre really comparing apples to apples and there certainly I don't think identical people try to set them up an identical ways, but you're going to have minor variance says there's also.

Stphane Bancel: They have done a remarkable job in Q2, during a very complex time, scaling Moderna quickly while managing lockdown and many personal disruptions. I am very proud of the team's achievements in the first seven months of 2020. With that, I'm happy to take any question. Operator.

Variability in the preclinical models reported you can see different especially in the NHP you can see people using different to knock your rooms or monocular level, so different severity of infections.

In the different models on the and reporting out protection or not so unfortunately, we're still relatively in the early days I think the good news is that you've seen for our data a pretty robust titers in every which as say you measure as it relates to convalescent plasma I'm happy for all of a.

Operator: As a reminder, to ask a question, you will need to press star 1 on your telephone. Dr. Woodrow, your question, please press the pound key while we compile the Q&A, Show. Our first question comes from the line of Matthew Harrison from Morgan Stanley. Please go ahead. Great. Good morning.

With that I think we're probably not alone there are going to be other vaccines that also seem to be getting.

Close to that and so ultimately will get wiser when we see the phase three results over.

Matthew Harrison: Thanks for taking the question. I guess two for me this morning, on manufacturing for 1273. Can you give us an update on how much inventory you've built so far?

Okay.

Thanks.

Thank you. Our next question comes from Michael Yee from Jefferies. Please go ahead.

Thanks, Good morning, I appreciate all the updates two quick ones from me.

Kyle Dax: And where are you in terms of scaling to that 500 million dose per year run rate that you've previously highlighted? And then second, I was hoping you could comment on some media reports we've seen over the last day or two about FDA potentially convening a panel for vaccines in October and, I guess also comments that there is going to be real-time review of vaccines and what exactly that means given the timelines for your Phase 3 study. Thanks very much. Matthew, this is Kyle.

First you are seeing or the the market has seen a lot of contracts being deployed both in UK.

This morning also another U.S. contract deployed John Jay could you just put into some context fresh how we should think about my garnish position here and I presumption other diversified stockpiled, maybe why or why not there hasn't been anything to announce just maybe just make some broad comments about that.

And then the second question I guess fish since you've reported data there has been obviously a lot of other platforms data that have come out but add now in protein last night, maybe just make a comment about how to put that into perspective, and the markets enthusiasm or give us confusion about their stitch. Thank you.

Good. Thank you Michael Good morning, then we took a look contract and then I would kind of a Tyler.

So.

Kyle Dax: Let me maybe take the second question first, and then I'll defer to Stephane to take the first one. Look, I can't comment on media reports. I think that we have been working very closely with the agency, as I'm sure my colleagues have from other companies, to make sure that we're locked up and give them the greatest. We continue that dialogue as our Phase 3 trial is now enrolling. The Phase 3 trial has pretty clear, If you will, interim analyses and the statistically robust statistical plan that we had described in the past, but obviously, with the level of unmet need and more and more data emerging to And, you know, as soon as I have any more insight than that, I'll be more than happy to share it. Thank you, Tal.

As you know Michael to get to a contract you need two properties to agree on films or as I said in my remarks, and though we are discussing weve.

Governments around the world.

As you know we have a longstanding relationship where you ESCO one month.

It would be front to know agencies in about a up on that I edge.

The good contracts have been signed so far on crackers, So that's actually literally around the world in order to kill regions.

And so as as we get to the right place of costs we.

Make the right announcement as appropriate or on the spending has been said publicly that deeper and governments have different strategy. Some of them you know wants to be the portfolio to manage risk because of course at this stage nobody knows no which vaccine we get approved nobody knows with you if you could see which would be most.

I'll be very important.

Especially for competition that risking of the elderly.

People come all the typical to them the printing to pick a theme might might be very very important.

And so I think what were seeing he's the government's doing what I think.

We would do or you would do if you were running the country or trying to get to cover has covered a lot group of people are which is could be the portfolio thinking about both are we took success.

Stphane Bancel: And Matthew, on the first question around manufacturing, we will not share inventory numbers at this time. What I can tell you is that, as we speak, our teams are making commercial products, assuming the potential approval of MRA 1273. So we are literally making products. Stockpiling, Atreus.

Outperformance of a product.

And Oh, so you know covering the country. So as you see it also does agreements options being into event, which I think again mix that I've spent as we said we want to be part of a solution.

And make sure that we can be helpful.

As we've said you know we are cautiously optimistic about.

The good clinical data so probably vaccine.

And wants to make sure we can help.

As many people as we cannot on the World, Let me going up as we can toward protocols and you can put as we can to kind of somebody spending Mick.

Stphane Bancel: In terms of capacity, I'll confirm what we have said before, which is for 2021. The 500 million doses per year continue to be our base plan, meaning the team has a good sense of how to execute toward that plan. And the team continues to work really hard on many different approaches, from new process equipment to the bottleneck, to find a path to a billion, which we still consider at this date as an upside. So the base case of 500 million is still our base case. And the team is still working hard to figure out how we can get closer to a one billion capacity for 2021. Great, thanks very much.

Tyler kind of come over to fall to sit on top of pushing for micro.

Yes.

It's a great question on how other platforms are starting to stack up with to each other I think.

You know, we I think our data continue to be as good or better than anything anybody's recorded both in terms of what we're able to show neutralizing antibodies and in terms of the challenge with you in the non human primates, and the ability to completely eradicate or eliminate the borrower application in both the long end the nose.

It's been a nice start to see Pfizer validating our data in a way with the bio into contract of course.

We're still very curious to see what they're taking into phase two and three because reportedly they're taking a different current strip than the one for which they've shown data I think the ads no vectors writ large oh, it's been interesting story, a initially it's pretty clear that theres less expectation.

For their ability to boost given the nature of their platform and indeed, the first one I don't think boosted at all the Astrazeneca, Oxford I think are encouraging and that they can get with a boost apparently to levels of convalescent plasma hard to say very early.

Matthew Harrison: Thank you. Thank you. Our next question comes from the line of Ted Tenthoff from Pipeline. Great. Thank you very much. And good morning, everyone.

Data that I think even though the there was more than a thousand subjects. They showed data for 10, which they gave a prime boost so I'm encouraged by those data and I hope that that's enough I suspect that if that ends up being the case then hopefully for all of US you will see them sort of be able to reach the minimal bar.

Edward Andrew Tenthoff: Question with regard to assumed infection rates for phase three. Obviously, this is going to be somewhat dependent on sort of where you're enrolling and things like that. So what can you tell us about the general assumed infection rate and kind of how many infections you may need to see to be able to power a phase three study of that size? Thanks so very much. Hi Ted, it's Paul.

But I I'm encouraged by our data and expect that they will translate into I'm optimistic that they will translate into higher point estimates for efficacy.

Kyle Dax: It's a great question. The challenge is that I don't know how to build those assumptions, given the huge wide variability we see in actual infection rates. So the number of infections you need to see correlates to the number of cases required to pass the interim. And as we've disclosed, it's roughly a little over 50, a little over 100, and 150 some for the first and second interims and then the final. That's the number of cases.

We saw Novavax data at last night, I think any of us who's been following the field vaccines.

Anticipated that a it recombinant protein done the right way with a strong edge event could.

Be effective I think there certainly there neutralizing antibody data or encouraging.

And ultimately I think the phase three results are going to be required now to really understand fully the point estimate for efficacy as well as a better understanding of the Reactogenicity and safety profile of of these various approaches. So in summary, I think the M&A platforms are clearly there.

Kyle Dax: And I think the advantage of running a 30,000-subject trial with 15,000 of them getting the active vaccine and the rest as a placebo is that, you know, the larger that cohort, the more likely you are to see those cases early. But it's, of course, a direct function of infection rates. I think the sort of if you step back philosophically, we designed, with our partners at NIH, such a large trial with the initial goal, not knowing at the time what the infection rates were, you kind of just take it, you know, across the country average. You figure you're going to be able to enrich it somewhat, and you make it broad enough so that it's representative of the diverse population. I think what we've seen is an anticipated acceleration of the timeline for cases, not just by us but, I think, by many people out there, recognizing that infection rates currently in the U.S. are actually higher, certainly in the areas in which we're doing this trial than maybe we would have thought three, four months ago.

With our data looking great I think novavax did a.

Very nice progress and I think the AD no vectors I hope they get there, but I think they're going to struggled to boost in I think all anybody who's done a boost or is able to show a boost is able to show as you know as you would anticipate a very nice potentiation with the booster shot over.

Over.

Thank you. Thank you.

Thank you.

Next question comes from the line of Gena Wang from Barclays. Please go ahead.

Thank you for taking my questions that Q question.

First language regarding the phase three probably coin.

Just wondering how do you CONMED function I think according to the clinical trial by the topic basically no fundamental principles first a congress on cold 19, starting 14 days one off.

No just wondering if they are upon cut off so the I'll be patient with same pound exposure or would you the quanta as you've been positive patients here.

Kyle Dax: So I think the initial projections, and people smarter than me have sort of made them, were that we expected to see the cases come in towards the end of the year or by the end of the year. I think with higher infection rates currently, there may be an acceleration of that, but it's extremely hard to predict. We, like everybody else, sort of follow them on a daily and weekly moving average, and I don't think I've got a better crystal ball than anybody else in that domain.

My second question what are the gondola phase one phase two data they.

Hopefully this month on next month, so will we see more meaningful number of the convalescent stealing from severe patients even think about 58.

So let me take those Oh I'm not sure we're going to see.

Significantly.

Additional data on convalescent plasma, we're going to look at that when we report out the phase two so I think it's premature for me to just say one way or another regarding your question on phase three I'll make two points are the primary analysis is just a number of cases it to.

Edward Andrew Tenthoff: That's helpful. Thank you very much, Tom. Our next question comes from Salveen Richter from Goldman. Good morning, thanks for taking my questions. So with regard to the volume agreements that'll be executed at a higher price point for smaller versus larger volume orders, how are you delineating between the smaller versus larger in terms of volumes? And then secondly, if two different companies developing vaccines for SARS-CoV-2 both use, let's just say, the print 50 assays, are those assays identical? So could you actually look at these programs head to head? Thank you. Good morning, Salveen.

It's not really yeah, it's a slightly different methods statistically, but you end up with the same places I think what you're referring to us.

Pfizer methodology.

You will see the number of cases and then the split in those cases and of course will describe the timeframe in terms of counting those cases, you are correct in that the formal counting of cases, where you want to see the distribution occurs 14 days after the booster shot that's the definition of the primary endpoint. There was however, a secondary endpoint that will look.

At the totality of cap of cases that emerge once people start the trial and of course, I think that could be further supportive evidence, especially if infection rates are so high that indeed, we start to see some cases, even in the first six weeks.

Salveen Richter: So let me take the first one, and I will turn it over to Tyler for the second one. On the volume agreements, we are not disclosing a very precise cutoff because, as you can appreciate, there's a lot of different components that go into getting those acrobats to the finish line with potential customers. I think, you know, Small is more kind of in the millions, and large, as you can imagine, for bigger countries will be a very different ballpark. Even if you want to... Tal, talk about the PRINT50 assays, please. Yeah, this is Tal.

The case definition for US is symptomatic disease again, there may be some minor variations between sponsors I'm not sure everybody is fully harmonize to the same definition weve been very transparent with the exact definition of our endpoint so that people can draw their own conclusions and comparisons over.

Hoover.

Thank you.

Thank you. Our next question comes from the line of Cory Kasimov from JP Morgan. Please go ahead.

Hey, good morning, guys. Thank you for taking my questions to for me as well first one is on pricing I. Appreciate all that thought and detailed that went into your prepared comments on the value proposition. This morning, but I guess, what I'm wondering if we see other companies out there currently agreeing to contracts with various governments with price points that.

Stphane Bancel: I'll take a run at that. It's a great question. I think all of us are trying to look at them and understand the assays. There are big differences because those assays are not standardized, and you've seen a range of PRINT50s. You've seen assays against live virus and pseudovirus neutralization. What's clear is that all of these correlate with each other pretty well, but there are also differences. And I think if you look across, that's why everybody is trying to sort of report it out as a ratio to the convalescent plasma. The challenge there is, again, there is no standard panel for what the convalescent plasma is, so everybody's using different panels of sera. I think the ballpark estimates are probably roughly comparable. My sense is that they are sort of between half a log and a log of each other for sure, maybe even tighter than that.

They appear to range from low single digits to nearly $20 per dose doesn't that make it inherently more difficult for you to try to charge something materially higher than that and then second question probably for towel I'm wondering.

How difficult it it to maintain the integrity of the phase three blinded trial. When you would suspect a large portion of the M&A 12, seven three treated patients are expected to get common vaccination adverse events like fever, another symptomatic other systemic events, where presumably that wouldn't happen with placebo did that.

Kyle Dax: But it's hard to drill down and get confidence that you're really comparing apples to apples, and they're certainly not identical. People try to set them up in identical ways, but you're going to have minor variances. There's also variability in the preclinical models reported. You can see different, especially in the NHP, people using different inoculums or inoculum levels, so different severity of infections in the different models and then reporting out protection or not. So unfortunately, we're still relatively in the early days. But I think the good news is that you've seen pretty robust titers in every assay you measure as it relates to convalescent plasma. I'm happy for all of us that I think we're probably not alone.

Matter much in the engine your and your view thanks.

Good morning, Corey So Stefan I think the first one on pricing actions, we took the be free question.

So I think it I can any discussion Cory many factors go into arriving on up to an agreement.

I would say festivals that gets you have a data that is available at the time over discussions.

Pinnacle model clinical data.

Again, given us so we have a platform we are the proximity to sharing a public information has been shown before on overall.

Okay, perfect. So I think they tighten importance, one because I do not think or products are equal.

And that's palisade, what would have cost along much mall.

Phase three data in the fall.

Another consideration of coffee volume.

As we indicated you know remarks, and then another factor that is important is each time off payments you know how you felt we distributed between.

Kyle Dax: There are going to be other vaccines that also seem to be getting close to that, and so ultimately, we'll all be wiser when we see the phase three results. Thank you. The next question comes from Michael Yee from Jefferies. Please go ahead. Thanks. Good morning. I appreciate all the updates. Two quick ones for me.

Companies, but as we discussed in our remarks, no like us are subject to make product.

Thats risk not knowing you touched on between our case, we'd be approved on up.

And Safi and how many more coffee direction. That's what it's I think when you look at the society, Cuba data as we've shared you know.

We have signed a number of agreements already.

Oh potential supply endoscopy tool to help you pulled all ranch I'd also say you know as volume will increase sort of cost.

Michael Yee: First, you're seeing, or the market is seeing, a lot of contracts being deployed both in the UK this morning and also another US contract deployed to J&J. Could you just put into some context for us how we should think about Moderna's position here and presumption of a diversified stockpile and maybe why or why not? There hasn't been anything to announce just yet. Maybe just make some broad comments about that.

Great that seem to again I mean this so are we work we work with them off yet.

But we also know once we have been come off product.

Tom I don't think that the frequently.

Yes, so curious an astute observation and we and our partners at an initial thought about this one long and hard I think at the end of the day.

You are right after especially after the second as first dose probably people still won't know with taking those people may into whether they've got the active one or not I think the important piece here is that the endpoints or pretty hard endpoints in that.

Stphane Bancel: And then the second question, I guess, is since you've reported data, there have obviously been a lot of other platforms with data that have come out, both Adno and Protein last night. Maybe just make a comment about how to put that into perspective and the market's enthusiasm or people's enthusiasm about those datasets. Thank you. Good Thank you, Michael. Good morning. Let me talk a bit about contrast, and then I will hand over to Tal. As you know, Michael, to get to a contract, you need two parties to agree on terms.

I don't think that you're going to be less likely to report significant symptoms. If youve got received or not and measurement of the PCR test as a PCR test.

We have put in place measures to ensure that there's no sort of a course of the Unblinding. For example, we're going to be testing the by PCR everybody both on dose one and when they come in for the second dose just to make sure that.

Stphane Bancel: As I said in my remarks, you know, we are discussing this with governments around the world. As you know, we have a longstanding relationship with the U.S. government, with different, you know, agencies, like BARDA, DARPA, and NIH. The contracts that have been signed so far are contracts that are actually literally around the world in all the key regions.

They do see some mild flu like symptoms, there clearly attributable to a vaccine or it isn't infection and we're not buying things by measuring more frequently and those that caught the vaccine I think beyond the first couple of days.

I don't expect them to be significant symptoms in anybody so I don't think theres going to be by a thing of any testing.

In terms of the asymptomatic, we're going to look retrospectively anyway and call that based on serology and everybody will get tested so I think by making sure that all the objective measures are done on both arms at the same time coins.

Stphane Bancel: And so as soon as we get to the right place, of course, we will make the right announcement as appropriate. Our understanding, and this has been said publicly, is that different governments have different strategies. Some of them want to build a portfolio to manage risk because, of course, at this stage, nobody knows which vaccine will get approved. Nobody knows the efficacy, which will probably be very important. Especially for the population at risk, you know, the elderly, people with comorbidity factors, to them, the difference in efficacy might be very, very important. And so I think what we're seeing is the government doing what I think we would do, or you would do if you were running the country or trying to get the cover help of a large group of people, which is to build a portfolio, thinking about both the risk of success, the performance of a product, and also, you know, covering the country.

I think we're we should be in pretty good shape here.

Okay. Thank you appreciate.

Thank you. My next question comes from Jeff May come from Bank of America. Please go ahead.

Hey, guys. Good morning, and thanks for the question not just had a few.

So what we've learned on the value of 12 73 is that is at T cell responses or are important as our antibody titers and so.

When you look at the new data today for Zika or for CMV are really anything going forward.

Do you think you'll place more emphasis on optimizing T cell responses, just with respect to the to the platform.

And then just a follow up on 12 73 pricing you know when you look at the phase three data.

Is there a single element that you would say justifies differential pricing be at T cell or b cell or safety profile things like that thank you very much.

So let me take a Jeff. The first question then let's define answer the second I.

I think a lot of has been made out of T cell responses look or T cells or near and Dear to my heart being a medical oncologist. They are required to cure cancer I don't I'm not quite sure there as important to cure Covance 19, frankly, I think what they are as a measure of the quality of the response. So if you will they the fact that we see the right kind of a key.

Stphane Bancel: So as you see, a lot of those agreements have options built into them, which I think, again, makes a lot of sense. As we said, we want to be part of the solution and make sure that we can be helpful. As we've said, you know, we are cautiously optimistic about the good clinical data so far about vaccines. And we want to make sure we can help as many people as we can around the world, as many governments as we can, to help protect as many people as we can to kind of stop this pandemic. Tal, can I come over to you for the second part of the question from Michael?

2000 helper I think makes everybody feel good about the anybody responses, but at the end of the day. The best measure of the immune response, you're getting is looked at the ability to boost after a prime that tells you that the immune even after one dose once you get the boost you can see the antibody levels you know come up quickly they come up to high.

Levels, they come up with good neutralizing activity, which is the best predictor that should you get infected the immune system will trigger again in a similar manner and that's how the immune system works I think we've had plenty of data from other infectious diseases, demonstrating that whenever you try to find a correlative protection and.

Kyle Dax: Yes, it's a great question about how the platforms are starting to stack up to each other. I think, You know, we think our data continues to be as good or better than anything anybody's recorded, both in terms of what we're able to show in neutralizing antibodies and in terms of the challenge we've given the non-human primate in the ability to completely eradicate or eliminate viral replication in both the lung and the nose. It's been nice for us to see Pfizer validating our data in a way with the BioNTech construct. Of course, we're still very curious to see what they're taking into phase two and three because, reportedly, they're taking a different construct than the one for which they've shown data.

Merck has done that with best of act years ago, and and that even the disease, where you think T cells matter more the correlative protection comes up time, and again being neutralizing anybody not pcls T cells are an adjunct sort of measure of the quality of the response when it comes to these kinds of viruses and I think the totality of the data that we've seen with.

Sars curve to in terms of all the animal models, you can passively transfer antibodies and get protection, So I think that.

There's been a lot of variability on the T. cell side in terms of people reporting F. isn't I think people trying to read into the T. Lake and assume something about the quality of the response, but to me that came more distill measure of of what matters. When you've got the most obvious proximal measure of what we think is the correlate them the thing that will translate to bear.

Which is in neutralizing antibodies, so it's a bit of a longwinded way of saying that I don't think it matters as much and certainly when you look at optimizing our platform look we know our platform is optimized to generate T cell responses, we've seen that in the cancer a T cell space, where we just do we all we do is raise cdeight positive T cells by putting income.

Kyle Dax: Hard to say very early data, but I think even though they dosed more than a thousand subjects, they showed data for 10, which they gave a prime boost to. So I'm encouraged by that data, and I hope that that's enough. I suspect that if that ends up being the case, then hopefully for all of us, you will see them sort of reach the minimal bar.

Caffeinated.

You know city at positive epitopes, we get some CD fours, but.

That is and then they function scientifically of the ability to translate the antigen from within the cell within M&A. So I don't think it would be fruitful to try and optimized to T cells.

Kyle Dax: I think any of us who've been following the field of vaccines anticipated that a recombinant protein done the right way with a strong adjuvant could be effective. I think they're certainly neutralizing anybody. The data are encouraging, and ultimately, I think the phase three results are going to be required now to really understand fully the point estimate for efficacy as well as a better understanding of the reactogenicity and safety profile of these various approaches. So in summary, I think the mRNA platforms are clearly there, with our data looking great. I think Novavax has made very nice progress. And I think the adenovectors, I hope they get there, but I think they're going to struggle to boost. And I think anybody who's done a boost or is able to show a boost as immunology would anticipate a very nice potentiation with the booster shot. Over and done.

I don't know that it matters and I wouldn't know how to do that and by the way we already have something but seems to do that based on the fundamental signs of what our platform is doing.

Let me, let me start hearing.

That's for just the from yeah. Thanks, Doug so on the on the face through pricing.

So safety of cost is really important but that would fit in Boston fall as the Splunk self regulate it also gives me.

And that would be kind of an important consideration through kind of competitive and data, especially for approval of a product. So lets you made would safety profile.

We believe that one important permit to of course is efficacy.

Because again I.

I think if he has different I mentioned that if you could see.

It's important to reach hobby many key at the population are well.

They started to see if you had it in the eyes, Oh, well received the vaccine.

Because again I appreciate the vaccine that weve, 50% efficacy.

Our vaccine was 90% and he cookie.

We'll be very different than what he means to you potentially just kept particularly in some of you getting protection on now.

And then I would say the said population I mean of costs no. He had those these what has been most t., we pockets or fall I, it's a very important operation obviously.

Michael Yee: Thank you. Thank you. The next question comes from the line of Gena Wang from Barclays; please go ahead. Thank you for taking my questions. I have two questions.

But we all look forward to looking at the time the elderly.

As we all know at least given his clubs again you know during the remarks.

Gena Wang: So the first one is regarding the phase three primary endpoint. Just wondering, how do you count infection? I think according to clinicaltrials.gov, it's basically the number of participants with the first occurrence of COVID-19 starting 14 days after the second dose. Just wondering, is there a time cutoff so that every patient will have the same time exposure? Or will you report it as an event per thousand patients? And the second question is regarding the Phase 1, Phase 2 data update, hopefully this month or next month. So, will we see a more meaningful number of convalescent serum from severe patients using PRINT, either PRINT50 or PRINT80? So, let me take those.

The elderly are very when they're able to be virus.

And so understanding you know antibody titer under think efficacy, India, Indonesia, we believe is going to being pulled them.

So no divestment, we talk about techniques group has been widely reported that somebody Phnix group you know.

He bucket very differently by the virus and so getting into the signing of that's proven study as you know we have paid a lot of attention and we talked about it.

I was happy and one of our core of only be have called the team is going.

To ensure a good representation across listings ethnic groups.

And then I would say comorbidity Easter so very important again because of who is being held the most by the these virus to understand though he ran de France called the prime commodity groups with your friend vaccine.

So as you can see I mean, there's going to be lucky seems to be if you can see picture.

Kyle Dax: I'm not sure we're going to see significantly additional data on convalescent plasma. We're gonna look at that when we report out phase two, so I think it's premature for me to say one way or another. Regarding your question on phase three, I'll make two points. The primary analysis is just the number of cases. It's not really...

Again, some public payers in some countries might be willing on out to pay for the probably because people are the Patrick I see group the private market.

I kind of a very differently to nation.

And the grant in glaciated right out of pocket to we have for actually people, having our so making very different type of decisions do you ever that mission of Crossties duration of protection, which obviously, we take time for ordering vaccine and manufacture else to really understand after last scale the clinical setting.

Kyle Dax: It's a slightly different statistical method, but you end up with the same place as I think what you're referring to as the Pfizer methodology. You will see the number of cases and then the split in those cases. And, of course, we'll describe the timeframe. In terms of counting those cases, you are correct in that the formal counting of cases where you want to see the distribution occurs 14 days after the booster shot. That's the definition of the primary endpoint.

Because you held us saying a we believe.

Like many over head of fixed got ideas of ours is not going away.

We believe is going to be a and then they meet market.

One dependent make.

He has declined over by the Devry Rachel.

Duration would be any pop in fact call as you can appreciate if a vaccine provides a one year protection Garcia snow six markets, who we have as discrete else had that will or play into the equation. So those are somewhat parkdale, that's who we kept we.

Think about again, both independent makes setting where we've said you know.

Kyle Dax: There is, however, a secondary endpoint that will look at the totality of cases that emerge once people start the trial. And, of course, I think that could be further supportive evidence, especially if infection rates are so high that we start to see some cases even in the first six weeks. The case definition for us is symptomatic disease.

Well, we make sure that or are we price or product at the big does come to value ending the endemic setting when we look at all these different product performance and rocket four seats to the combined let's we believe.

He is the most of similar price former problem.

Okay. Thanks, guys.

Thank you.

Thank you.

Next question comes from Heritage Bank from Oppenheimer. Please go ahead.

Great. Thank you for for the questions and for all the work just a couple of quick questions I'm off the topic on clinical team vaccine one is.

Kyle Dax: Again, there may be some minor variations between sponsors. I'm not sure everybody is fully harmonized to the same definition. We've been very transparent with the exact definition of our endpoints so that people can draw their own conclusions and comparisons.

Can you just over quickly de CNB phase three program the initiation the development.

When you know you'd expect that treat out and potential approval Oh pull that some product and then secondly.

Gena Wang: Thank you. Our next question comes from the line of Corey: Hey, good morning, guys. Thank you for taking my questions. Two for me as well.

You know telephone calls or Pulmonologist and treat cystic fibrosis, there seems to a lot excitement around M&A therapy for treating cystic fibrosis patients Oh I believe right now is that it could only treat a minority of those patients, but or Hong Kong or coal seemed to suggest that the treating majority of the cystic fibrosis patients could you talk a little bit too.

Corey: The first one is on pricing. I appreciate all the thought and detail that went into your prepared comment on the value proposition this morning. But I guess what I'm wondering is if we see other companies out there currently agreeing to contracts with various governments with price points that appear to range from low single digits to nearly $20 per dose, doesn't that make it inherently more difficult for you to try to charge something materially higher than that? And then my second question is probably for Kyle.

Where exactly are you would do vertex corporation. Thank you.

[music].

So let me start with the phase Threea looks to fund talk about the protect collaboration the phase three as we had previously articulated I don't think anything has changed or the trial should follow a participants for at least a couple of years it'll probably take.

Around 18 months trend role and then you wrap up the data so that sort of gives you a sense of the overall duration. We're on track to starting next year, I think what which would be obvious to everybody is a once we have a the phase two data.

Stphane Bancel: I'm wondering how difficult it is to maintain the integrity of a phase three blinded trial when you suspect a large proportion of the mRNA-1273 treated patients are expected to get common vaccination adverse events like fever and other symptomatic, and other systemic events where presumably that wouldn't happen with placebo. Does that matter much in the end, in your view? Morning, Corey.

It's going to require some regulatory interactions into phase two meeting and so forth we had gotten feedback in the past from 58 about the primary endpoints.

Which I think reassured us that it was feasible because we're looking to prevent primary infection in women of childbearing age not directly I'm looking at outcomes in babies.

Kyle Dax: So, Stphane, I'll take the first one on pricing, and then I'm sure Tyler will take the P3 question. So I think that in any discussion, Corey, many factors go into arriving at or not coming to an agreement. I would say first, the totality of the data that is available at the time of the discussions, you know, preclinical models, clinical data, again, given also that we have a platform, we have the possibility to share, you know, public information that has been shared before on other kinds of data sets. So I think data is an important one, because I do not think all products are equal. As we indicated in our remarks, and then, you know, another factor that is important is time of payment, you know, how is the risk distributed between companies that, as we discussed in our remarks, like us, have started to make products at risk. Not knowing if the 1273, in our case, will be approved or not.

At least not as part of the phase three program that being said, obviously it will require a much more detailed discussions with them on the phase three design in the dose and alignment with them prior to starting the phase three so I hope that that gives you some additional color.

Oh I can tell you my sense on vertex as a scientist I'm Super excited by the potential for M&A to you know not be limited by any particular mutation just from the fundamental signs of it but lets the phone speak to the overall status of the collaboration over.

I left to be Stephen spoke about the give any steam using other work.

I think Stephen had to jump off.

Our call.

Sorry.

Thank you so on Val Tex so as we communicated you know I think it wasn't a Q1 core.

Thank you decided to expand the collaboration we more than that on on CF.

The the joint teams discovery.

Kyle Dax: And so I think, and there are many more considerations as well. So I think when you look at the totality of the data, as we've shared, you know, we've signed a number of agreements already for potential supply in the $32 to $34 range. As we also said, you know, as volume will increase, we'll of course integrate that into the analysis. Tom, do you want to take the pre-question?

I've done a really a remarkable dropping the last few years.

In some of Dave sorry, as you can imagine.

Given you know sweater no, making the cfd our M&A is another complicated given all the things we have a dominant and the current type of a platform in the technology.

Obviously the time.

And timely Iain.

Delivery.

Well, we look fall too.

Having some some data suing them again, it's a partnership so we use of costs were line, we've got X on what do they babies are right timing.

Kyle Dax: Yes. So, Corey, it's an astute observation, and we and our partners at NIH have thought about this one long and hard. I think at the end of the day, you're right, especially after the second dose. But the first dose, probably people still won't know. After the second dose, people may intuit whether they've got the active one or not. I think the important piece here is that the endpoints are pretty hard endpoints in that I don't think that you're going to be less likely to report significant symptoms if you've got the placebo or not, and the measurement of the PCR test is a PCR test. We have put in place measures to ensure that there's no sort of quirks in the unblinding. For example, we're going to be testing by PCR everybody both on dose one and when they come in for the second dose just to make sure that if they do see some mild flu-like symptoms, they're clearly attributable to the vaccine or it is an infection, and we're not biasing by measuring more frequently in those that got

But thats palisade.

The teams on both sides I think we got back somewhat Donna I'm very excited about the progress about the plus can be here. What you would mean call patients and that will discuss you probably know if we can find that technology.

To deliver safely into the lungs m. on many of you see in it we we'd be able to use that fall over the ease of along.

And just to remind everybody vertex collaboration he's focused on the C FDR gene.

And so the other applications, we'd be don't come way down that from a commercial standpoint.

Thank you.

Great. Thank you.

Thank you.

Our next question comes from Alan Carr from Needham and company. Please go ahead.

Hi, Thanks for taking my questions.

Following on the payment.

Programs until the 19.

You mentioned before that.

These programs are still.

This is.

Because of my team.

And I'm wondering if.

Hi.

We are able to.

Still.

Just prioritizing and move forward.

Events, such as the rare disease programs.

We feel like you can still keep your eye on the ball in terms of.

Most of the.

Nine coated.

Pipeline.

Okay.

So this is Paul let me maybe take a stab at that I think the answer is absolutely, yes, and I think as evidenced by the progress that we continue to show for the rest of our pipeline we've expanded the development team quite significantly to a two.

Kyle Dax: I think beyond the first couple of days, I don't expect them to be significant symptoms in anybody, so I don't think there's going to be any biasing of any testing. In terms of the asymptomatics, we're going to look retrospectively anyway and call that based on serology, and everybody will get tested. So I think by making sure that all the objective measures are done on both arms at the same time points, we should be in pretty good shape.

Go after the cobot 19 vaccine so that I think we've got very capable teams that are pushing everything else. The fact that we continue to enroll in oncology.

It seemed a little bit of a slowdown of similar to others and be it really depends on the individual center status of the whose enabled and when to treat patients I think on the rare disease.

Corey: Okay, thank you. Appreciate the talk. Hey guys, good morning. And thanks for the questions. I just had a few.

Not only is our eye on the ball I think we've as we had alluded to in the past, we're actually using the time to kind of stepped back and.

Jeff: So what we've learned from the value of 1273 is that T-cell responses are important as are antibody titers. And so when you look at the new data today for Zika or for CMV or really anything going forward, do you think you'll place more emphasis on optimizing T-cell responses just with respect to the platform? And then just to follow up on 1273 pricing, you know, when you look at the phase three data, is there a single element that you would say justifies differential pricing, you know, be it T cell or B cell or safety profile, you know, things like that? Thank you very much. So, let me take, Jeff, the first question, and I'll let Stephane answer the second.

Engage deeper with both investigators and patience and advocates to make sure that when we do restart those programs because the kids can can finally come back in a those programs are better optimized or so that they can we can perform better in terms of recruitment and.

Analysis of data on the studies, so we're continuing to execute across all the fronts and.

I think you'll see as hopefully the pandemic procedural centers figure out how to despite so pp in social distancing to continue a restart clinical activities.

We should come back online across the board over.

Yes, I would just to add to tell it's important for a month or when you know things started to.

Well.

Look bad from a global basis, and some of the spread the Oxxos koby tool.

Kyle Dax: I think a lot of hay has been made out of T-cell responses. Look, T-cells are near and dear to my heart, being a medical oncologist. They're required to cure cancer. But I don't, I'm not quite sure they're as important to cure COVID-19, frankly. I think what they are is a measure of the quality of the response.

We spent quite a long time I would tend to February timeframe, we put ball than with the team.

To think about how do we structure of a company how do we supposed to companies with a spike so.

So that we can do books for east West very clear that.

But it all up focus and they're not here, what's going to be required.

Kyle Dax: So, if you will, the fact that we see the right kind of TH1 helper, I think makes everybody feel good about the antibody responses. But at the end of the day, the best measure of the immune response you're getting is looking at the ability to boost after a prime. That tells you that the immune system, even after one dose, once you get the boost, you can see the antibody levels come up quickly. They come up to high levels.

Two marks for the very fast space developed to compromise to safety, Paul 12 cents occurring.

But at the same time more than there has always been a platform company.

As always been in both managing risk or who are very diverse pipeline across different property carry as across different modalities all our technology.

Those on the caught up on I'll choose to Madonna and so.

It was really important for us even the inherent risk of developing a product back towards 73.

Kyle Dax: They come up with good neutralizing activity, which is the best predictor that should you get infected again, the immune system will react again in a similar manner. And that's how the immune system works. I think we've had plenty of data from other infectious diseases demonstrating that whenever you try to find a correlative protection, and, you know, Merck did that with Zostavax years ago, and that's even a disease where you think T cells matter more, the correlative protection comes up time and again as neutralizing antibody, not T cells. T cells are an adjunct sort of measure of the quality of the response when it comes to these kinds of viruses, and I think the totality of the data that we've seen with SARS-CoV-2 in terms of all the animal models, shows that you can passively transfer antibodies and get protection.

When we pretty much better now given that they thought we have seen but I'm looking back in February.

And so we are we did quite well Oxfam Bell very experienced a development professionals in can you go or whether they would get authority crockery schon.

To be able to actually Google that was one of our big challenge.

And I have to save a team as we've done a remarkable job.

Well you know pool 12 cents you pre how safe as we can as hot as we can because we know that if we did those not though.

And at the same thanks, let me quickly get on the pipeline. It has been very challenging given the love down given on our focus on safety.

Some of US that these are easier to keep rolling some of the studies because he won't being children, who wanted to make sure, especially to the children Weve a very severe disease. That's we didn't think the with to expose them to infection by going to clinical trial sites, all bear I can't give every family and so.

Sure.

We have no laid down an inch on the focus on the pipeline outside of Korea.

Great. Thanks for taking my question.

Thank you. My next question comes from George Farmer from BMO Capital markets. Please go ahead.

Kyle Dax: So I think that there's been a lot of variability on the T-cell side in terms of people reporting assays, and I think people are trying to read into the T-list and assume something about the quality of the response. But to me, that's a more distal measure of what matters when you've got the most obvious proximal measure of what we think is the correlates and the thing that will translate to benefit, which is neutralizing antibodies. So it's a bit of a long-winded way of saying that I don't think it matters as much.

Hi, good morning, Thanks for taking my question.

The price dropped by the fact that neutralizing antibody titers don't really seem to emerge until after the second boost.

Whereas.

Antibodies in general seems to be elicited after the first injection. How do you think about this I mean seems to be across the board not just with your vaccine, notably with these other vaccines and importantly, how how would such patients be treated in the phase three should they come.

Kyle Dax: And certainly, when you look at optimizing our platform, look, we know our platform is optimized to generate T-cell responses. We've seen that in the cancer T-cell space, where all we do is raise CD8-positive T-cells by putting in concatenated CD8-positive epitopes. We get some CD4s. That is an innate function scientifically of the ability to translate the antigen from within the cell using an mRNA. So I don't think it would be fruitful to try and optimize for T cells. I don't know that it matters. And I wouldn't know how to do that.

Come down as co they'd say after the first injection.

Because of not having the sufficient tighter are going into the second injection. Thanks.

Thanks, George it. So yes. It is interesting I think it kind of speaks to basic immunology, which is a if your immune system thinks it's unclear in effects and easy it doesn't tried to hard if you come back later in and basically show that no. The infection has it gone down and tries harder and that's usually manifest.

With the affinity maturation improvements in in the antibody qualities that as well as the absolute Tigers and so I suspect what you're seeing is settled manifestation of that now. The question is though what happens after just the prime yes, you don't have neutralizing antibodies, but clearly the immune system now re.

Stphane Bancel: And by the way, we already have something that seems to do that based on the fundamental science of what our platform is doing. Let me start here and transfer it to Stephane. Yep. Thanks, Todd. So, on phase three pricing... So safety, of course, is really important, but I would say it's important for us, the sponsor, for the regulators, obviously, and that would be kind of an important consideration to look at the totality of the data, especially for approval of a product. Assuming a good safety profile, we believe that, you know, one important parameter, of course, is efficacy. Because, again, I think efficacy has different dimensions. There's efficacy that is important to reach herd immunity at the population level, but there is so much you can see if you look at it in the eyes of whoever received the vaccine. And then I would say the subpopulation.

Act differently once its these be ampligen, because you get to boost.

And so it's an interesting question well what happens if the boost happens not with the vaccine, but with the natural infection.

I would suspect based on sort of first principles that you should see some benefit you probably not the full benefit you would see if you get infected after the boost but just by nature of the boost boosting you would expect that an infection would also boost in the sense that the immune response would react quicker and more vigorously.

And maybe you won't prevent infection and maybe you want even prevent.

Disease, but hopefully you would prevent the more severe manifestation of disease because disease at least as we understand it in the first phase here is a balance between your immune response and clearing the infection.

So it'll be very interesting I think both for us and for other platforms that use a prime boost to do that secondary analysis of understanding whether we've seen any cases in that first month or six weeks and what the distribution of cases are between placebo and.

Stphane Bancel: I mean, of course, no, healthy adults are what has been mostly reported so far. It's a very important population, obviously. But we all look forward to looking at the data on the elderly. As we all know, as Stephen described again during the remarks, the elderly are very vulnerable to this virus. And so understanding, you know, antibody titer, understanding efficacy in the elderly, we believe is going to be important. External diversity, we talk about ethnic groups; it has been widely reported that some ethnic groups are impacted very differently by the virus. And so getting an understanding of that from a study, as you know, we have paid a lot of attention to it, and we talked about it recently on one of our calls about all the effort that the team is going through to ensure good representation across ethnic groups.

And your your you are treated the last piece I'd say that I think are also gives me. Some hope here is the non human primate were single dose in the non human primates can or at least the mouse models.

They expand within non human primate is ongoing but the in the and the mouse models, we clearly see that even though.

You don't see you don't measure the neutralizing antibodies just yet you are already able to limit borrower abrogate borrower application in the logs and so.

I think that gives you a sort of.

Immunological read out on the phenomenon describing over.

Okay, and then along those lines do we have a view on durability yet following these fall in both the non human primates and maybe the my mice. If they live long enough you have a sense for how durable the vaccine effect could be.

Yeah.

Stphane Bancel: And then I would say comorbidity. It is very important, again, because of who is being hurt the most by this virus, to understand the difference between different comorbidity groups for different vaccines. So as you can see, I mean, there's going to be a lot of pieces to very quickly picture. Again, some public payers in some countries might be willing or not to pay for different efficacy for different efficacy groups; the private market might have a very different inclination. And again, in places where it's out of pocket, you will potentially have people making very different types of decisions.

I do not I would make a two points on that first I don't think any of US yes, I understand your ability.

What is emerging is that if you have a mild infection, you're more likely to have lower level of antibodies and they're more likely to wane that kind of goes with the quality of immune responses. I described previously it's also I mean, let's not mistake the ability to measure anybody's overtime as the synacor none of having.

A memory and an immune response right otherwise by the time, you, where my age you'd be walking around with your blood. They can clotting with antibodies against every infection you've ever seen in yet I am immune to many things that you are not going to necessarily see high levels of neutralizing antibodies in my blood, it's more about the memory b cells in the persistence I think that initial level of neutralizing antibodies.

Stphane Bancel: The other dimension, of course, is duration of protection, which obviously will take time for all the vaccine manufacturers to really understand at large scale in the clinical setting. But as you heard us say, you know, we believe, like many other health experts, this virus is not going away. We believe there is going to be an endemic market once the pandemic is declared over by the WHO. Duration will be an important factor. As you can appreciate, if a vaccine provides one year of protection versus six more, versus three years, versus four years, that will all play into the equation. So those are some of the factors that we will carefully think about, again, both in the pandemic setting, where we said, you know, we'll make sure that we price a product at a big discount to value, and in the endemic setting, where we look at all these different product performance and market forces to determine what we believe is the most optimal price for the product.

What gives us the confidence that we've got the right quality of the response in the magnitude is at higher higher than what you can see with the disease with real infection and convalescent plasma.

No all that being said I think is obviously reassuring to see the quality of a response by maintaining high neutralizing antibodies I think if you look at what the platform is able to induce.

It's pretty evident from the CMV data I described earlier this morning that certainly in that instance, with a third boost or at six months, you know look out to a year and you see levels that are still higher than than what you had targeted.

I think as it all boils down to the utilization in the context of a pandemic here. If what we have is 12 months of durability I think that's a great starting point for us to start protecting the population and we'll worry about what happens in year, two three and four when we get to 2020 to 2023 on the other side of this pandemic.

Stphane Bancel: Okay, thanks guys. Thank you. Great. Thank you for the questions and for all the work.

Okay.

Okay. Thanks Tal.

Thank you.

Last question comes from Miami for Uh Huh.

Please go ahead.

Stphane Bancel: Just a couple of quick questions on the topic of COVID-19 vaccine. One is, can you just go over quickly the CMV phase 3 program, the initiation, the development, and when you'd expect that to read out and potential approval for that sort of product? And then secondly, in some of our calls with pulmonologists that treat cystic fibrosis, there seems to be a lot of excitement around mRNA therapy for treating cystic fibrosis patients. The belief right now is that it could only treat a minority of those patients, but our calls seemed to suggest that it could treat a majority of those patients.

Hi, guys. Thanks for taking my question.

A couple from me one quick one from an investor could you lay out the economics you guys receives on a commercial vaccine how to think about percentages paid out to academic partners that any NIH commercially on economic interest et cetera.

Breaking it out as we try to understand what unit margin might be.

And then secondarily as we look at pricing it's been commented by coal people here.

Couple of analysts regarding pricing in the low single digits to up to just below $20. For example in larger volume contract. It sounds like we should think as somewhere in that range as par for larger contracts for you guys. During the pandemic, but as you talk about the endemic environment.

Kyle Dax: Could you talk a little bit about that and where exactly you are with your Vertex collaboration? So let me start with phase three. I'll let Stephane talk about the Vertex collaboration. Phase three, as we had previously articulated, I don't think anything has changed. The trial should follow participants for at least a couple of years. It'll probably take around 18 months to enroll, and then you wrap up the data.

And potentially higher pricing could you laid out how you expect to realize that pricing set up where demand will likely decline as the severity of cobot 19th impact globally is reduced during an endemic versus a pandemic period.

Kyle Dax: So that sort of gives you a sense of the overall duration. We're on track to start next year, but I think what should be obvious to everybody is once we have the phase two data, it's gonna require some regulatory interactions at the phase two meeting and so forth. We had gotten feedback in the past from SBA about the primary endpoint, which I think reassured us that it was feasible because we're looking to prevent primary infection in women of childbearing age, not directly looking at outcomes in babies, at least not as part of the phase three program. That being said, obviously, it will require much more detailed discussions with them on the phase three design and the dose and alignment with them prior to the start of phase three. So I hope that it gives you some additional color.

In that setting, where perhaps a half dozen or more vaccines being commercialized by large established players with commercial experience and tender markets such as these.

We will be actively competing on price and volume. So if you go out how you expect to substantially increase or realized price in that setting those increased competition increased supply and reduced demand that will be really helpful. Thank you.

Thanks, Good morning, good stuff on it. So for this person is wouldn't be quick because we're not disclosing you know we need to marketing product.

On the academic market.

The only as as we said you know remarks.

The quality of.

Dynamics I've only been pulled out.

We continue to believe that when you look at it does that give a data not funny across 12 70 throughput to cross Trust 73 to date, that's public and they're on the platform that you know it because he's going to be any potential crime et cetera.

Kyle Dax: I can tell you my sense on Vertex. As a scientist, I'm super excited by the potential for mRNA to, you know, not be limited by any particular mutation just from the fundamental science of it. But I'll let Stephane speak to the overall status of the collaboration. I'll let maybe Stephen talk about it given his team is doing all the work. I think Stephen had to jump off our call.

We have hired people right and we continue to help you putting the commercial world that comes from loud established vaccine playoff whoever relationship we've gotten manuscript relationship Weve before in the channel and so we believe that we should be able to establish a good commercial presence.

Based on the performance of a product.

Great and as a follow up when you when you see you've talked a couple of things about the Cdeight T cell response T cell biology, I'm just to clear up the comment that youve across your platform you've shown effective T cell response that was direct.

Stphane Bancel: Yeah, sorry. Thank you. So on Vertex, as we've communicated, you know, I think he was on a Q1 call where Vertex decided to expand the collaboration with Moderna on CF. The joint team's discovery has done a really remarkable job in the last few years in terms of delivery. As you can imagine, given you know us well, making a CFTR mRNA is not that complicated given all the things we have done and the current state of the platform and the technology.

Acted regarding construct senior cancer portfolio right.

Not at this particular vaccine, we haven't seen a CD a T cell response.

Are there any measurable level as described in your non human primate or human disclosures. Thus far you were talking to cancer vaccines right Youre talking about any prophylactic vaccines. So I guess Cdeight T cell response here.

Stphane Bancel: It is obviously the challenge entirely in delivery. We look forward to sharing some data soon. Again, it's a partnership, so we need, of course, to align with Vertex on what they believe is the right timing. But as Kyle said, the teams on both sides, I think Vertex and Moderna are very excited about the progress, about the possibility of what it will mean for patients. And as we discussed before, you know, if we can find the technology to deliver mRNA safely into the lungs, obviously, we will be able to use that for other diseases of the lungs. And just to remind everybody, the Vertex collaboration is focused on the CFTR gene, and so the other applications will belong to Moderna from a commercial standpoint. Thank you. Great, thank you. All right, thanks for taking my question. Programs Other Than COVID-19

So this is Paul that is correct, although I have to go back because we did disclose some T cells for CMB I don't recall, whether they were city it or subsidy for frankly after talking to my head.

Yeah.

Awesome. Thanks, Tal Thanks for cracking me that that's really helpful.

Thanks, taking the questions guys.

Pleasure.

Thank you.

I show no further questions in the queue at this time on like on the call over to Stefan on cell CEO for closing remarks.

Thank you very much everybody for joining today I stay safe and we speak soon.

Thank you ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.

[music].

Kyle Dax: You know, you mentioned before that enrollment in a few of these programs is still... Paused or suspended because of COVID-19. I'm kind of wondering if, And if you're able to, get prioritized and move forward some of their programs, such as the rare disease program, Do you feel like you can still keep your eye on the ball in terms of the rest of the non-COVID pipeline? So this is Paul. Let me maybe take a stab at that.

Kyle Dax: I think the answer is absolutely yes. And I think it's evidenced by the progress that we continue to show for the rest of our pipeline. We've expanded the development team quite significantly to go after the COVID-19 vaccine so I think we've got very capable teams that are pushing everything else. The fact that we continue to enroll in oncology has seen a little bit of a slowdown, similar to others. And we, it really depends on the individual center status of who's enabled and when to treat patients. I think on rare diseases, not only is our eye on the ball, but we're actually using the time to kind of step back and engage deeper with both investigators and patients and advocates to make sure that when we do restart those programs, because the kids can finally come back in, those programs are better optimized so that they can perform better in terms of recruitment and Analysis of Data on the Study.

Kyle Dax: So we're continuing to execute across all the fronts, and I think you'll see as, hopefully, the pandemic recedes or as centers figure out how to, despite PPE and social distancing, continue or restart clinical activities, then we should come back online across the board. Yes, and maybe just to add to Tyler's important comment when things started to look bad from a global basis in terms of the spread of SARS-CoV-2. We spent quite a long time, I would say in the February time frame, with the board and with the team, thinking about how do we structure the company? How do we resource a company?

[music].

Stphane Bancel: so that we can do both. It was very clear that. A lot of focus and energy was going to be required to march at a very fast pace without compromising safety for 1270 frames. But at the same time, Moderna has always been a platform company. It has always been about managing risk, through a very diverse pipeline across different therapeutic areas, across different modalities or technologies for those on the call that are not used to Moderna. And so it was really important for us, given the inherent risk of developing a product at 1273. Again, we feel much better now given the data we have seen, but I'm talking back in February. And so we recruited quite a large number of very experienced development professionals in clinical regulatory and clinical operations to be able to actually do both. That was one of our big challenges.

Stphane Bancel: And I have to say the team has really done a remarkable job of pushing 1273 as safely as we can, as hard as we can, because we know that every day does matter. And at the same time, we continue to execute on the pipeline. It has been very challenging, given the lockdown and our focus on safety. However, some of the studies were easier to keep rolling. Some of the studies, because they involve children, we wanted to make sure, especially those are children with very severe diseases, that we didn't take the risk to expose them to infection by going to clinical trial sites or their caregivers, their families, and so. We have not laid down an inch on the focus of the pipeline outside of COVID.

Stphane Bancel: Hi, good morning. Thanks for taking my question. I'm quite struck by the fact that neutralizing antibody titers don't really seem to emerge until after the second boost, whereas antibodies in general seem to be elicited after the first injection. What do you think about this?

Kyle Dax: I mean, it seems to be across the board, not just with your vaccine but with these other vaccines. And importantly, how would such patients be treated in phase three? Should they come down with COVID, say, after the first injection because of not having a sufficient titer going into the second injection? Thanks. Thanks, George. It's Paul.

Kyle Dax: Yes, it is interesting. I think it kind of speaks to basic immunology, which is, if your immune system thinks it can clear an infection easily, it doesn't try too hard. If you come back later and basically show that no, the infection isn't gone, then it tries harder. And that usually manifests with affinity maturation improvement in the antibody qualities, as well as the absolute titers. And so I suspect what you're seeing is a subtle manifestation of that. Now, the question is, though, what happens after just the primes?

Kyle Dax: Yes, you don't have neutralizing antibodies, but clearly the immune system now reacts differently once it sees the antigen because you get the boost. And so it's an interesting question. Well, what happens if the boost happens not with the vaccine, but with the natural infection? Because disease, at least as we understand it in the first phase here, is a balance between your immune response and clearing the infection. So it'll be very interesting, I think, both for us and for other platforms that use a Prime Boost to do that secondary analysis of understanding whether we've seen any cases in that first month or six weeks and what the distribution of cases are between placebo and.., and you're treated. The last piece I'd say that I think also gives me some hope here is the non-human primate where a single dose in the non-human primate can, or at least the mouse models, the experiment with the non-human primate is ongoing, but in the mouse models we clearly see that even though you don't see, you don't measure the neutralizing antibodies just yet, you are already able to limit viral or abrogate viral replication in the lungs.

Kyle Dax: And so I think that gives you a sort of an immunological readout on the phenomena I'm describing. Okay. And then along those lines, do we have a view on durability yet? I mean, following these, following both the non-human primates and maybe the mice, if they live long enough, do you have a sense for how durable the vaccine effects are? Yeah, I do not. I would make two points on that.

Kyle Dax: First, I don't think any of us yet understand your ability. What is emerging is that if you have a mild infection, you're more likely to have lower levels of antibodies, and they're more likely to wane. That kind of goes with the quality of the immune response that I described previously. It's also I mean, let's not mistake the ability to measure antibodies over time as the sine qua non of having a memory and an immune response, right? Otherwise, by the time you were my age, you'd be walking around with your blood thick and clotting with antibodies against every infection you've ever seen. And yet, I am immune to many things that you are not necessarily going to see high levels of neutralizing antibodies in my blood. It's more about memory, B cells, and persistence. I think that the initial level of neutralizing antibodies is what gives us the confidence that we've got the right quality of the response, and the magnitude is as high or higher than what you can see with disease with real infection and convalescent plasma.

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Kyle Dax: Now, all that being said, I think it's obviously reassuring to see the quality of a response by maintaining high neutralizing antibodies. I think if you look at what the platform is able to induce, it's pretty evident from the CMB data I described earlier this morning that certainly in that instance, with a third boost at six months, you know, look out to a year, and you see levels that are still higher than what you had targeted. I think as it all boils down to utilization in the context of a pandemic here, if what we have is 12 months of durability, I think that's a great starting point for us to start protecting the population, and we'll worry about what happens in year two, three, and four when we get to 2022, 2023 on the other side of this pandemic.

Kyle Dax: Over and done. Okay, thanks, Paul. Thank you. Hey guys, thanks for taking the time to ask a question. A couple from me and one quick one from an investor. Could you lay out the economics you guys would receive on a commercialized vaccine, how to think about percentages paid out to academic partners, any NIH commercial economic interests, etc. Just breaking it out as we try to understand what the unit margin might be. And then secondarily, as we look at pricing, it's been commented by a couple people here, a couple analysts regarding pricing in the low single digits to up to just below $20, for example, in larger volume contracts, it sounds like we should think as, As you talk about the pandemic environment and potentially higher pricing, could you lay out how you expect to realize that pricing in a setup where demand will likely decline as the severity of COVI So if you could lay out how you expect to substantially increase your realized price in a setting of increased competition, increased supply, and reduced demand, that would be really helpful.

Unknown Attendee: So this first one is going to be quick because we are not disclosing, you know, unit margin per product. On the endemic market, clearly, as we said in our remarks, the competitive dynamics are going to be important.

Stphane Bancel: We continue to believe that when you look at the totality of the data, not only across 1273 but across 1273 to date, that's public, and around the platform, that, you know, efficacy is going to be an important parameter. You know, we've hired people, and we continue to have people in the commercial world that come from large established vaccine players, who have relationships with governments, who have relationships with people in the channel. And so we believe that we should be able to establish a good commercial presence based on the performance of the product.

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Stphane Bancel: Great. And as a follow-up, when you talked about a couple things about the CD8 T cell response, T cell biology, just to clarify the comment that across your platform, you've shown an effective T cell response that was directed regarding constructs in your cancer portfolio, right? And not this particular vaccine, where we haven't seen a CD8 T cell response of any measurable level as described in your non-human primate or human disclosures thus far. You were talking about cancer vaccines, right? You weren't talking about any prophylactic vaccines.

Kyle Dax: So I guess CD8 T cell response here. So this is Paul, that is correct. Although I have to go back because we did disclose some T-cells for CMV. I don't recall whether they were CD8 or just CD4, frankly, off the top of my head.

Kyle Dax: Yeah. Awesome. Thanks, Tal. Thanks for correcting me there.

Kyle Dax: That's really helpful. And thanks for taking the questions, guys. It's a pleasure. Well, thank you very much, everybody, for joining us today. Stay safe, and we'll speak soon.

Operator: Ladies and gentlemen, this concludes today's conference call. ??? ??? ??? ???. .. .. .. .. [inaudible] ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ?? ?? ?? ?? Thank you for watching!