Q4 2020 Moderna Inc Earnings Call

Good morning, and welcome to <unk> fourth quarter 2002 on a conference call.

Operator: and welcome to Moderna's fourth quarter 2020 conference call. At this time, all participants are in a listen only mode.

At this time all participants are in a listen only mode.

Operator: Following the formal remarks, we will open the call up for your questions. Please be advised that the call is being recorded. At this time, I would like to turn the call over to Lavina Talukdar, Head of Investor Relations at Moderna. Please proceed. Thank you, operator. Good morning, everyone.

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

At this time I would like to turn the call over to let's say not until the debt Carr head of Investor Relations at mature enough. Please proceed.

Thank you operator, good morning, everyone and thank you for joining us on today's call to discuss <unk>. During this fourth quarter and full year, 'twenty 'twenty financial results and business updates.

Lavina Talukdar: And thank you for joining us on today's call to discuss Moderna's fourth quarter and full year 2020 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 CEO; David Moline, our CFO; Stephen Hoge, our President, and Tal Zaks, our Chief Medical Officer.

You can access the press release issued this morning as well as the slides that we'll be reviewing by going to the investors section of our website.

On today's call are Stephane Bombshell, our C E O.

David Levine our CFO.

And hope, our president and towels ask our Chief Medical Officer.

Lavina Talukdar: Before we begin, please note that this conference call will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see slide 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 in this call as a result of new information or future results or developments.

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

See slide two of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward looking statements.

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.

Lavina Talukdar: On slide 3, please see the important indications and safety information for our COVID-19 vaccine, which has been authorized for emergency use in the United States and many other countries around the world. With that, I will now turn the call over to Stephane.

On slide three please see the important indication and safety information for our COVID-19 vaccine, which has been authorized for emergency use in the United States and many other countries around the world.

With that I will now turn the call over to Stephane.

Stphane Bancel: Thank you, Lavina. Good morning or good afternoon, everyone. I hope all of you and your loved ones are in good health.

Thank you Laura.

Good morning, or good afternoon, everyone.

I hope on all of you and your loved ones are in good health.

Stphane Bancel: Thank you for taking the time to join our Q4 2020 call. During the call, we propose to start first by looking back at fiscal year 2020 and then look to fiscal year 2021. For Fiscal Year 2020, I will share a few slides to summarize the key elements of the year before David shares with you the 2020 financials and also how we think about the 2021 financial framework. For Fiscal Year 2021, I will share our business objectives and why we are so excited for 2021 and the inflection point this year will represent in our history. We will start with an update on our approach to variants of concern, and then I will provide an update on our clinical pipeline.

Thank you for taking the time to join up Q4, 'twenty 'twenty Court.

Well recall, we proposed to stop apparel by looking back to fiscal year 'twenty.

And then looking from fiscal year 2021.

For fiscal year, 'twenty 'twenty I wish I have a few slides to summarize the key elements over a year before David shared with you the 20th like your financial and the Russell.

How do we think about 'twenty 'twenty, one financial framework.

What does Kelly, that's what she's Lucky Juan I wish our business objective and why we are so excited about what we think Q1 and the inflection point. This year, we work with them you know history.

You bet and we start to wind up date on our approach to volume from sale and then that would provide on a date on that.

Clinical pipeline.

Stphane Bancel: 2020 was a historic year for Moderna. We started in January as an early stage development company. By the end of July, we had become a late-stage development company, and by December, we had positive results from our phase 3 COVID study of our COVID-19 vaccine, showing efficacy around 94%. Our COVID-19 vaccine was authorized by the FDA and Canada Health in mid-December, and we shipped almost 18 million doses to the U.S. government and the Canadian government via, We laid the groundwork for a global organization adding commercial subsidiaries in eight countries.

So what it was he was a historic you up on medallion.

We started in January as an early stage to give it up on company.

By the end of July we had become a late stage development company and by December We had positive results from all phase III study on COVID-19 vaccine showing gets it gets you around 94%.

While COVID-19 vaccine it was authorized by the FDA and Canada had in mid December and we shipped almost 18 million buildings to be you must go on net and the kind of didn't go on and that's about yeah.

We laid the groundwork for Bluebird organization, adding commercial subsidiaries in eight countries.

Stphane Bancel: By your end, we have signed $11.7 billion in advance purchase agreements for the vaccine. A team of a little over a thousand members did all that, and we also continue to invest in science to improve our mRNA platform further, and we have advanced more than 20 programs in development across five therapeutic areas, and we did it without the large global pharmaceutical pump. The Moderna team executed swiftly and superbly in carrying out the complicated phase 3 study while achieving remarkable diversity.

And we have signed 11 points they've been billions of dollars of advance purchase of Sacramento a vaccine.

T Mobile you said it'll go farther on net barrels need all of that.

And we also continued to invest in science to improve per barrel on them on the platform.

And where does the advanced more than 20 programs in development across five therapeutic areas.

And when he did without the logs on the ball from Mr called partner.

The model that team executives swiftly and she probably in carrying out the complicated price squeeze study what actually you think remarkable divestiture.

Stphane Bancel: The Moderna team secured the authorization of the COVID-19 vaccine by regulators, and they built out our manufacturing capacity, scaling up across many manufacturing processes, partnered with Lonza, Rovi, and Catalan. Reuters, Chris Hickman, Michael Klinger, Dan Bell, Geoffrey Meacham, Michael Yee, Harold B. Miller, David B. Bee, Gail Smith, Ryan H. B.

But more on that team secured the authorization of a COVID-19 vaccine by regulators.

We're not a team built out our manufacturing capacity scaling up across many manufacturing processes.

Belongs on Ravi and cut the line.

And she of course excuse me on those is probably on.

For context, we estimate less than 100000 on Bill's ease of medicine in 2019.

Stphane Bancel: B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B. B.

Stphane Bancel: For context, we had made less than 100,000 doses of medicine. (Inaudible) It was roughly a 200 times increase in 12 months, and we're on our way to producing as many as 1 billion doses in 2021 and more in 2020. In 2019, we had no authorized product. We had negative cash flows from operations every quarter, and we anticipated needing multiple capital arrays over at least five years until CMB produced sufficient revenues for Moderna to break even in terms of cash flows and become a self-sustaining company.

This was real Fitzwater time, Inc, Crazy and treadmills and.

And we're on our way to produce as many as 1 billion, though these people can see Juan.

In mall in 'twenty 'twenty two.

In 2019, we had no price product.

We had negative cash flow from operations every quarter.

And we anticipated needing multiple capital Rodriguez over at least five year low D to C. N V will produce 2% revenues from without too broke you about in terms of cash flows and become a self sustaining company.

Stphane Bancel: In 2020, we had our first product approved and our first product revenues in the last two weeks of June. We had two quarters of positive cash flows from operations. We ended the year with a strong balance sheet and cash generation in two quarters. My life has been changed forever. I've been changing in a profound way.

In 2020, we had the sales product alright.

So our first product revenues in the last two weeks of pupil.

We had two quarters of positive cash flows from Croatia weighted.

Good day yoga strong balance sheet, and with cash generation I need to call sales.

More than that has been changed forever.

One on that had been changing the profile on the way.

Stphane Bancel: Moderna is now a commercial company with subsidiaries in eight countries and a direct presence in many more through commercial distributors and partners. MRNA is an information... We have a scalable platform due to our investment in IT, robotics, and AI over the last seven years. We have an amazing team, as you witnessed by what the team accomplished in the 12 short months of 2020, and we have capital to invest in and scale.

Although not as a commercial company, we have subsidiaries in eight countries and a direct presence in many more from commercial is resolved in pulp mills.

I'm on nasal any information on molecule.

We have a powerful platform and this is just the beginning.

We have a scalable platform due to our investment in robotics in the last seven years.

We have an amazing team as you witnessed by what the team accomplished 12 swap multiple on 2020.

And we have a capital to invest and scale.

Stphane Bancel: On slide six, you have a summary of countries in which we received emergency use authorization or conditional approvals and all the submissions that we did. On slide seven, you get a sense of the commercial infrastructure that we built. For Context, in May of 2020, we did not have a single employee dedicated to commercial activities.

On slide six shows a summary of the countries in which we received.

The emergency use authorization on conditional approvals.

And all the stuff that submission that with you.

On slide seven you get the sense for the commercial infrastructure that we've built.

For context in May of 2020 or more.

Well that did not have a single employee dedicated to commercial activities.

Stphane Bancel: We close the year with eight commercial subsidiaries, an incredible commercial team, and commercial partners. We now have commercial operations in the US, in Canada, and in Europe in the five largest markets, Germany, France, Italy, Spain, and the US. We established Monera Switzerland, where we have both commercial capabilities to serve the Swiss market, as well as manufacturing for geographies outside the US with our partner London, and the support team that we need in finance, HR, digital, and liquid.

We closed the year with eight commercial subsidiaries and the quality of our commercial team and commercial partners.

We now have commercial operations in the U S income.

Oh yeah.

In Europe, and the five largest market, Germany, France, Italy, Spain and the cash.

We establish wanted to Switzerland, where we are both commercial capabilities to serve the Swiss market.

As well as manufacturing or geographies outside the U S. We bought popping out on top.

And the support teams that we need you to finance, a child digital and equal.

Stphane Bancel: We are partnered with Medicine in Israel and with Takeda in Japan. If you step back and think about it, this commercial network, which we started building and will expand in 2021, is an incredible asset for the entire Moderna pipeline. We now have the infrastructure to commercialize all our products. These markets on the slide are some of the largest markets in the world.

We have partnered with medicine in Israel.

In Japan.

If you step back and think about it these commercial network, which we started building and will expand in 2021 is an incredible asset for the entire Madonna pipeline.

We now have the infrastructure to commercialize all of I'll call them.

These market on the slides on some of the largest markets in the world.

Stphane Bancel: By building the commercial network for the launch of our COVID-19 vaccine and deciding not to partner, we have actually financed and built the commercial network for all of our programs. We have become a fully integrated company and, in 12 months, proved that we are capable of running complex phase 3 studies, scaling up manufacturing to commercial level, making hundreds of millions of doses per year, and building our own commercial network. As I said, the Moderna team did an amazing job in 2020.

So by basically the commercial network of a launch of a COVID-19 vaccine.

And deciding not to path now we are actually financing the commercial network for all of our programs.

We have become a fully integrated company and its weighted most probably that's about paperboard are already complex phase III studies scanning growth manufacturing commercial level, making hundreds of million of those used car, yeah and bidding on conventional network.

I'd like to take them on that team did an amazing dropping 25 day.

Stphane Bancel: On slide 8, you get a glimpse of what Moderna looks like in February 2021, and why most people in the world think of Moderna as a COVID-19 vaccine company. This is just the first product that we are launching. We have a platform, and our molecule mRNA is an information molecule. This is just the beginning.

On slide that you get a glimpse of what model on that looks like in February 12th like you Juan.

While most people in the world think of more than that as a COVID-19 vaccine company. It is.

Just the first product that we're launching.

We are a platform and don't want acute on Monday is there any information on what is true.

This is just the beginning.

Stphane Bancel: We are going to soon start a phase 3 study for a vaccine against CMV, Cetomegalovirus, the number one cause of birth defects. There is no approved CMV vaccine on the market. The pharmaceutical industry has tried for around 20 years to make a vaccine against CMV. This is a complex virus of 6 mRNAs per dose, several of which are from a complex protein called the pentamere. We believe that the CMV vaccine will present potential annual peak sales between $2 and $5 billion.

We're going to soon start a phase III study for vaccine against CMV. He told me that all virus the number one cause of birth defect.

There is no approved CMV vaccine on the market.

The pharma industry are striped polo on <unk> to make a vaccine against <unk>.

This is a complex virus vaccine about six amount has drilled those travel which up to from a complex protein called blueprint on man.

We believe the CMV vaccine will presents potential annual peak sales.

Two and five billions at all.

Stphane Bancel: We have pre-programmed in Phase 2 a personalized cancer vaccine in melanoma, Oxford TLAGant in ovarian cancer, and VEGF injected into patients' hearts cause a heart attack to revascularize their hearts with new blood vessels. We have had 12 positive, phase one without.

We have three programs in phase two our personalized cancer vaccine in melanoma, but looks mostly like getting into very intense, though and be injected into patients help gross profit back. So we rescue lies the hall with new blood vessels.

We have had twice for the phase one readout.

Stphane Bancel: In addition to our COVID-19 vaccine, we have 80 infectious disease vaccine candidates, all for first-in-class vaccines, like against CMV, or what we believe could be a best-in-class vaccine, like with influenza. But we also have a remarkable therapeutic pipeline. We have candidates for athletics in immuno-oncology with five medicines in the clinic, four in rare disease programs, two cardio programs, and two autoimmune disease programs. If you think about it, Moderna is going after the four leading causes of death by disease area. Infectious diseases, cancer, cardiovascular disease, autoimmune diseases. The total admissible market is very low.

In addition to our COVID-19 vaccine, we have ATM fixture to use vaccine candidates.

Our first in class vaccines.

Against CMV or what we believe could be a best in class vaccine that you true and so.

But we also have a remarkable for our project pipeline.

Candidate profit in immuno oncology with five minute assumes mechanic falling rather use program to cardio program and two autoimmune disease programs.

If you think about it's Mark I'll, just bring up the quality and cost of debt by disease area infectious disease cancer cardiovascular disease autoimmune diseases.

This will talk about simple market is very low.

Stphane Bancel: We are not a COVID-19 vaccine company. Instead, we're investing in science and leveraging our scalable platform to take more candidates from our research labs to clinical development soon. So stay tuned for that. Yesterday, we announced that we are increasing our base manufacturing plan for the number of COVID-19 doses we will produce in fiscal year 2021 from 600 million to 700 million doses, given the strong start of our U.S. operation and initial ramp of our outside the U.S. operation. Our team is still working hard to get us up to $1 billion for Fiscal Year 21. Now, let me turn to David for the Q4 and fiscal year 2021 financial framework. David

We are not a COVID-19 vaccine company.

We're investing in science and leveraging our scalable platform.

Both on the data from our research lab to clinical development, so stay tuned for that.

We announced yesterday that green cuisine called based manufacturing plant from a number of COVID-19 goes we'll produce in fiscal year 'twenty don't you Juan from 6 million to 700 million doses given the strong start of our U S operations and initial ramp of all outside the U S operations.

Our team is still working hard to get us up to 1 billion growth for fiscal year 'twenty one.

Now, let me turn to David for Q4, and as Kelly absolutely. Thank you Juan financial framework David.

David Moline: Okay, thank you, Stephane. Before reviewing the financial section of the slide deck, I want to comment on the approach we take in sharing this information. This starts with the three C's, these being clear, complete, and comprehensible.

Okay. Thank you Stephane.

Before reviewing the financial section of the slide deck I want to comment on the approach we've taken sharing this information.

This starts with the three CS is being clear.

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David Moline: Today we are presenting our results primarily on a U.S. Gap basis. At an individual item level, in some cases, we also provide additional detail to provide greater clarity on underlying trends and to facilitate period over period comparison, in line with a three seed goal. Reflecting the continued uncertainties related to the course of the evolving pandemic, along with the many challenges and opportunities we face as a newly globalizing commercial company, we also seek to avoid implying an unrealistic level of precision concerning future financial projections in the face of a range of outcomes.

Today, we are presenting our results primarily on the U S GAAP basis.

An individual item level in some cases, we also provide additional detail to provide greater clarity on underlying trends.

To facilitate period over period comparisons in line with the pre Seagull.

Reflecting the continued uncertainties related to the course of the evolving pandemic.

With the many challenges and opportunities we face as a newly globalizing commercial company. We also seek to avoid employing an unrealistic level of precision.

Concerning future financial projections in the face of a range of outcomes.

David Moline: With this in mind, we are providing today the analysis of actual 2020 results, along with a view of key drivers of the financial framework going forward. We will continue to update and refine this information as business evolves. Turning to slide 10.

With the spectrum, we are providing today the analysis of actual 2020 results.

Along with a view of key drivers of the financial framework going forward.

We will continue to update on refined this information is business Ebola.

Turning to slide 10.

David Moline: I want to briefly remind you about some key accounting changes, which we presented on this slide in our Q3 call in October. As a result of the successful transition to a commercial company following the emergency use authorization by the FDA and Health Canada in December 2020. We began to record product sales. We also began to capitalize inventory based on the expectation that these costs would be recoverable through commercialization of our COVID-19 vaccine, as opposed to expensing costs directly to R&D in the period incurred.

On a briefly remind you about from key accounting changes, which we presented on this slide in our Q3 call in October.

As a result of the successful transition to a commercial company following the emergency use authorization by the FDA and health Canada in December 2020, we.

We began to record product sales. We also began to capitalize inventory based on the expectation. These costs would be recoverable through commercialization of our COVID-19 vaccine as opposed to expensing cost directly to R&D in the period incurred.

David Moline: And we also began to capitalize purchases of property and equipment and long-term lease assets as opposed to expensing costs in the period incurred due to the lack of alternative use.

And we also began to capitalize purchases of property and equipment and long term lease assets as opposed to expensing costs in the period incurred due to the lack of alternative views.

With this context, let me turn now to slide number 11.

David Moline: Total revenue was $571 million for Q4 2020 compared to $14 million for the same period in 2019. Total revenue was $803 million for the full year 2020, compared to 60 million in the prior year. Following the authorization for emergency use by the FDA and Health Canada in December of our COVID-19 vaccine, we generated our first ever product sale.

Total revenue was $571 million for Q4, 2020 compared to $14 million for the same period in 2019.

Total revenue was $803 million for the full year 2020.

Compared to $60 million in the prior year.

Following the authorization for emergency use but the S. P. A and health Canada in December of our COVID-19 vaccine, we generated our first ever product sales for 2020, we recognized $200 million of product sales for COVID-19 vaccine all in late December.

David Moline: In 2020, we recognize 200 million of product sales for a COVID-19 vaccine all in late December. Additionally, grant and collaboration revenue increased to $371 million in Q4 and $603 million for the full year, primarily due to increases in grant revenue from BARDA to accelerate the development of our COVID-19 vaccine. Now turning to cost of sale. We began capitalizing our COVID-19 vaccine inventory costs in December, starting after the vaccine was first authorized, based upon our expectation that these costs would be recoverable through commercialization of the vaccine.

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Additionally, grants and collaboration revenue increased to $371 million in Q4.

And $603 million for the full year.

Primarily due to increases in grant revenue from BARDA to accelerate development of our COVID-19 vaccine.

Now turning to cost of sales.

We began capitalizing our COVID-19 vaccine inventory costs in December starting after the vaccine was first authorized based upon our expectation that these costs would be recoverable through commercialization of the vaccine.

David Moline: Prior to the authorization of our COVID-19 vaccine, inventory costs were recorded as research and development expenses in the period incurred. We expensed $242 million of pre-launch inventory costs in 2020. Hence, our cost of sales was only $8 million in 2020, comprised primarily of third-party royalties.

Prior to the authorization of our COVID-19 vaccine inventory costs were recorded as research and development expenses in the period incurred.

We expense $242 million of prelaunch inventory costs in 2020.

Hence our cost of sales were only $8 million in 2020 comprised primarily of third party royalties.

David Moline: If inventory sold during 2020 was valued at cost, our cost of sales for 2020 would have been $62 million, or 31% of our product sales. Research and development expenses were $759 million for Q4 2020 compared to $118 million for the same period in 2019. Research and development expenses were $1.37 billion for the full year 2020, compared to $496 million in the prior year. The increases for both the three and 12 month periods in 2020 were mainly due to increased COVID-19 vaccine production, clinical development activities, headcount increases, pre-launch inventory buildup, and expenses associated with the equipment and lease facilities that were deemed to have no alternative use at the acquisition of such equipment.

If inventory sold during 2020 was valued at cost on <unk>.

Cost of sales for 2020 would have been $62 million or 31% of our product sales.

Research and development expenses were 759 million for Q4, 2020 compared to $118 million for the same period in 2019.

Research and development expenses were 137 billion for the full year 2020.

Compared to 496 million in the prior year.

The increases for both three and 12 month periods in 2020 were mainly due to increased COVID-19 vaccine clinical development activities head count increases prelaunch inventory buildup and expenses associated with the equipment and leased facilities.

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David Moline: Selling general and administration expenses were $79 million for Q4 2020 compared to $26 million for the same period in 2019, and expenses were $188 million for the full year 2020 compared to $110 million in the prior year. The increases for both periods were mainly driven by increases in personnel, outside services, and startup costs associated with preparation for commercialization of our COVID-19 vaccine globally. We recorded a net loss of $272 million for Q4 2020 compared to $123 million in the same period in 2019 and $747 million for the full year 2020 compared to $514 million in the prior year. Turning to selected cash flow information on page 12.

Selling general and administration expenses were 79 million for Q4 2020 compared to 26 million from the same period in 2019.

<unk> expenses were $188 million for the full year 2020 compared to $110 million in the prior year.

The increases for both periods were mainly driven by increases in personnel outside services and startup costs associated with preparation for commercialization of our COVID-19 vaccine globally.

We recorded a net loss of 272 million for Q4 2020 compared to 123 million in the same period in 2019 and $747 million for the full year 2020 compared to $514 million on the prior year.

Turning to selected cash flow information on page 12.

David Moline: We ended Q4 2020 with cash and investments of $5.25 billion compared to $3.97 billion at the end of Q3. The increase is primarily driven by 1.7 billion of customer deposits received in the fourth quarter for supply of our COVID-19 vaccine. On the top half of the page, we present information from our 10-K and 10-Q filings.

We ended Q4 2020 with cash and investments of $5, two 5 billion compared to 397 billion at the end of Q3.

The increase was primarily driven by $1 7 billion of customer deposits received in the fourth quarter for supply of on COVID-19 vaccine.

On the top half from the page, we present information from our 10-K and 10-Q filings and on the bottom part we provide the quarterly trend and the cash deposits received related to supply agreements for COVID-19 vaccine.

David Moline: And on the bottom part, we provide the quarterly trend and the cash deposits received related to supply agreements for a COVID-19 vaccine. Net cash provided by operating activities was $2.03 billion for the 12 months ended December 2020 compared to net cash used of $459 million for the same period in 2019. The reversal from cash used to cash provided by operating activities is driven by total customer deposits.

Net cash provided by operating activities was two point on $3 billion for the 12 months ended December 2020, compared to net cash used of $459 million.

For the same period in 2019.

The reversal from cash used to cash provided by operating activities is driven by total customer deposits cash used for purchases of capitalized property and equipment was $67 million for the full year 2020 compared to $32 million in.

David Moline: Cash used for purchases of capitalized property and equipment was $67 million for the full year 2020 compared to $32 million in 2019. Before looking forward to 2021, let me summarize a few areas from our 2020 results that are important to keep in mind when modeling 2021 financial performance. Starting with research and development and SG&A expenses shown on the top left quadrant of slide 13. Prior to the authorization for emergency use by the FDA in Health Canada, as a pre-commercial research stage company, Moderna expensed all costs related to the production of inventory, as well as Costs for Property and Equipment and Lease Expenses for Current and Some Future Contract Manufacturing Activities due to the Lack of Alternative Use.

2019.

Before looking forward to 2021.

Let me summarize a few areas from our 2020 results that are important to keep in mind when modeling 2021 financial performance.

Starting with research and development on SG&A expenses shown on the top left quadrant of slide 13.

Prior to the authorization for emergency use by the FDA and health, Canada as a pre commercial research stage company, but Darren to expense all costs related to the production of inventory as well as core.

Cost per property on equipment and lease expenses for current and some future contract manufacturing activities due to lack of alternative views.

David Moline: Adjusting for these items, which in the future would be capitalized and expensed as cost of sales, the underlying R&D and SG&A expense run rate per Q4 2020 was $0.5 billion for the quarter. Turning to the upper right quadrant of slide 13.

Adjusting for these items, which in the future would be capitalized and expense to cost of sales the underlying R&D and SG&A expense run rate for Q4, 2020 was <unk> 5 billion for the quarter.

Turning to the upper right quadrant of slide 13.

David Moline: Cost of sales includes the cost of goods manufactured, logistics and warehousing costs, as well as third-party royalty costs. The reported expense in Q4 of $8 million reflects the fact that we expensed all inventory-related costs until authorization for our COVID-19 vaccine. If valued at cost or actual cost of sales, including initial ramp-up costs, would have been 62 million, or 31% of product sales. The cash and investment balance reported as of December 31 was $5.25 billion, $2.8 billion of which related to cash deposits from customers for future supply of our COVID-19 vaccine. Lastly, I will comment on certain tax-related items.

Cost of sales includes the cost of goods manufactured logistics and warehousing costs as well as third party royalty costs.

The reported expense in Q4 of $8 million reflects the fact that we expense all inventory related costs until authorization of our COVID-19 vaccine.

If valued at cost or actual cost of sales, including initial ramp up cost would have been $62 million or 31% of product sales.

The cash and investment balance reported as of December 31 was 525 billion $2 8 billion of which related to cash deposits from customers for future supply of our COVID-19 vaccine.

Lastly, let me comment on certain tax related items.

David Moline: The significant investments in our research and development and startup activities to develop the mRNA platform over the last decade have resulted in a net operating loss carry forward with a balance as of December 31, 2020 of $2.3 billion, up from $1 billion at year-end 2019. Additionally, as of December 31, we maintain a full valuation allowance against our deferred tax assets related to these lost Gary Fowler.

Significant investments in our research and development and start up activities to develop RNA platform over the last decade.

Has resulted in a net operating loss carry forward with the balance as of December 31, 2020 of $2 3 billion.

Up from 1 billion at year end 2019.

As of December 31, we maintained a full valuation allowance against our deferred tax assets related to these loss carryforwards.

David Moline: We will continue to monitor the valuation allowance as we progress through 2021 and expect to utilize our loss carry forward. With this in mind, let me now move to considerations for 2021, starting with an overview of advanced purchase agreements for a COVID-19 vaccine on slide 14. We have disclosed advanced purchase agreements to supply our COVID-19 vaccine to 40 countries through the end of 2021, including the U.S. government for 300 million doses with options for an additional 200 million doses.

We will continue to monitor the valuation allowance as we progress through 2021 and expect to utilize our loss carryforwards.

With this context, let me now move to considerations for 2021, starting with an overview of advance purchase agreements for COVID-19 vaccine on slide 14.

We have disclosed advanced purchase agreements to supply our COVID-19 vaccine to 40 countries through the end of 2021.

Including the U S government for 300 million doses with options for an additional 200 million doses.

David Moline: The European Union for 310 million with an option for an additional 150 million doses in 2022, plus 10 other countries, including Japan, Canada, and South Korea, with announced doses totaling 186 million. We are thankful for the trust governments around the world have placed in us to deliver a vaccine for their countries.

European for $310 million with an option for an additional 150 million doses in 'twenty and 'twenty two.

10, other countries, including Japan, Canada, and South Korea, with the announced doses totaling $196 million.

We are thankful for the trust the governments around the world have placed on us to deliver a vaccine for their countries.

David Moline: All these agreements contain provisions for deposits and have contributed to our balance of deposits of $2.8 billion at year-end 2020. Negotiations with other countries are also ongoing, including with COVID. Turning now to the 2021 financial framework on slide 15, already signed APA agreements for expected delivery in 2021 reflect a total of $18.4 billion in anticipated product sales. Based on continuous progress to ramp up available supply capacity in our network, we have raised the lower end of our global manufacturing plan for 2021 from 600 million to 700 million doses at the 100 microgram dose level. Manufacturing is still working to supply up to a billion doses in 2021.

All of these agreements contained provisions for deposits and have contributed to a balance of deposits of $2 8 billion at year end 2020.

Negotiations with other countries are also ongoing including with Cove ex.

Turning now to the 'twenty 'twenty, one financial framework on slide 15.

Already signed a PPA agreements for expected delivery in 2021 reflects a total of $18 4 billion and anticipated product sales.

Based on continuous progress to ramp up available supply capacity in our network. We've raised the lower end of our global manufacturing plan for 'twenty and 'twenty, one from 600 million to 700 million doses at the 100 microgram dose level manufacturing is still work.

Looking to supply up to 1 billion doses for 2021.

David Moline: Further, we expect a range of related release doses in Q1, 2021 of 100 to 125 million doses and 200 to 250 million doses in the second quarter. Our total cost of sales includes the cost of manufacturing, logistics, and warehousing, as well as third-party royalties, as discussed previously. In 2021, we currently model total cost of sales as a percent of product sales to be approximately 20% for the full year, with some variation quarter by quarter, largely driven by the average selling price.

Further we expect a range of related of release doses in Q1.

2021 of 100 to 125 million doses in 200 to 250 million doses in the second quarter.

Our total cost of sales includes the cost of manufacturing logistics and warehousing and third party royalties as discussed previously.

For 2021, we currently model total cost of sales as a percent of product sales to be approximately 20% for the full year with.

With some variation quarter by quarter, largely driven by the average selling price.

David Moline: We also expect Q1 reported cost of sales in percent of product sales to be in line with the full year average, including the benefit from the remaining zero cost pre-launch inventory in Q1. Now, let me comment on planned R&D and SG&A expenses. The underlying Q4 2020 expense run rate adjusted for transitional items as discussed on slide 13 was approximately $0.5 billion. We currently expect our quarterly reported expenses to increase on a continuous basis through 2021 compared to the Q4 2020 adjusted run rate.

We also expect Q1 reported cost of sales and percent of product sales to be in line with the full year average.

Including the benefit from the remaining zero cost prelaunch inventory in Q1.

Now, let me comment on planned R&D and SG&A expenses.

The underlying Q4 2020 expense run rate adjusted for transitional items as discussed on slide 13.

It was approximately <unk> $5 billion.

We currently expect our quarterly reported expenses to increase on a continuous basis through 2021 <unk>.

Compared to the Q4 2020 adjusted run rate.

David Moline: In Q1, we expect an increase in the low double-digit percentage range relative to the adjusted Q4 2020 expense run rate of $0.5 billion. We'll provide additional updates going forward as our global business rapidly expands. I would also like to comment on how we think about modeling our tax rate. In 2021, Moderna will transition to taxable status as we deliver on our COVID-19 vaccine contracts to customers. As a US-based company, we start with a statutory 21% tax rate, which is impacted by global sales.

In Q1, we expect an increase in the low double digit percentage range relative to the adjusted Q4 2020 expense run rate of <unk> 5 billion.

We will provide additional updates going forward as our global business rapidly expands.

I would also like to comment on how we think about modeling our tax rate.

In 2021, well Donna will transition to taxpaying status as we deliver on our COVID-19 vaccine contracts to customers.

As a U S based company, we start with the statutory 21% tax rate.

This is impacted by global sales mix to the extent that non U S rates are generally lower than in the U S.

David Moline: To the extent that non-U.S. rates are generally lower than in the U.S. and by recovery against our prior accumulated losses of over $2 billion, as we start the year, we expect the all-in 2021 tax rate to be in the mid-teen percentage level on an ongoing basis, including in the first quarter. We will update this view as our book of business evolves further. Lastly, regarding capital investments, we currently plan capital investments in the amount of $350 to $400 million for 2021.

And by recovery against our prior accumulated losses of over $2 billion.

As we start the year, we expect the all in 2021 tax rate to be in the mid teen percentage level on an ongoing basis.

Including in the first quarter.

We will update this view as their book of business evolves further.

Lastly regarding capital investments, we currently planned capital investment in the amount of $350 million to $400 million for 2021.

David Moline: Only half of the investment is to further

Roughly half of the investment is to further expand our COVID-19 vaccine supply capability.

David Moline: COVID-19 vaccine supply capability, including supply capacity up to 1.4 billion doses at the 100 microgram level, with the balance of planned capital investments to expand our technical development and Clinical Manufacturing, as well as our other facility footprint. This concludes my remarks concerning the financial performance, and I turn the call back to Stephane.

<unk> supply capacity up to one 4 billion doses at the 100 microgram level.

With the balance of planned capital investments to expand our technical development.

Clinical manufacturing as well as our other facility footprint.

This concludes my remarks concerning the financial performance and I turn the call back to Stefan.

Stphane Bancel: Thank you, David. Now, on slide 17, let me discuss 2021. We are still in February, and the Moderna COVID-19 vaccine is now authorized in 37 countries, and our team is continuing to engage regulators in new geographies like Japan, Taiwan, the Philippines, and more. We are also well on our way in the rolling submission process to the WHO. It will be key for low-income countries to access them via COVAX and UNICEF if we get a partnership done.

Thank you David.

Let me now discuss 2021 on.

Slide 17.

We are seeing in February and the modern that COVID-19 vaccine is not authorized in 37 countries and our team is continuing to engage with it ourselves in new geographies like Japan, Taiwan, the Philippines and mall.

We're also well on our way in the rolling submission process, so would that really weren't sure.

We could be key for low income countries access via <unk> and unit sales.

Get a partnership done.

Stphane Bancel: We are committed to our principles of global access to our new class of medicines, where we recognize that the need for the scale-up of manufacturing operations has led to supplies going to the US, Europe, and other countries. We are working with COVAX to provide low-cost vaccines to the poorest countries and look forward to supplying our vaccines for COVAX Gavi and becoming a company that will be part of the global health infrastructure for many years to come.

We are committed to our principles of global access.

While new class of medicine.

Work on items that they need for scale up momentum.

Operations have led to supply going to be U S Europe and other countries.

We are working with kovacs will provide low cost vaccines to the poorest countries.

Supplying or vaccines for Covid, Gabby and becoming a company that will be both of the global health infrastructure for many years to come.

Stphane Bancel: UNICEF is the procurement arm of COVAX on slide 18. As I shared in my 2020 shareholder letter, which we posted publicly on January 4th, and which you can access on our blog if you have not read it, I believe that 2021 is going to be the most important inflection year in Moderna's history.

UNICEF ease of procurement of goal.

Box.

On slide 18.

As I shared in my 2020 shareholder letter, which we posted publicly on January of a fall.

And which you can access on our block if you have not provided.

I believe that 2021.

Going to be the most important inflection yet in modern history.

Stphane Bancel: You can see the revolution of the company over 2019, 2020, and 2021 on this slide in a few dimensions. But to me, the reason I say that 2021 is the most important deflection year in the company's history is that we are not the same company. As I've told our employees in the Western Town Hall, I almost wished I could change the company name to help our team understand the magnitude of the change.

You can see evolution of our company over 2019, 2020 and compete with day one on this slide although a few dimensions.

But to me the reason I say that is when do you want your line is the most important inflection yet in the company's history.

We are not the same company.

As I've told our employees you know we spent on hall.

I wish I could change the company name.

Paul team understand the magnitude of a change.

Stphane Bancel: We used to believe that the mRNA vaccine could be authorized and become commercial. We used to have negative cash flows from operations each quarter since our founding in 2010. We used to have to raise additional capital regularly. We thought we needed to do that for another 5 plus years until CMB would get the company's cash flow back even. But we have been through an incredible period.

We used to believe.

Tim on the vaccine could be authorized and become commercial.

We used to have a negative cash flow from operation each quarter since our founding in 2010.

We used to have to raise additional capital regularly and we needed to do that for another five prestea on CMV, we'd get the companys cash flow breakeven.

But we have been from any credible PMO.

Stphane Bancel: This is not the same company. Now we know that the mRNA vaccine can be authorized and become commercial. Now, we have had positive cash flows from operations for two quarters in a row already. So now we are going to double down on our investment in science. Manufacture, IT, Robotics, AI, to scale our company. I believe that in business, there's a drastic difference between believing in an outcome and having negative cash flow versus knowing an outcome and having positive cash. Our appetite and our ability to invest have been transformed.

This is not the same company.

Now we know that them on the vaccine can be authorized then become commercial now.

Now we have positive cash flows from operations folks, who cross sales you know already.

So now we're going to double down on non investment in science and process development manufacturing and.

<unk> in the eye.

The scale of our company.

I believe that the business is a drastic difference between believing in an outcome and I think they've got the cash flow rescues.

Knowing on outcome and having positive cash flow.

Our appetite and our ability to invest has been postponed.

Stphane Bancel: We are not the same company now that we were in the last 10 years, thinking it is going to be much more expensive on Slide 9. As David shared a moment ago, we already had as of yesterday $18.4 billion of signed advance purchase agreements for fiscal year 2021 delivery. We still have multiple discussions ongoing about additional APS for 2021, but these have not been signed yet, so they are not counted in the $18.4 billion.

We're not the same company now that's what we're in the last 10 years.

Thinking is going to be much more expensive.

On slide 19.

As they have each other a moment ago, we have as of yesterday already $18 4 billion of signed advanced purchase agreements, but the scale yet what gets on to your own deliveries.

We still have many people on discussions ongoing about additional Aps for 'twenty and 'twenty one.

But these have not been signed yet so we are not counted in the $18 4 billion.

Stphane Bancel: We'll update you each quarter about the signed APAs for Fiscal Year 2021 as we report self-recognized with the shipment of our COVID-19 vaccine. We increased our manufacturing base plant for the year to 700 million doses and are working hard to get to a billion. We are working with COVAX and its procurement arm, UNICEF, to maximize the availability of the vaccine around the world. Let me now turn to slide 20 to talk about the 2022 manufacturing capacity.

We will update you each quarter about the sign the EPS walk as cardiac muscle gets you one as we report said work organized with the shipment of a COVID-19 vaccine.

We increased our manufacturing base plan for the year from 700 million, both east and are working hard to get to a billion.

We are working with callbacks and these procurement UNICEF.

To maximize the ideally btu of a vaccine or on the world.

Let me now onto slide 20 to talk about 2022 manufacturing capacity.

Stphane Bancel: We announced last night after the market closed that several factors have led us to decide to add more manufacturing capacity. First, many governments have been telling us that they now see two classes of COVID-19 vaccine based on efficacy, and they would like more of our vaccine given its high efficacy. Warren, Sagan.

We announced last night after the market growth that several factors have led us to decide to add more manufacturing capacity.

Yeah.

When you go on months Ive been telling us that they now see two classes of COVID-19 vaccine based on the adequacy and they will act more bulk vaccine given your tight because he.

Second on volume.

Go ahead, Matt and could be kept detail there on the world.

Stphane Bancel: Government and public health leaders around the world are concerned about the emergence of several variants. They have been very clear about it, and some of them have started to request options for 2020.

Concerned about the emergence of several balance.

We have been very clear about the and some of them are starting to request auctions from 'twenty to 'twenty two.

We've just south of a force season soon in the southern Hemisphere.

Stphane Bancel: [inaudible]

We have a large population of the world and we will have population of immune compromised patients.

Stphane Bancel: will be an important strategy over the next

Positive patients, we're doing daily that go on and that's around the world and the Covid teams, while boosting people were borrowing will be an important strategy over the next couple of nobody else to get these virus under control.

Stphane Bancel: So we decided to add manufacturing capacity. We had communicated previously that our capacity for 2022, given the ramp in 2021, will be approximately up to 1.2 billion doses, assuming a 100 microgram dose. We have decided and have started to buy additional capital equipment, hire more people, and order more raw materials towards 200 million doses per year of capacity for 2022. So if you assume a hundred microgram dose, we will have 1.4 billion doses of capacity for Fiscal Year 2022. In other words, we'll build the manufacturing capacity to make up to 140 kilograms, yes, kilograms, of formulated mRNA in 2022. Now let's talk about output above those. Two factors that are mined out.

So we decided to add manufacturing capacity.

We had communicated previously.

For 2022, given the ramp in 2021 will be approximately up to one 2 billion of those years, assuming one on drug microgram dose.

We have decided and that started to buy additional capital equipment hire more people and more raw materials.

One of the millions of doses per year of capacity. Both once you go on Youtube.

So if you assume about 100 microgram dose will have one 4 billion boes of capacity profit caveat to Juan people Inova web will be the manufacturing capacity to make up to 140 kilogram, yes kilogram of formulated them on it in 2022.

Now, let's talk about the output in the bulk business.

So in fact, all the time line output.

Stphane Bancel: The doors for the booth and the product. Given that the COVID-19 vaccine, previously referred to as mRNA-1273, is currently authorized for 100 micrograms. So if you assume the boost, like mRNA-1273.351, the South African variant candidate, needs 50 micrograms per dose, on the bottom left of the slide, you see a scenario in which 100% of our output is the COVID-19 vaccine authorized, and we get 1.4 billion doses per microgram. On the bottom, in the middle, you see a scenario where we sell 1 billion doses of COVID-19 authorized vaccine and 0.8 billion doses of boost at 50 micrograms for a total of 1.8 billion doses. And on the bottom right, you see the marks; another scenario on the right.

The gross profit boost.

On the product mix.

Given the COVID-19 vaccine previously we felt that the amount of 273 is currently authorized 400 microgram dose.

So if you assume that boost that came on at $273 250 went into South Africa on the variant candidate.

<unk> ramped on those.

On the bottom left of slide you see a scenario in which 100 percentage of our output is on COVID-19 vaccine authorized.

And we get to $1 4 billion growth upon macro growth on the bottom in the middle you see a scenario, where we say $1 billion for COVID-19 vaccine and 0.8 billion those used for.

Booths at 50 microgram fault on one.

And on doses and on the bottom right you see remarks.

Scenario on Alex.

Stphane Bancel: The way to think about output will depend on the dose of the boost and the product. We will learn in the next few months in the clinic about the necessary dose to get a high neutralizing antibody type for... Based on that, one needs to think about our manufacturing capacity in terms of mass. Given the flexibility of mRNA, we can, in the same room and with the same equipment, make COVID-19 vaccine and or one boost and or two boost and or three boost, you get the point. We can run manufacturing campaigns based on market demand, with the same manufacturing capacity. Just like small molecule drugs.

The way to think about output will depend on the dose of the boost and the product mix.

In the next few months in the clinic.

But the necessary dose to get the high neutralizing antibody titer bulbs.

On it.

One needs to think about our manufacturing capacity in some of mass.

Given the <unk> do you have them on there we can't use the same room and we have a semi equipment make COVID-19 vaccine.

Juan boost and also boost and ultra boost you get the point.

We can run manufacturing campaign based on the market demand.

We've assumed manufacturing capacity.

Just like small molecule drug substance.

Stphane Bancel: So we are Mariner; we not only have the advantage of speed, but we also have the advantage of manufacturing flexibility, and we are betting on class efficacy. I believe this will prove crucial from a competitive standpoint for the years ahead, where nobody knows what the demand mix will have to be. This is a new and still unstable virus. Nobody knows if one variant is going to be necessary and or enough to boost or more in the years to come. And Kyrgyzstan. Thank you.

So we're not on now we not only have you had from Pedro speed.

But we also have yet on page of manufacturing flexibility.

And we are best in class efficacy.

I believe this week course sure from a competitive standpoint from a yield.

Well nobody knows what the demand mix will have to be.

He is a new and Stephen unstable virus.

Nobody knows when balance is going to be necessary and you know to boost on mall in the U S income.

On Tvs piracy is fully under control.

Stphane Bancel: So speed to market and flexibility of product mix and scale will be critical. And we also, without the partners, don't have to get aligned with somebody else with different goals, different financial incentives, different cooperation process, and different culture. We have moved fast, and we will continue to move fast, on Flag 21. In 2021, we are continuing to scale our commercial network. We plan to open commercial subsidiaries this year in Japan, South Korea, and Australia. I look forward to planting a Moderna flag in Tokyo, Seoul, and Australia. We also want to continue to help regional distributors.

So speed to market on fixing bto product mix and scale would be critical.

We have all three few companies do.

And we also we bought the partner so we don't have to get the land with somebody else moving different goals different punishment incentives different corporate decision, making process different culture. We.

We have moved fast.

And we will continue to move fast.

On slide 21.

In 2021, we're continuing to scale on commercial network.

We plan to open commission on subsidiaries this year in Japan.

Korea and Australia.

I look forward to planting going on on a plug in Tokyo's day wouldn't season.

We also want to continue to what regional distributors.

Stphane Bancel: We are in advanced discussions with partners to cover ASEAN and also Eastern Europe. With this addition in 2021, we will have a strong commercial network across the world in most critical markets by the end of. On the next slide, we were delighted to announce earlier this year that Cohen Le Jour has joined as Moderna's first chief commercial officer. Current experience in global commercial leadership at Amgen, but also critical experience as a country manager at Roche, and their experience with digital marketing will prove invaluable.

We are in advance discussion, we bought enough to cover as the Atlanta, So Easter on milk.

We've just had you said in your 'twenty 'twenty, one we would have a strong commercial network across the world in most critical markets by the end of this year.

On the next slide.

But delighted to announce that this year, that's going on there Joe.

As John as more than half dressed chief commercial officer.

Growth experienced in global commercial leadership and people have a sense, yet amgen, but that's.

A critical experience as country manager at Roche and their experience with digital marketing will prove invaluable.

Stphane Bancel: I have had the chance to spend a lot of time with Corinne since she joined, and I'm confident she will build a Moderna commercial organization, highly leveraged with digital solutions, both externally and internally. We both share the view that there are many ways to run commercial operations in a much more modern way than the traditional sales force of large pharmaceutical companies. In commerce, too, Moderna will disrupt and innovate and implement best practices from many industries and build a digital commercial organization.

I have had the chance to spend a lot of time with call. It seems he joined.

And I am confident you will be more than a commercial organization, how do you leverage digital solutions, both externally and income.

We both share the view that there are many ways to when commercial operation in the much more the on the way than traditional sales force philosophy, obviously gold companies.

In commercial tool more than that will disrupt and innovate and implement best practices from many industries and beat the digital commercial organization.

Stphane Bancel: Corrine will have a chance to share some of her thoughts and present them to you at our Vaccine Day on April 4th. This morning, we also announced that Tal, our Chief Medical Officer, will be leaving the company in late September after six years of service. Sal joined us when we were a preclinical company, and now, I am very thankful for TAL for taking a chance on us six years ago. It was not obvious at the time, trust me, that we were going to make it.

Colin would have a chance to share some of our thoughts and adult vaccine day on their pre fall to you.

This morning, we also announced that balance our chief Medical officer will be leaving the company in late September after six years of service.

Now John.

When we are quick clinical company.

And now.

We have low price products.

I am very thankful for talent, while taking a chance on that sales cycle.

It was not obvious at the time Trust me, that's where I'm going to make it.

Stphane Bancel: But given his deep scientific understanding and curiosity, like Stephen Hoge and I, and many others on the team, he saw that this technology could change medicine if we could make it work safely in humans. Sal, thank you so much for everything you have done. It has been a pleasure building Moderna with you on the team, and I look forward to continuing working with you in the coming quarters.

But given his deep scientific understanding and curiosity black Stephen Hogan on and menu on wheels on the team.

So that this technology could change medicine.

We could make it work safely in humans.

Thank you so much by European you have done.

Been a pleasure.

More than that we view on the team.

Look forward to continuing working with you in the coming quarters.

Stphane Bancel: The company has retained Russell Reynolds to recruit a new chief medical officer with global and commercial experience as the company scales up to launch the COVID-19 vaccine, of course, around the world but also prepares for potential COVID boosts and prepares to file several biological licenses over the next few years. With this in mind, now, let me turn to Stephen to talk about SARS-CoV-2 variants.

The company as we stay on western Windows to recruit a new chief Medical officer, with global and commercial experience as the Companys Caleb to launch.

The COVID-19 vaccine of course around the world So quickly on potential COVID-19 boost.

<unk>, probably favorable biological license over the next few years.

With this now let me turn to Stephen to talk about soft COVID-19 to balance Stephen.

Stephen Hoge: Thank you, Stephane, and good morning, everyone. Today, I want to take you through our current thinking on variants and our strategy to address them. I'll then turn it over to Tal to provide an update on our strategy for SARS-CoV-2 variants. Last week, we published a letter in the New England Journal of Medicine with data that confirmed the Moderna COVID-19 vaccine, mRNA-1273, provides neutralizing activity against all variants of concern tested to date.

Stephen.

Thank you Stefan and good morning, everyone.

They don't want to take you through our current thinking on variants and our strategy to address them. I'll, then turn it over to Tal to provide an update on our pipeline.

Let me start with a quick overview of our strategy for Sharps koby to variance of concern.

Last week, we published a letter on the New England Journal of Medicine with data that confirms the Madonna COVID-19 vaccine mrna $12 73 provides the neutralizing activity against all variance of concern tested to date Nonetheless.

Stephen Hoge: Nonetheless, as recent reports of increased transmission and potential reinfections of the new variants have emerged, out of an abundance of caution, we have announced multiple strategies to try to increase protection against those variants. As has been widely reported, the immune response generated by original strains appears to be relatively weaker against the B.1.351 variant. If or when immunity wanes in the future, this might lead to a gap in protection.

Nonetheless, as recent reports of increased transmission and potential re infections of the new variance of emerged out of an abundance of caution we've announced multiple strategies to try to increase protection against those variants.

As has been widely reported the immune response generated by original strains appears to be relatively weaker against the B 1351 variant.

If our win immunity wanes in the future this might lead to a gaps in protection.

Stephen Hoge: We plan to close this potential gap with an update to our vaccine based on the, We anticipate different approaches for two distinct populations, for those who have been immunized or infected by the original strain. We anticipate boosting with a variant-specific booster vaccine, either alone or in combination with our vaccine against the ancestral strain. For those who are still naive to SARS-CoV-2 because they have not been previously infected or vaccinated. We anticipate updating our...

We plan to close this potential GAAP with an update to our vaccine based on the new strains.

Different approaches for two distinct populations.

For those who have been immunized or infected by the original strains, we anticipate boosting with a variant specific booster vaccine either alone or in combination with our vaccine against the ancestral strains.

For those who are still naive to <unk> because they have not been previously infected are vaccinated, we anticipate on updating our vaccine to provide immunity to both the ancestral strains and the new variance on concern.

Stephen Hoge: Provided Immunity to Both the Ancestral Strains and the New Variant Now, on slide 25, you can see the clinical trials that are ongoing or planned for our COVID-19 vaccine for mRNA 1273. The Teen Cove Phase 2-3 study in adolescents ages 12 to 17 years is ongoing and recently completed enrollment. The KIDCOVE study, Phase 2, in pediatric populations ages 6 months to 11 years, will begin in the near term, and our Phase 1-2 study in Japan is ongoing, led by our partners, for the variant studies.

Now on Slide 25, you can see the clinical trials that are ongoing or planned for our COVID-19 vaccines for.

Our mrna 12 73, the team Cove Phase II III study in adolescents ages 12 to 17 years is ongoing and recently completed enrollment.

The Kid Cove study phase II in pediatric populations, aged six months to 11 years will begin in the near term.

And our phase one two study in Japan is ongoing led by our partner Takeda.

For the various studies, we plan to test various specific booster candidate mrna 12, $73 351 based on the B 1351 variant first identified in the Republic of South Africa at the 50 microgram dose level of Moore.

Stephen Hoge: We plan to test a variant-specific booster candidate, mRNA-1273.351, based on the B.1.351 variant first identified in the Republic of South Africa, at the 50-microgram dose level. In addition, we plan to test a multivalent booster candidate, mRNA-1273.211, that combines mRNA 1276 and mRNA-1273.351 in a single vaccine, again at the 50 microgram dose level and We're also evaluating a third dose of our authorized Moderna COVID-19 vaccine, mRNA-1273, at a 50-microgram dose level, which is already underway.

In addition, we plan to test a multi variable vaillant booster candidate.

On a $12 73 to 11 that combines mrna 12, 73, and 12 months 73 to 351 and a single vaccine.

Then at the 50 microgram dose level and Laura.

And we're also evaluating a third dose of our authorized madrone COVID-19 vaccine mrna 12 73.

On a 50 microgram dose level, which is already underway.

Stephen Hoge: Finally, we are planning to test a next-generation vaccine, Marni, 1280, that encodes for the receptor bonding domain and N-terminal domain of the spike and is being developed as a potential refrigerator-stable mRNA vaccine that could facilitate easier distribution and administration in a wider range of settings, including potentially developing countries. We believe messenger RNA is best positioned to address the potential threat of SARS-CoV-2 variants, given several key characteristics. [inaudible] I'm happy to say that we have already manufactured the first GMP batch of our variant booster candidate, mRNA-1273.351, and have shipped clinical trial material to the NIH for clinical trials. Now I'll hand it over to Tal, who will walk you through the rest of our portfolio Tal?

Finally, we are planning to test the next generation vaccine mrna 12 to 83 that encodes for the receptor binding domain and N terminal domain of the spike protein and is being developed as a potential refrigerators stable mrna vaccine that could facilitate easier distribution and administration on wider range of settings, including.

<unk> developing countries.

And we believe messenger RNA is best positioned to address the potential threat of Sars Covid two variance given several key characteristics, including high vaccine efficacy speed and agility to make updates the ease with which we can do combinations and our manufacturing flexibility and scalability.

I'm happy to say that we have already manufactured the first GMP batch of our variant booster candidate mrna 12, 73% to 351 and has shipped clinical trial material to the NIH for clinical testing.

Now I'll hand, it over to Tal, who will walk you through the rest of our portfolio across vaccines and therapeutics Tal.

Stephane Bancel: Thank you, Stephen. So, let me briefly summarize where we are on the rest of our pipeline. We have four other vaccine programs that are in clinical trials. The CMV vaccine is on track to start phase three this year. The Zika vaccine is preparing for a phase two trial that is also expected to begin this year, and our HMPV-PIV3 vaccine is currently enrolling toddlers. Our RSV vaccine is being studied in two separate trials, one in children and one in adults.

Thank you Stephen So let me briefly summarize where we are in the rest of our pipeline with four other vaccine programs that are in clinical trials. The CMV vaccine is on track to start the pivotal phase III this year.

Inc. A vaccine is preparing for a phase III trial that is also expected to begin in this year and our ancient PV PIV three vaccine is currently enrolling and partners.

Our RSV vaccine is being studied in two separate trials one in children and adults pediatric trial is enrolling quickly and the first three cohorts in the age Deescalation study have now been fully enrolled.

Stephane Bancel: The pediatric trial is enrolling quickly, and the first three cohorts in the age de-escalation study have now been fully enrolled. We announced last month that we were taking our RSV vaccine into the adult population, and I'm happy to share that the first participant has since then been dosed in that trial.

We announced last month that we were taking our RSV vaccine into the adult population on I'm happy to share that the FERC participant has since then dose from that trial.

Stephane Bancel: Just last month, we announced three new development programs for infectious disease vaccines. Our influenza vaccine program will evaluate three candidates comprising multiple antigen combinations against the four seasonal viruses recommended by the WHO, eventually moving one candidate into a phase three trial. Our HIV vaccine program has two approaches. mRNA-1644 is a collaboration with IAVI and the Bill and Melinda Gates Foundation. And finally, for those on Zoom... Unfamiliar with the Nipah virus, this is a zoonotic virus transmitted to humans from animals that is either transmitted in food or through direct human-to-human transmission.

Just last month, we announced three new development programs in infectious disease vaccines.

Our influenza vaccine program will evaluate three candidates come from.

Uprising multiple antigen combinations against the force seasonal viruses recommended by the WHI eventually moving one candidate into a phase III trial.

Our HIV vaccine program has two approaches mrna 16, 44 is a collaboration with Abbvie and ability Melinda Gates Foundation.

A novel approach to an HIV vaccine strategy, that's designed to elicit broadly neutralizing HIV one antibodies.

Rene $15 74 is a collaboration with the NIH and this includes multiple native like trimer antigens.

And finally for those on from.

I'm familiar with the Nipper virus. This is a zoonotic virus transmitted to humans from animals.

That is either.

Transmitted in food or through direct human to human transmission. It is included in the WH show R&D Blueprint list of epidemic threats needed for urgent R&D action Hey.

Stephane Bancel: It is included in the WHO R&D blueprint list of epidemic threats needed for urgent R&D action. mRNA-1215 is a collaboration with the NIH to develop the Nipah vaccine. We also have seven clinical proof-of-concept trials ongoing in our exploratory modalities. The phase two program in VEGF, partnered with AstraZeneca, is ongoing. The personalized cancer vaccine phase two, which is in combination with Keytruda, compared to Keytruda alone, that is partnered with Merck, continues, and phase one of that program in multiple cohorts is ongoing, including the upsized head and neck cohort that is currently recruiting additional patients.

Hey, Mark on a $12 15 is a collaboration with the NIH to develop and depot vaccine.

We also have seven clinical proof of concept trials ongoing in our exploratory modalities the phase II program in fed Jeff partnered with Astrazeneca is ongoing.

Personalized cancer vaccine phase, two which is in combination with keytruda compared to Keytruda alone that.

That is partnered with Merck continues and the phase one of that program in multiple cohorts is ongoing including the Upsized head and neck cohort that is currently recruiting additional patients.

Stephane Bancel: The KRAS phase one that is partnered with Merck continues, and in intratumoral oncology, we have a phase two ongoing with the Oxford Ligand Program in ovarian cancer patients. The phase one dose escalation for the triplet program is ongoing, both as monotherapy and in combination with Dervalumab, and IL-12, partnered with AstraZeneca, continues in a phase one trial. Finally, within systemic intrafilar therapeutics, phase one, two sites for our PA program are being initiated, and we plan to enter the clinic this year. This final slide shows our full pipeline. And with that, let me hand it back to you. Thank you.

The K Ross Phase one that is partnered with Merck continues and then the intra tumor alone carload you. We have a phase two ongoing with ox 40 ligand program in ovarian cancer patients.

The phase one dose escalation for the triplet program is ongoing both as monotherapy and in combination with <unk>.

And our IL 12 partnered with Astrazeneca continues in our phase one trial.

Finally within the systemic intracellular therapeutics the phase one two sites for our <unk> program are being initiated and we plan to enter the clinic this year.

This final slide has our full pipeline and with that let me hand, it back to Stefan.

Thank you Tom.

Stphane Bancel: Thank you, guys. We have a set of clear priorities for 2021, and everybody at Moderna has a chance to review them and discuss them.

On slide 32.

We have a set of clear priorities for 2021, and everybody had somebody on that I had the chance to review them into discuss them price.

Stphane Bancel: Priority number one, to maximize the impact of a COVID-19 vaccine. The output in 2021 in terms of the number of those who can ship to countries. The Manufacturing Scallop preparing for 2022 supply.

Number one.

To maximize the impact of our COVID-19 vaccine.

The output from 2020, well I think that number on those so we can ship to countries.

The manufacturing scale up preparing for 2022 supply.

Stphane Bancel: Clinical Development of Variants and Boosts, and of full commitment to bring variants of concern to the globe. Priority number two. Accelerate Vaccine Development. We continue to bring more innovation from the research lab to clinical development. Priority number three, generate proof of concept in therapeutic applications and pedernal success of our ability to repeat those in humans. Opera Predicts technology with chikungunya antibodies. But we also expect key data in cardiology, oncology, rare genetic diseases, and the entry into the clinic of our first autoimmune program. Project No. 4.

Clinical development of balance and boost and a full commitment to bring balance of confirm to organic.

Price and number two.

Alright vaccine development.

And continue to bring more innovation.

Innovation from our research lab to clinical development.

Pricing number free generate proof of concept in therapeutics.

Based on the success of our ability to repeat those in human.

With the ex technology, where she couldn't when your antibodies.

But there's still interest you hold we expect key day <unk> oncology.

Thank you Heath and to entering the clinic of our first autoimmune programs.

Breaking on before.

Stphane Bancel: We want to continue the expansion of mRNA technology. For Appetite, we invest in science and process development as not weakened; we trust the opposite. We believe we are still at the beginning of the S-curve of this exciting technology.

We want to continue the expansion of them on the technology.

Well appetite to invest in science and process development as both weekend interest you are positive.

We believe we are still at the beginning of the S curve of this exciting new disruptive technology.

Stphane Bancel: On slide 23, as I shared earlier, this is an important inflection year for the company. Now that we know that the mRNA vaccine can be approved, and that we have positive cash flow, we have the ability to invest and to scale like we've never had in our history. If you look at slide 34, you see some of the key attributes that energize mRNA. You know, mRNA is an information molecule.

On slide 23, as I showed earlier.

Is it an important inflection year for the company now that we know MRI on it.

Vaccine can be approved.

GAAP cash flow, we have the ability to invest it will scale like we've never had in our history.

If you look at slide 34, you see something on the key attribute that Energizes me.

And on news and information on one.

Stphane Bancel: Moderna has a unique platform. We have a very strong cash position. We have signed a very large number of APAs. We believe Moderna will be cash flow positive this year. We believe Moderna will be profitable in 2021. The team has done a remarkable job, and I'm so proud of this team.

Well then that as a unique platform we have a very strong cash position we have.

Very large amount of AP is we believe more than it would be cash flow positive. This year will be even more than that would be perfect day, Bobby in 2021.

The team has done a remarkable job and I'm. So proud of this team.

Stphane Bancel: We have a fully integrated manufacturing plant in Massachusetts and a network of partners with Lonza, Catalan, Soroby, and Le Cifarme. We have already made 100 million doses of the drug substance for the COVID-19 vaccine. We have shipped approximately 60 million doses globally. And, as the team reviewed, we have 24 exciting first-in-class or best-in-class development programs that we are pushing toward the clinic. Sorry, that's wrong. As our historic investors know, since I joined Moderna as employee number two in 2011, we have always focused on how do we grow 10x from where we are. We ask these questions to ourselves regularly.

We are a fully integrated manufacturing plant in my section.

And the network of bottomed out we have loans that got that answer will be if your problem. We have already made one that doesn't mean on billings of drug substance of our COVID-19 vaccine, we have shipped approximately $60 million those needs globally.

And then I have a team reviewed we are plentiful exciting first in class or best in class development programs.

We are pushing for a while.

Okay.

Paul.

As all historically invest on no.

Seems like John with you on that I was and I'm quoting him, but two in 2011.

We have always focused on how do we growth tenex from where we are.

We asked these questions, we'll sell rig rally.

Stphane Bancel: I have to admit that in 2020, I did not focus on it as intensely as in the previous years. We focused on moving mRNA-1273 to phase 1, phase 2, phase 3, regulatory authorization, and on building manufacturing to deliver up to 1 billion doses for 2021. We did not spend much time asking how we could grow Xanax.

Yes.

In 2020.

Not focused on it as intensely as in the previous sales.

We will focus on moving and get them on it's sort of 73 to a phase one phase two phase III, where we got the authorization and on building manufacturing will deliver up to 1 billion those coupled with you on your way.

We did not spend much time, asking how do we go on phenix.

Stphane Bancel: We were focused on how we get this important vaccine to the finish line and get up to a billion doses to help people around the world. In early December, while our team was focused on preparing for the FDA VIAPAC meeting on December 17th, I was starting to step back, and the Gates River Board and some of our executive team members, and that's all of them.

We were focused on how do we get this important vaccine to a finish line and get them to a beat on.

Those with people on the world.

In early December.

While our team was focused on preparing for F. D. A <unk> meeting on December 17.

Starting to step back.

And the gateway the ball.

And some of our executive team members.

All of them.

Stphane Bancel: Now that we know the mRNA vaccine can get approved, we are generating cash. How do we go 10x from here?

Now that we know them on the vaccine can get the probe.

And.

That's where generic Inc cash.

How do we have with Tenex from here.

Stphane Bancel: The last two months have been really fun to invent 10x Moderna. The team is highly energized by it, and so am I. We have the opportunity to become one of the most impactful biopharmaceutical companies in the world for the next 10 to 20 years. The potential to maximize that impact on patients is what motivates me. The team and I look forward to welcoming you to our regular investor event. We will host our Vaccine Day on April 14th.

The last few months I've been really fun to be an event that <unk> Madonna.

The team is highly energized by it.

So on line.

We have the opportunity to become one of the most impactful biopharmaceutical company over the next 10 20 years in the world.

The potential to maximize the impact on patients.

What motivates us.

The team and I look forward to welcoming you to our record all universities all events.

Also on boxing day on April 14.

Stphane Bancel: We will have our annual science day on May 27, and with us is our annual R&D day on December 9th. [inaudible] We have a unique opportunity to have a very large impact on so many lives. It is humbling for all of us and also highly motivating to always challenge ourselves to be the best version of Moderna that we can be. I would like to thank all the Moderna employees, or partners, or many suppliers around the world, clinical investigators, or participants in a clinical study. I would also like to thank our investors for your trust as we embark on this new version of Moderna. The team and I will now be happy to take your questions. Okay.

We will also annual science day on May 27.

And we will have on your R&D day.

On the night.

Sure.

Moving to <unk>.

We have a unique opportunity to have a very large impact on so many lives.

It is humbling to all of us and it was so highly motivating to always challenge ourselves to be the best guess jump off from what.

Now that we can.

I would like to thank on more than that team.

Our partners on menu suppliers around the world on.

Clinical investigators.

All participants in our clinical studies.

I will select to think going best thoughts for your trust.

As we embark in this new version of medallion.

The team and I will now be happy to take your question I'm sorry Tal.

Operator: At this time, if you'd like to ask a question, simply press star one on your telephone keypad. Your first question comes from the line of Matthew Harrison with Morgan Stanley. Great. Good morning. Thanks for all the information this morning. I guess my first question is, can you discuss the dosing strategy around boosting? And in particular, I think I understand why you're going to start with 50 micrograms, but what do you think about the probability of using a lower dose there?

At this time, if you'd like to ask a question simply press star one on your telephone keypad.

Your first question comes from the line of Matthew Harrison with Morgan Stanley.

Great. Good morning, Thanks for all the information this morning I guess.

First question can you discuss the dosing strategy around boosting and in particular, I think I understand why youre going to start with 50 micrograms, but why do you think about the probability of you.

Using a lower dose there and then just secondly.

Operator: And then, just secondly, as far as I understand it, I think that the number of doses that have been signed via APA is higher than the 700 million that you've talked about in terms of manufacturing supply. Can you just talk about what your thoughts are on being able to deliver those additional doses this year? Thanks, Matthew. Thank you. Thank you. Go ahead. I'll try and take the first one and then hand it over to Tal as well, and then I think David will obviously take the second one.

As far as I understand I think the number of doses that have been signed.

They are higher.

And then the $700 million that you've talked about its terms in terms of manufacturing supply can you just talk about.

What your thoughts are on being able to deliver those additional doses this year. Thanks.

Thanks, Matt.

Okay.

Okay.

Stephen.

Hi.

I'll take I'll try and take the first one and then hand, it over to Tal as well.

And then I think David will obviously take second.

Stephen Hoge: So first, on 50 micrograms, I'd remind you of a couple of things. In this case, this is the third dose of the booster, and so I think we're quite optimistic that a substantially lower dose is necessary because the immune system has already been primed and boosted once, and this is just maturing and updating that immune response to a new variant. And I'll note that, you know, we've shared our phase two data, which does show that we see really good neutralizing antibodies at 50 micrograms, even in a primary series, and so I think we're quite optimistic that 50 micrograms or lower will suffice as the third dose. This is Paul.

So first on 50 microgram I'd remind you of a couple of things so.

In this case this is a third dose of a booster and so I think we're quite optimistic that a substantially lower dose is necessary because the immune system has already been primed and boosted ones.

And this is just maturing and updating that immune response to new variant.

And I'll note that we have.

We've shared our phase II data.

Which does show that we see at 50 micrograms, even in a primary series really good neutralizing antibodies and so I think we're quite optimistic net 50 micrograms or lower.

Well suffice is the third dose booster.

This is Paul the only thing I'd add is that that has scientific precedent.

Stephane Bancel: The only thing I'd add is that there is scientific precedent. There is data, I believe, with a malaria vaccine that was published a while ago that showed that if you come in months later, you can come in with a much lower dose, and that is sufficient to provide a boost. So in the context of wanting to maximize the ability to provide a benefit from whatever given capacity, I think that strategy makes sense.

So good data I believe in the malaria vaccine that was published a while ago that showed that if you come in months later, you can come in with a much lower dose of that is sufficient to provide a boost so in the context of.

Wanting to maximize the ability to provide a benefit from whatever given capacity I think that strategy makes sense.

Stephane Bancel: On top of which, as Stephen alluded to, it could be that even 50 micrograms as a priming series could suffice. Recall that our dose at 100 supersedes what you see with natural infection in terms of neutralizing antibodies to begin with.

On top of which Stephen alluded to it could be that even 50 micrograms as a priming series.

Suffice recall that our dose at 100 supersedes, what you see with natural infection in terms of neutralizing antibodies to begin with.

Stephane Bancel: Thanks, Tyler and Stephen. On the second question, Matthew, as you know, we have been cautious about talking about supply for the year, and we have raised the number as we've understood better the learning curve of a process as we've had the lots made and been able to see the demonstrated output. I think it's important to always appreciate this is a new technology. We have never made, and nobody in the world has made, MR&A at that scale so fast.

And Stephen on.

On the second question in my view.

As you know we have been cautious about.

Talking about supply from a year and we have raised the number as we have understood.

The learning curve of a process as we've had the lots made and being able to see it demonstrates they are.

Outputs.

I think it's important to always appreciate species and you would think.

We have never made and what made them all on at that scale. So fast.

Stephane Bancel: And so it's important for people to understand, you know, we invested in and built the manufacturing capacity. The Ability to Make a Billion Dollars, The Peace, Having Worked Myself in Manufacturing at Commercial Scale, and of course Juan Andres, who learned this from me. Manufacture, you know, used to run manufacturing for Novartis worldwide.

And so it's important for people to understand.

We invested in the manufacturing capacity.

The ability to make a $1 billion.

I think what might still be manufacturing at commercial scale and of course, you know Juan Andres Williams.

On the manufacturing used to run manufacturing for Novartis worldwide.

Stphane Bancel: There are so many unknowns at this stage that as we learn more, we are upgrading our numbers. As you know, last year, early in the process, we said we felt comfortable we could get at least $500 million out of a billion of infrastructure capacity. Then we were ready to 600.

There are so many unknown at this stage debt.

We learn more we are upgrading on them barrels as you know last year early in the process. We said, we feel comfortable we get at least $500 million out of the $1 billion of infrastructure capacity.

Then you put six on drug.

Stphane Bancel: With what we have seen out of the US supply chain, as you know, Europe is around three months behind the US because of when. We feel good about what's happening in the U.S. The team is doing a really remarkable job, and so we feel comfortable to date to up what we call our base case.

We have seen out of the U S supply chain be as you know Europe is around three months behind the U S. Because of when we started building. It we did not have a noteworthy <unk> from Europe as you know.

We feel good about what's happening in the U S, but female doing on where do you a remarkable job.

And so we feel comfortable to date to what we call base case, we feel very comfortable debt.

Stphane Bancel: We feel very comfortable that we will deliver 700 million doses. The team is working extremely hard to get to a billion dollars. They know that every extra dose we can get out of Moderna's supply chain will be used and will help protect people. So we have a full commitment to do everything we can to get as close as we can to a billion. But at this stage, what we are saying is we feel very comfortable that we can deliver 700 million days planned, and we are still working on the upside, and I will not bet against the Moderna team to be able to do better, but at this stage, 700 million is the base. Thank you.

Did he relative on doesn't meet on those EPS.

The team is working extremely hard to get to a billion dollars. They know that every ex red those who can't get out of more than a supply chain, we'd be used and will help protect people.

So you have a full commitment to do everything we can to get us close on who came to a billion but at this stage. What we're saying is we feel very comfortable we can deliver on $700 million base plan.

And we are still working through the upside then I will not bet against them on on that team to be able to do better but at this stage to around 1 million user base.

Okay.

Thank you.

Stephane Bancel: Your next question comes from the line of Ted Tanoff with Pfeiffer Sandler. Great, thank you very much. And just incredible progress over the course of the year. And David, thanks for all the clarity on the quarterly update. I'm wondering, with respect to the $200 million that was booked in the fourth quarter, what is the number of vaccines that are ascribed to that? And then, if I may, will we be getting any data from the triplet Oncology I.O. program this year? Thank you, guys.

Your next question comes from the line of Ted <unk> with Piper Sandler.

Great. Thank you very much and just incredible progress over the course of the year on David Thanks for all the clarity on the.

Quarterly update Im wondering with respect to the $200 million that was booked in the fourth quarter what is the number of vaccines.

Scribed to that.

And then if I may we'd be getting any data from the triplet.

Oncology I O program. This year. Thank you guys.

David Moline: Yeah, so the 200 million dollars in revenue was associated with the deliveries that we made to the government in the fourth quarter of the US, which was around $17 million.

Sure.

Yes, so the 200 million of revenue was associated with.

The deliveries that we made to the government in the fourth quarter in the U S, which was around $17 million.

Thank you.

Stephane Bancel: And Ted, this is Carl, as it relates to the triplet. I hope so. Data and oncology are a function of when we see responses. And so once we see them and we confirm them, then of course, that becomes material information that we share. So it's hard to predict, but I would hope so.

And Ted this is call as it relates to the triplet I hope so.

They don't oncology as a function of when we see responses and so once we see them and we.

Confirm them then of course.

That becomes material information that we share so it's hard to predict but I would focus on.

Stephane Bancel: Brilliant. And Tal, wishing you all the best. Thanks for all the hard work.

Great and Tal wishing you all the best Thanks for all the hard work.

Salveen Richter: Thank you, Ted. Your next question comes from the line of Salveen Richter with Goldman Sachs. Good morning, and Tal, I want to second that. Good luck with the path ahead, and you will be missed here.

Thank you Ted.

Your next question comes from the line of Sylvan Richter with Goldman Sachs.

Good morning, and talent on a second debt and good luck with the path ahead, and you will be missed here.

Stephen Hoge: So with regard to variants, which of the three approaches for COVID on the four do you think will be optimal here? And do you have updated thoughts on the correlative protection or trial design? And then separately, should we expect your pricing strategy for 2022 to be in line with 2021? You did mention options. So I'm just curious how we should think about that. Thank you, Salveen.

With regard to experience with Chipotle when you purchase for Covid on the floor do you think will be optimal here and do you have updated thoughts on the correlated protection or trial design and then separately should we expect your pricing strategy for 2022 to be in line with 2021, I mean, you did mention option. So I'm just curious.

How we should think about that.

Thank you Salvi announced I'll try and take the first part of that question, so as far as what's optimal.

Stphane Bancel: I'll try and take the first part of those questions. So as far as what's optimal, I think we have to run the clinical experiment to know. And that's why you see us taking the three approaches. It is entirely possible, maybe even desirable, that 1273 as a third dose is able to boost immunity above a level that would be necessary to provide long-term protection against the new strains. But if you look forward and say, you know, at some point in the future, we're going to be in a regular boosting environment.

We have to run the clinical experiment to now and Thats why you see us taking the three approaches it is entirely possible, maybe even desirable that $12 73, as a third dose is able to boost immunity above the level that would be necessary to provide long term protection against the new streams.

But if you look forward.

Hey.

At some point in the future.

We're going to be perhaps in a regular boosting environment, what would be the ideal vaccine. It seems logical that vaccine that provides the broadest immunity. So not just against the ancestral screens or a boost against the new strains.

Stphane Bancel: What would be the ideal vaccine? It seems logical that a vaccine that provides the broadest protection, so not just against ancestral strains or a boost against new strains would perhaps be the best mode. And that's where I think the blended approach, so 1273-211 as we announced today, might ultimately be the right long-term product. But in the near term, we gotta run the clinical experiments to get the answer.

Would would perhaps be the best mode and that.

That's where I think the blended approach so 12, 73% to 11 as we announced today.

Might ultimately be the right long term product, but in the near term we've got to run the clinical experiments to get the answer.

Stephane Bancel: Thanks Stephen. And on the pricing questions, Salveen, at this stage, we have not disclosed any information on pricing. The piece that I can share as the scholar is, as you know, we have a high efficacy vaccine. I think governments understand the ability that we have to move fast on variants, and of course we care deeply about that ability versus other technologies and other companies and so in due course as the 2021 year progresses we'll be sharing more color on the pricing strategy for 2022 and for both of the prime series as well as the variant, it might be the same, it might not be the same so we'll discuss that in due course, thank you.

Thanks, Stephen and on the pricing questions that have been at this stage, we have not disclosed any information on pricing the piece that I can't share as just caught all he says you know we have a high efficacy of vaccines.

On the months.

And the ability that we have to move fast from a variance.

And of course, they cared deeply about that liability you guys use over technologies on the other companies and so.

<unk> growth.

21 year progress would be showing more quarter on the pricing strategy for 2022 windfall both from.

The Prime series is what else the violence he might be the semi might not be the same. So we'll just go to debt.

In due course, thank you.

Operator: ..

Stphane Bancel: And Salveen, this is Paul. Thanks for your kind note. And I wanted to answer your question about the correlates. I think that work continues. It's being primarily led by NIH, who have access to all our samples as well as the other part of Funded Trials. The current assumption is that we should be able to move even without a correlate.

And so this is Paul thanks for your time.

No.

I wanted to answer your question about the correlate.

That work continues its being primarily led by the NIH, who have access to our large samples as well as the other.

BARDA funded trials.

The current assumption is that we should be able to move even without a correlate and that is consistent with the recent FDA guidance on the development of a variant vaccine I think if there does emerge it correlate a protection to make everybody's life easier.

Stephane Bancel: And that is consistent with the recent FDA guidance on the development of a variant vaccine. I think if there does emerge a correlative vaccine, it'll make everybody's life easier. Especially those coming up in our footsteps in terms of licensing new vaccines. But I think also for us, the ability to peg the dose level will be substantially made easier with that. So we continue to work towards that goal, and we'll see in the coming months whether one emerges.

<unk>.

Especially those coming up in our footsteps in terms of licensing new vaccines, but I think also for us the ability to pick the dose level will be substantial we made easier with that so we continue to work towards that goal, we will see in the coming months, where the winner emerges.

Operator: Thank you.

Thank you.

Stephen Hoge: Your next question comes from the line of Michael Yee with Geoffrey Meacham. Hi, thanks. Good morning, and again, congratulations on all the progress. Two questions.

Your next question comes from the line of Michael Yee with Jefferies.

Hi, Thanks, Good morning, and again congrats on on all the progress.

Stephane Bancel: One is a variant timing manufacturing question, and one is a competitor question. I guess based on what you described today, can you just kind of walk through the timing of how to develop and what would be needed to get a variant vaccine approved, and when you would be able to flip the switch and start making that? That's just question one for a variant. And then, related to that, maybe for Tal, before we let you go, maybe you could comment about how you think about variant vaccines for mRNA versus adeno, particularly with multiple strains in there. How do you think about comparing and contrasting?

Two questions. One is a variant timing manufacturing question and one is the competitor question I guess based on what you describe today can you just.

Kind of walk through the timing of how to develop and what would be needed to get a.

<unk> seen approved and when you would be able to flip the switch to start making that answers question. One for ovarian and then related to that maybe for Tal before we let you go maybe you could comment about how to think about variant vaccines for mrna vs add no.

With multiple strains in there how do you think about comparing and contrasting thank you.

Stephen Hoge: Thank you. So maybe I'll take the first part of it and then hand it over to Tal for the second. I think the first thing to say about how quickly we think this goes is that we've already, I think, demonstrated that we can pretty quickly produce a new batch. And if you look back to when we announced that we'd started manufacturing, it might be even faster than last year. We do think the clinical program for testing this is pretty straightforward based on the recent FDA guidance and other public comments.

So maybe I'll take the first part of it and then hand over to Tal on the second.

I think so first on on how quickly we think this goes.

We've already I think demonstrated.

Our debt, we can pretty quickly produce a new batch in and if you look back to when we announced that we started manufacturing maybe even faster than last year.

We do think the clinical program and for testing is pretty straightforward based on the recent FDA guidance on other public comments.

Stephen Hoge: It's likely to be, you know, in hundreds of people, with immunogenicity and safety as important endpoints there. But ultimately, that'll be subject to, you know, discussions with the FDA. And so we think we could get to clinical data here relatively quickly. And they'll be able to demonstrate the potential for a booster vaccine to close a potential gap in immunity. As far as production is concerned, you know, that will depend a lot on the demand picture and, possibly, that data.

It's likely to be in the hundreds of people and Immunogenicity and safety as.

As important endpoints, there, but ultimately that will be subject to discussions with the FDA.

And so we think we could get to clinical data here relatively quickly there'll be able to demonstrate the potential for a booster vaccine to close the potential GAAP and immunity.

As far as production that will depend a lot on on the demand picture and possibly that data.

Stephane Bancel: But as Stefan noted, our manufacturing systems, really, we believe we could almost copy and paste the new information into those manufacturing systems and proceed very quickly to update our vaccine or produce a booster. Tal, do you want to take the second part of that? Oh yeah, that's a softball.

As Stefan noted our manufacturing systems really we believe we could almost copy and paste the new information into those manufacturing systems and proceed very quickly to be updating our vaccine or producing booster.

Tal do you want to take the second part of that.

Oh yeah.

That's the soft well look the mrna.

Stephane Bancel: Look, the mRNA, the beauty of the mRNA technology is the fact that the immune system doesn't recognize the LNPs per se; it only recognizes the protein that we teach the body to make. And so I believe that our vaccine platform is optimally suited to boost irrespective of what primary series somebody gets, whether it was a protein in mRNA, or frankly, an adenovector. I think the challenge with the adenovectors for both the initial boost and certainly any work with variants down the road is going to be that the adenovectors generate significant immunity against the other components of the adenovirus and thus have the risk of limiting the ability to translate the transgene.

The beauty of the mrna technology is the fact that the immune system doesn't recognize the olympias per se. It only recognizes the protein that we teach the body to make and so I believe that our vaccine platform is optimally suited to boost irrespective of what primary series somebody got whether it was a protein and mrna or frankly no vector.

I think the challenge with the Idaho vectors for both the initial bluestem certainly any.

Work with variance down the road is going to be that the AD no vectors generate significant immunity against the other components of the adenovirus and thus.

Have the risk of limiting the ability to translate the transgene.

Stephane Bancel: And therefore, if you look at the boosting delta, that is, you know, how much additional antibody levels do you get from a boost with adenovectors, you can get a boost, but the magnitude of that boost is invariably less than the magnitude of the boost you get with an mRNA platform. And that is true just for the first boost.

And therefore, if you look at the boosting Delta that is how much additional antibody levels do you get from a boost with adenovirus you can get a boost but the magnitude of that boost is invariably less than the magnitude of the boost you get with an mrna platform and that is true just in the first the boost.

Stephen Hoge: I suspect that if you needed to come up with a third dose or a fourth dose or variant specific vaccines, it would be challenging to get the requisite amount of specific immune recognition towards the new transgene. Yep, thank you. Your next question comes from the line at Gena Wang with Barclays. Thank you for taking my questions. And Kyle, good luck with your next journey. It's a big shoot to fit in, and you will certainly be missed here.

I suspect that if you needed to come with a third dose or a fourth dose or variants specific vaccines. It would be challenging to get the requisite amount of specific immune recognition towards the new transgene.

Over.

Yep. Thank you.

Stephen Hoge: I have two questions regarding the variants and also the next generation COVID vaccine, 1283. So for 1283, it is the shortest sequence that made fridge storage feasible, and also with the sequence outside of the RBM sequence, they say RBM motif sequence. And then the second part of the questions are called two variants for the NIH study. I'm wondering if you can help me with those.

Stephen Hoge: give a little bit more color regarding the type of.

Stephen Hoge: Thank you for the questions, Gina. I'll take the first part of that and then hand it over to Tal to answer the NIH component. So in terms of mRNA-1283, it is correct. The fact that it is a shorter mRNA helps with long-term stability and does facilitate, we think, moving that into a refrigerated vaccine. It's not the only feature. As you'll note, we have advantages in our mRNA platform based on our long history of working with it.

The shorter M. On a does help with the long term stability uhm and does facilitate we think moving that into a refrigerated vaccine uhm, it's not the only feature uhm as you'll know we've had advantages on our end of morning platform based on on a long history of working on it for instance that we're we're functioning right now already yeah.

Stephen Hoge: For instance, that we're functioning right now already, as has been noted, in a normal freezer for up to six months and actually already doing 30 days with mRNA-1273 in a refrigerator, post-thawing. And so it's a benefit, but we're already well on that path, even with just 1273. I think the second part of your question was, is it just the RBM? And 1283 covers both the RBD and the N-terminal domain.

As has been noted in a in a normal freezer for up to six months and actually already doing 30 days with them already 12 73 in a refrigerator post on and so it's it's a it's a benefit but we're already well on that top even just 12 73 I think the second part of your question was is it just the R. B M and 12.

83 covers both the R. B D and the end terminal do name domain and as has been widely reported those are are particularly important for for neutralizing activity in in immune system against starts Kobe two hours.

Stephen Hoge: And as has been widely reported, these are particularly important for neutralizing activity in the immune system against the SARS-CoV-2 virus. Thanks, David. Hi Gena. Thank you for your kind comments and compliments. The NIH, I'll defer to my colleagues there to describe their trial in the coming weeks once they launch it, but in essence, the answer is both. They will have arms there that will be testing the new variant vaccine as a boost in those who have been previously immunized in their phase one trial. And then there will be a component that will test the new vaccine in a primary series.

[noise] Thanksgiving could you. Thank you for your current comment the NIH on the front of my colleagues there to describe their trial in the coming <unk> Fortunately launch it but in essence the insurance both they will have orange there that will be testing the.

<unk> you very on vaccine as a boost and those who have been previously I mean I was on their phase one trial and then there will be a component that will test the the new vaccine and a primary series.

Stephane Bancel: Okay, thank you.

<unk>.

Okay. Thank you.

Operator: Your next question comes from the line of Corey Casamoff with J.P. Morgan. Hey, good morning, guys.

Your next question comes on the line of Comcast I'm on the J P. Morgan.

A good morning, guys. Thanks for thanks for taking the question all the details today and all the best to tell although it's good to know we'll have you for a couple more quarters. So two questions for me as as well like I I realized there's not much you can say on pricing beyond 2021, but as we think about your booster strategies that could be.

David Moline: Thanks for taking the question, all the detail today, and all the best to say, although it's good to know we'll have you for a couple more quarters. So, two questions for me as well. Look, I realize there's not much you can say on pricing beyond 2021. But as we think about your booster strategies, that could be less frequent or lower doses, as well as the greater supply of vaccines we should have on the market, balanced against the potential waning of the pandemic.

Frequent on lower doses as well as the greater supply of vaccines, we should have on the market balanced against the potential waning of the pandemic.

David Moline: Are there scenarios where the price per dose could be either materially higher or lower than what we're looking at in 2021? And then my second question is, from a modeling standpoint, should we be assuming anything in the model above and beyond what was talked about today that could be owed to the US government for the initial co-development of your COVID vaccine? Or is that what David was referring to with the royalties that are included as part of your cost of sales? And if so, should we just be assuming a generally stable rate going forward, or does it change at all?

Are there scenarios, where the price per dose could be either materially higher or lower than than what we're looking at in 2021 and then my second question is from a modeling standpoint should we be assuming anything in the model above and beyond what was talked about today that could be oh to the U S government for the initial co development of your Covid.

Asking or is that what David was referring to with the royalties that are included as part of a is your cost of sales and if so should we just be assuming a generally stable right going forward or those change at all.

Stphane Bancel: So there's a lot to unpack here. Let me start maybe on pricing. So this is quite interesting because, as you know, this is public information. They have some vaccines that have been made available to governments at $3 per dose. And as you know, we walked you through our pricing strategy back, I think, in August on the Q2 call.

So if there's a lot to what went back yet let me stop maybe on pricing.

So it's quite interesting because as as you know this is public information you know they also on vaccines that that'd be made their been able to go on line, we built off of those.

And as you know, we we walk through for pricing strategy back I think August on the <unk>.

Stphane Bancel: Vaccine is priced much higher, and I think it goes down to a few things, and the most important one is efficacy. Governments care about Saving Lives. Covenants care about getting the economies back on their feet.

The one on that.

Vaccine as price on my child.

And I think it goes down to a few things and there must be from that way they think I see.

Governments care about.

Saving lives.

Go on and that's K about getting back on on his back on their feet.

Stphane Bancel: And so what we're hearing from governments, literally, almost on a daily basis as we engage with our existing government contacts, but also new ones that are calling us, is that they are starting to make, you know, very clear differentiations between the different products that are either available already or that are getting very close to authorization. And, you know, I wish if I had a crystal ball last year; that would have built more manufacturing capacity for 21.

And so what we hearing from go on months, you know literally on Muslims W. Babies as we engage we've all existing go on my call back, but if so a new one day. According goes.

Is they stopped will be you know a very clear differentiation between the different products. That's all I've available on already or that that getting very close to authorization.

And you know I wish you, probably the Crystal ball last yeah.

That would have been at the moment you back from capacity about once you want.

But I.

Stphane Bancel: I did not anticipate, and I don't think anybody anticipated, that there would be such a difference in efficacy between vaccines, that the mRNA vaccine would be such a high performance. As you know, some countries decided to invest first in procuring vaccines in adeno or protein technology because they were better understood. And as we know what happened in 2020 in terms of, for example, in Europe, where several vaccines have been authorized, as you know, in the U.S., we have a lot today. I'm hopeful this will change soon. We have a VIAPAC meeting tomorrow.

I do know that she paid on I don't think anybody you did.

That that would be such as your friends. So I have to go see between vaccine that the amount of vaccine would be such high performance.

Yeah, you know some countries decided to invest sales too parochial vaccine and I didn't know I'll put the technical review because there were bits on disorder.

And as we know what's happening twenty-twenty income over clinical data.

That that that's been a big on so it's quite interesting debt Oh, so seeing how people are reacting in the countries. If you pull over media.

Hold on I'm, putting in Europe, where a simple vaccine that'd be no prizes you know in U S. We have enough to their I'm I'm will pull this week <unk> we've of your Pocklington Tomorrow.

But only to him on the vaccine uprising the U S. But if you look at what that being in some countries in Europe blogs by separating.

Different countries are on the world.

Stphane Bancel: I think governments, because of their scientific advisors and clinical advisors, and because of really the aim, [inaudible] I think, for at least the first time in my career, you know, being 20 years in this business, that in the media every day. You hear about vaccines on TV, in the newspaper, online, and you have product efficacy that's all over the news every day. This has never happened, to my knowledge, with any of our products.

I think governments because of authentic advise all day and clinical advisors and because of what a U b a.

Joseph pressure on the head got the same you know a husky those those on what these quite fascinating and I'm sure you'll hold on shelving you is that.

Exactly the first time, you're in in my area, you know being 20 years in this business day.

That.

In the media every day you hear about vaccines on T V.

In the newspaper on line and you have the product can take I see that the all over the news every day.

He hasn't had that happen to my knowledge plenty of a product and so you had these very interesting friend on me that's happening to you, but can you send them L. C is the pharmacy, but the consumer stool.

Stphane Bancel: And so you have these very interesting phenomena that are happening, too, that you have the clinician, the nurses, the pharmacist, but the consumers, too, that are believing that those products are not all the same. And this, I think, will be a very important differentiation as we move into 2022, as we move more to a traditional commercial market where it's not governments buying directly but the traditional kind of retail channel. And the impact, I think, of a consumer's desire to ask for a product when he or she walks into a pharmacy or their GP's office will be quite significantly different from what

That's believing that those products on those are the assignment and this I think would be a very important differentiation as we're moving to is one day too.

As we move them all to a traditional commercial market.

Some governments back directly but deflation on kind of a retail China. Andy in fact, I think of a consumer's desire to asphalt product when he or she walks into a pharmacy on <unk>, we'd be quite significantly different from what I used to be vulgar products.

Stphane Bancel: Maybe then I'd comment on the question about the cost of sales. So, Corey, what I did try to say early on was that, you know, we don't have precision in all cases. In the case of cost of sales, I would say there are puts and takes that we're monitoring. But we gave you the 20% because we feel confident that that's the right range, the right zone that we're in. And yeah, as we move through time, there's going to be more information as we ramp up our factory capabilities and answer some of the other questions. But I think you're good for now with that. Modeling is something, Okay, great.

Oh Wow.

[noise], maybe then I'd comment on the question about cost of sales so yeah.

You know Cory what I did try to say early on was the.

So now we don't have precision in all cases in the case of cost of sales I would say there puts and takes that we're monitoring.

Well, we gave you the 20 per cent because we feel confident that that's the right range right zone that we're in and yeah. As we move through time, there's gonna be more information as we ramp up our factory capabilities and answer some of the other questions, but I think you're you're good for now.

With the muddling assumption.

Okay, great. Thank you guys.

David Moline: Okay, great. Thank you. Your next question comes from the line of Geoff Meacham with Think of America. Hey guys, good morning.

An ex Gretchen concern I have just meet you might think of American.

Hey, guys. Good morning. Thanks for the question and also wanted to offer up our best wishes to to tell Ah.

Stphane Bancel: Thanks for the question. And I also wanted to offer up best wishes to a to tell, A question on manufacturing investments. I guess for Stephane, so I get the focus on variance with the booster and clearly you guys, you know, have to fund many assets progressing the pipeline, but how flexible are your manufacturing investments? I guess the question is, as cases globally continue to decline, is there a way to scale back some of that capacity should lower volumes become the norm? Thank you.

A question on manufacturing investments I I guess for stuff on so I guess I'll focus on variance with a booster and clearly you guys. You know have to fund many assets progressing the pipeline, but how flexible you know or your manufacturing investments I guess. The question is is is the cases globally continue.

The decline or is there a way to scale back some of that capacity should should lower volumes become the norm.

Stphane Bancel: Yes, good morning. Those are great questions. So in terms of the flexibility, as I described in my remarks, the only raw material that is different from the mRNA-1273 to the mRNA-1273.351 is only the plastic. You know, the enzymes are all the same. Philippine is the same, in the same equipment, in the same rooms, with the same people. So the flexibility of this technology is really incredible for people that have worked with recombinants, like I used to do at Lilly, and as you know, I trained as a biochemical engineer doing, you know, true cell and E. coli production in bioreactors. It is, it is literally, you come a week later.

<unk>.

Yes, but bony those are all great question, so into most of the flexibility as I described in my remarks.

The only on material that these different from.

Mm on its way of seventh you're free to them on its way to stay with you for your problems pretty 51, he's only a a classmate.

No the enzymes on the same.

Does the same thing the same equipment and the symptoms with the same people. So the the the flexibility of these technology is is really incredible for people that have worked we will come in on that cause like I used to do what Lillian as you know like train those about chemical engineer on.

Doing no choice and you could I production in Bioreactor <unk>. It is it is actually you come go we kept though.

Stphane Bancel: We use disposable reactors; you get new, you know, consumable plastic bags and so on as your reactor. And here you go again; you just need to change it, you take a different plasmid because we use disposable reactors and not stainless steel reactors. You don't have to spend a lot of time doing cleaning validation because we basically dispose of things. And so the flexibility is quite incredible. You just need a new plastic.

Where do you suppose able to react dolls, you'll get new you know constantly about plastic bags and so on his you'll react though and here you go again, you just need to change it to take a different bless me because we use these suppose your <unk> react all day thing they seem to react dolls, you don't have to spend you know lots of offending cleaning validation because we basically do you suppose of things.

And so the the fixing mutiny is quite incredible.

You you just need on your blessing it.

Stphane Bancel: And so, because it's not a very expensive part of the cost of the total cost of a finished product that is filled in a vial because you have to make the mRNA, you have to formulate it, and you have to fill it in a vial, we are doing a lot of plasmids at risk for variants. So that's a piece that I think makes this technology very unique in the ability to scale and the ability to be flexible to respond to different demands. You know, is there a world where we potentially might end up with a different combination of mutant boosts on the road in different continents? Maybe it will rain tomorrow. I don't know.

And so because it's so it's not a very expensive fault of the cost of the total cost of the finished.

Finished product at this field in Nevada, because you have to make the amount day you up to accommodate you then you have to fill it in Nevada.

Uhm.

Audrey a lot of blasphemy, that's where he's crawl viron.

Yeah. He was a great I'm trying to keep on the company were very very you still don't payment. So that's that's a piece that I think makes me sick no you're very unique on the scale and there'd be to be flexible to respond to the friend demand.

You know he's what were we put that she might end up with you from combination of you can boost on the road in different continents, maybe I don't know again, he would be market driven but let me see what the market requires we cannot go on Monday that the you know way and he is still 38 to be close to what the industry could do add the speed, which was so I think with some fries.

Stphane Bancel: Again, it would be market-driven. But if this is what the market requires, we can accommodate that in a way that is totally atypical to what the industry could do and at a speed which I think will surprise many, because, again, we make all the products in the same reactors. In terms of taking down the manufacturing capacity...

Many.

Because again, we make this in order to pull up to the same <unk> instead of taking down the manufacturing capacity. If we don't need to know if the 20th free all 24, the same amount of volume because of a massive boosting you know as me, saying.

Stphane Bancel: If we don't need, you know, let's say 23 or 24, the same amount of volume, because of a mass boosting, you know, as we say, It's actually interesting because, as you know, we have the Norwood plant where we have quite a lot of capacity. But we also have some capacity at Lonza in New Hampshire and also capacity in Switzerland, where they have their, you know, several lines of manufacturing. So we actually have quite a lot of flexibility to take capacity down at Lonza, either in the US or in Europe at different times. So that's one point.

It's it's actually interesting that goes on you know, we have but not with plants with we have quite a lot of capacity, but it was so we have some couple of Seattle on that in you I'm, sorry, and let's look up on <unk> in Switzerland, where they have several lines of manufacturing. So we have actually quite a lot of <unk> to pick up on me down.

On the highway in the U S and all in Europe.

From the standpoint, so that's why I'm probably be of a piece, we should not forget.

Stphane Bancel: The other piece we should not forget is ePipeline. And I will just make two comments, which I think are very important to understand why actually building manufacturing to that scale is going to be so enabling for Moderna to keep growing and growing and growing. First, the over-vaccination, you know; CMV is ready to move into phase three, as we said this year. We will give you updates on the flu program, but I will remind everybody that there is an approvable endpoint with a regulator for seasonal flu vaccines. And so we anticipate that the development of a full program would be pretty quick.

E the pipeline.

And I will just make two comments, which acting up very important and so on the same why actually I was building manufacturing include that Kelly is gonna be so enabling from one of the on that to keep growing and growing and growing <unk> is yoga vaccines, you know T. M. V. You know he's ready to move into a phase query as we said yeah.

We give you updates on the food program, but I will remind everybody that there is in the Caribbean and points. We've already you late softball season on a flu vaccine.

And so we Ain't cheap day that the development of the cuckoo we'd.

We'd be pretty quick.

Stphane Bancel: And as we discussed on the previous call, one of our kind of optimal target product profiles for down the road will be a product that is both seasonal flu with the current strain of flu, but also a boost for COVID-19 with a relevant strain at that time in the same dose. So we anticipate we should have, you know, high efficacy for seasonal flu, as well as mRNA virus. [inaudible] that we started with the vaccine to scale up is I go back to my original idea, which is, if you think about some of our products, as you know, 1273 requires 100 micrograms per human per dose.

And as we discuss on for just call one of all kind of Tal got pulled up profile called on the world we'd be.

A product that this book seasonal through Weaver ZIP code on spraying of true, but they're so a boost four four COVID-19, we've irrelevant sprained at that time in the same dose. So we have two papers would ever no height because people through I just noticed when I'm on the virus.

It's a pretty stressful world of ours like I like to go to the south coffee too virus and so that these well we're going we've from all vaccines coming to to the market and then there's also all day, perhaps the pipeline and the peace I think that's actually quite good force.

That we started we vaccine this getup does that go back to mess.

Which means if you think about some hall of product.

You know 12 73 requires 100 micrograms, so human cause those.

Stphane Bancel: But if you look at the chikungunya antibody program that uses the IV-formulated mRNA that we use also in the rare disease program, for example, what we showed is very good data at 0.1 milligram per kilo. So in a 70-kilo adult, this is seven milligrams compared to 100 micrograms.

But he could look at the chicken go on your antibody program. That's used no V. I V formulated M on the that we use them. So in the red the he's program for example, what's Michelle he's he's very good day, that's zero four 0.1 milligram per kilo.

So in a 70 keto add there'll be two seven many ground. Congrats went on to the micrograms. So as we move the property pipeline strawberry into development, but it's because you took <unk>, we're gonna need emotional mass over my knee and so I actually.

Stphane Bancel: So as we move the therapeutic pipeline further into development, but especially to commercial, we're gonna need much more mass of mRNA. And so I actually am spending a lot of time thinking, we want, how do we keep adding capacity to manage the entire pipeline as it's progressing? We have flexibility for a long time, that's why we did it this way. We want to be able to take chunks down if we need to.

On spending a lot of them thinking we were Juan how do we keep I didn't get a C D to my.

And that should be on fire pipeline. That's is progressing we we have the flexibility we've loans and that's why would you did this way with one so have you have you need to take your pick chumps down if we need to but if I was a betting on how we basically view that we're gonna be Moore, adding been taking a cup of tea down because about probably two of technical success with upstate all day long I believe.

Stphane Bancel: But if I were a betting man, I would bet with you that we're gonna be more adding capacity than taking capacity down because of the probability of technical success that I've said all along. Given the data we have, the medical need, and the biology we're able to do with both the Pentamer and GB. And so I'm not spending time. We want to think about how we can do more. Over. Okay. Thank you, Stephane.

We lost the C N V vaccine.

Even though they thought we have the medical need and about as you were able to do with both depends on their N G B and so I'll I'll spank them, we want to think about how do we do Moore okay.

Okay. Thank you stuff on.

Your next question comes from the line of Heart Dash thing with Oppenheimer income.

Stphane Bancel: Your next question comes from the line of Hartaj Singh with Oppenheimer. Great, thank you for the question. And Tal, I wish you the very best in your future endeavors. Thank you. The question I have is, you know, we're hearing more and more about some constraints in the raw materials, you know, that go into making vaccines, plasmids, things as simple as pipettes, etc. Can you just give us some color and visibility on where Moderna is with its partners, Lonza, and others, in this regard for 2021 and 2022, Stephane, and then, you know, could that be a rate- Thank you for the question.

Thank you for the question and tall I wish you. The very best you can tune into others. Thank you uhm. The the question I had is you'll be hearing more and more about some constraints in the wall materials, you know what that go into making vaccines you know <unk>.

I'm on it things as simple as pie paths et cetera can you just give it some color and visibility on <unk> you know with its partners logged on others. In this regard orange of 2021, and 2022 spot and then you know could that be a rate limiting step as you think about other modalities. Thank you for the question.

Thanks, So as we've we've simple along which is why we gave a range and up one number four expected.

Stphane Bancel: Thanks. So, as we said all along, which is why we gave a range and not just one number for expected supply this year. I think one number is a very dangerous strategy. As we said, those types of consumables are, of course, important. We're in a regulated business, and we cannot start to make a product until we have all the components, all the raw materials, the entire trained team, and so on and so forth. In an airplane, you have to check a lot of things before you can start the engine.

Supply in the yeah, I think one of them very very dangerous strategy.

E. As we said you know those type of consumable alcohol simple at times you know we've got you know regular business and we cannot stop you make a product going to have all the components order on what's a real.

The anti you are trained team and so on and so forth <unk> you know what I can and that plenty of to check on other things before you can solve the engine wedding in G. M. P. Manufacturing you have to do the same to ensure the quality on the safety of a product and so what I think the team is on a very good job last yeah. You guys. You recall, we started racing against these virus.

Stphane Bancel: Well, in GMP manufacturing, you have to do the same to ensure the quality and the safety of the product. And so, what I think the team did a very good job last year is, as you recall, we started racing against this virus in very early January. And it's in the late January time frame that we started to say, geez, this could turn into a pandemic, and we started to think bigger.

In very early January.

And it's in the late to January time frame that we started to say geez this could turn into a pandemic and.

And we started to think be go and so one of the team and I spend quite a lot of time is with things to think about okay. How do we go equipped to make a bead on those into like you on how would we do that.

Stphane Bancel: And so one of the team and I spent quite a lot of time as we started to think about, okay, how do we go? If we're to make a billion dollars in 21, how would we do that?

Stphane Bancel: You know, I used to run the supply chain at Lilly globally, and we went right away to start talking to our suppliers. And one of the things we had to do, and if you recall, we did an important capital raise in May of last year, which was very important for getting us to where we are today, was to get some suppliers because the increase in the mass of products we're ordering from them was so gigantic.

You know I used to when the selection that really globally, and we went to right away to stop to <unk> to talk to all suppliers and one that I think we have to do any of you. We could we did a nipple then kept the right in may of last year, which was very important for getting us where we asked what day you some supply those because the increase of mass.

Of product ordering from them west so gigantic.

Stphane Bancel: You know, a thousand times more in the 2000 times more than the year before. As you can imagine, many of them looked at us a bit funny and were very worried. They were worried that if the drug failed, they might be in trouble because they would have to get this type of increase in capacity, sometimes buy new equipment, hire more people, and buy their own raw materials to make our raw materials for our product. Does that make sense?

You know a thousand times I'm on the 2000 times moving the year before as you can imagine many of them looked at those habits funny and we're very worried.

They were worried that <unk> <unk>, let's say they might be in trouble because they we have to get these type of inquiries I've kept on the team.

Two sometime by new equipment, how you on what people buy the on raw materials to make all we're on that they were gonna fall product that makes sense.

Stphane Bancel: And so sometimes what we have to do with a team is actually pay for the entire purchase of products upfront, so that they will go and take that cash and start to invest to prepare for scale-up. So we took a lot of business risks last year that we thought were necessary to ensure we could deliver this year on the outputs from the manufacturing supply chain. So I think we're in a good place.

And so sometimes we have to do we have a team he's actually to pay up from.

<unk> <unk> <unk> <unk> products.

So that there we go and take that cash and stuff to invest to pick up on Scaleup Hall. So we took care of that that'd be <unk>, that's we force where necessary to ensure we could deliver on <unk> on the the outputs from the manufacturing supply chain. So I think we're in a good place.

Stphane Bancel: Do we have from time to time one component that gives us a sleepless night because it's very tight, it's happening because the ramp-up the industry is doing is unprecedented? So far, so good. And we are extremely on top of it, including as we do things like increasing capacity that we announced last night to right away not only buy new machines but right away place new orders for raw materials and make sure we keep increasing our safety stock so that we run this more and more as a regular business where you have safety stock on site.

Do we have it on from Central time, the one component that'd give us you know a sleepless night, because it's very tight it's happening because the ramp the ramp up the industry is doing is unprecedented.

But so far so good and we are extremely on top of it.

<unk> cause we do things that can you give us a fee that we announced last night too right away not only buy new machine, but try to weird place new old to us for on materials and make sure we keeping cuisine it'll save you stop so that we run this one mazo riegert all business, where you have 50 stuck on site. So if you just supply you as a bump in the road.

Stphane Bancel: So if your supplier has a bump in the road, you know, a pump breaking or something else, we are able to manage that variability, which is normally manufacturing without impacting our ability to maximize our own output.

No breaking or something else that we are able to <unk> diabetes, which he is normally manufacturing, we've all keep acting ability to maximize on up it okay.

Stphane Bancel: Great, thank you. Our next question comes from the line of Simon Baker with Redbird. Thank you for taking my questions, too, if I may, please. And firstly, just going back to cost of goods sold, you've helpfully given us the 20 percent figure for 2021, but presumably there will be some degree of variation through quarters. So, would it be fair to say you will be exiting the year at a figure lower than 20%, and I just wondered if you could give us some color on if that would be meaningfully below 20%. And then, moving away from COVID to CMV, you've said that the peak sales potential for the CMV vaccine could be around $2-5 billion per year.

Great. Thank you so.

My next question comes on the line assignment day care with that thing.

Thank you for taking my questions to from a police first teachers cutting back to cost of goods sold you you hopefully given us to 20 per cent figure a full 2021, uhm, but presumably there will be some degree of variation two courses. So.

Would it be fair he will be exiting the yeah I just think a low within 20 per cent and I just wanted to <unk>.

Give you some color on on if that would be meaningful utilized 20 per cent and then moving away from from Covid Uhm to C. N Z you said that the peak sales potential for the same things actually could be around $225 billion per year.

Stphane Bancel: It would seem that HPV is a pretty good roadmap for the potential in that space, and set against that, $2-5 billion looks quite conservative, so I was just wondering if I'm missing something in that analogy, or whether that $2-5 billion is out of an abundance of caution. Thanks so much.

It would seem that that H P. V is it's a pretty good roadmap for the potential in that snakes in church against that $2 billion to $5 billion looks looks quite consider that day. So I was just wondering if on missing something in that analogy with about two to 5 billion H Addison it's on <unk>. Thanks, so much.

David Moline: Yeah, maybe I'll take the first one on the cost of goods percent of sales. Our advice right now is to assume that I'm pretty stable through the year, including as we exit the year. So I would recommend you model it consistently. You know, there will be some ups and downs, and the ups and downs are more related to the mix of business and the price levels of the product than necessarily changes in the cost of the produced product.

Yeah, maybe I'll take the first one on the cost of goods percent of sales.

Our advice right now is to assume that's pretty stable through the year, including as we exit the year.

So I would I would recommend you model it consistently.

There will be some ups and downs and the the ups and downs are more related to the mix of business and the price levels of the product unnecessarily changes in the cost of the produce product and hence given we you know we get out towards the year and we don't.

David Moline: And hence, given that we, you know, we get out towards the year end, we don't have complete visibility on precisely what the book of business and mix will look like in terms of sales. Hence, some uncertainty around the precise percentage number. But, you know, again, I would advise just treating it as a constant for now. And then as we get better information, we'll give that to you as we move through the year.

Have complete visibility on precisely what the book of business and mixed will look like of sales.

Ah him some uncertainty around the the personalized percentage number but you know again I would advise just treating it as a constant for now and then as we get better information will give that to you as we move through the year.

Stphane Bancel: Thank you, David. So let me take the CMV question. So a few a few bit of corals on the 2 to 5 billion and your pixel estimate that we talked about a while ago. You know, we talked about that as a company that never had run phase 3 at the time, that never launched a product or got a product approved at the time, that had zero commercial employees at the time.

Thank you David So let me take the the C. M. B question. So a few a few get the calls on the 225 billion and you pick sales estimate that we talked about no way to go.

You know, we talked about that as a company that never had run the face for you at the time that that never laugher pulled up so I'll get the product approved at the time, but that's zero commercial and I'm sorry, you had the time. So we did the the on any of these women outside you know from Nashville calls within a company and we will struthers your team.

Stphane Bancel: So we did the analysis outside, you know, a commercial consulting company, and we were a strategy team, and the team here, many of us have commercial experience. So, you know, we tend to be cautious because, as a new company, we want to make sure that we build credibility, and that credibility in life has to be earned. And so I will just make the analogy to manufacturing in the sense that we built a billion dollars of capacity, and we were very upfront to the financial community about it last year when we did so. But we say, look, given the unknown on raw material supply, given the unknown on yield, we feel comfortable.

<unk> and the team here that many of us up a commercial experience.

So you know we tend to be cautious that goes as a new company, we want to make sure that.

We've been credibility and it could be in life is to be and so I will just make the another hate to manufacturing in the sense to know we'd be the <unk> cut off the tee and we're very up chrome to punish low community about it last year, when we need so, but we say look even the unknown on raw material supply given the end on on you.

We can get a consult day what are we forget that please from what I'm gonna do without.

Stphane Bancel: We should get at least $500 million out. And then, as we learn more, we move it to $600 million, and as we learn more, we move it yesterday to $700 million. So do I believe it is possible that we're going to sell more than $5 billion of CMV? Yes, I believe it's possible because it's an incredible medical need as the world develops.

And then as we really on more where you're moving to 600 on those we don't know you're moving it yesterday from seven out of the media.

So.

Do I believe it is possible that we're going to send them over and so I'd be on those C. N V. Yes, I believe it's possible.

Because it's it's an incredible on <unk>.

As the world develops.

Stphane Bancel: I think the piece one has to be careful about peak sales is peak sales when? Peak sales five years after launch or peak sales 25 years after launch? Because, you know, those vaccines are like an immunity-like product.

I think that the the peace want us to be careful about big sales as <unk> et cetera. So I could absolutely partial because that is 25 years. After lunch cause you know those vaccines on <unk> and <unk>.

Stphane Bancel: There's, of course, inflation; there's, of course, you know, developing countries that are becoming richer and richer. So is there upside to the number? I believe there is upside to the number, but that's our number right now.

Uhm there's of course inflation day is of course, you know do you have an opening on crazy that's all day.

Coming richer and we'd show so he's types of and number I believe is applied to the number but that's on them Bill right now the company.

Stphane Bancel: Great, very helpful, thank you. Your next question comes from the line of Mani Foroohar with SCB-Lear.

Alright, you're very helpful. Thank you.

Your next question comes from the line of many from high with a C V V or Inc.

David Moline: Hey guys, thanks for taking the question. Kyle, I'm looking forward to chatting with you later on today in our fireside chat. Excited to hear at some point what your next adventure is going to be.

Hey, guys. Thanks for taking my question Tal looking forward to chat with you later on standard size I tried excited to hear that something on your next adventure is going to be a quick and somewhat boring financial questions Uhm Uhm as <unk> as you guys are pretty clearly going to transition to profitability cash flow positivity on.

Stephen Hoge: A quick and boring financial question. As you guys are pretty clearly going to transition to profitability, cash flow, and positivity on a, at least in the near term, very durable basis, when would you consider changing your current treatment of your NLL allowances? How would you communicate that, how that flows through, how you communicate your financials from a modeling perspective? And then, secondarily, and maybe scientifically more interestingly, how do you interpret the data suggesting, at least for the adenoviral approach from J&J, but also from your own data and the other mRNA vaccine, that Hydr's appear to improve over time, and cellular immunity improves over time, and the gap in effic Am I interpreting it the same way you are, or am I missing something?

At least in the near term very durable basis.

When would you consider re changing your current treatment of your animal allowances Uhm, how would that how would you communicate that how that flow through how you communicate your financials uhm from modeling perspective, and then secondarily and maybe scientifically Moore interestingly, how do you interpret the data suggests.

Thing that at least for the AD no my viral approached J&J, but also from your own data on on the other end Marnie vaccine debt.

Titers of should improve over time, and so what I'm really improves over time.

And the gas interest inefficacy against the so called South African variance and the ancestral <unk> Hunter. It seems to close that would suggest to me. The 12 73 should have Sim.

Similar efficacy vs. The South African and <unk> on variance Uhm am I interpreting it the same way you are on my missing something.

David Moline: Yes, so maybe I'll cover the first one on the tax rate. As I said, what happens is, we're carrying this net operating loss with a full valuation reserve right now against the deferred tax asset that comes with it. So that will, of course, get released as we start generating pre-tax income, and it's likely based on the current book of business that we would consume during the year the entire loss carry forward. So that's point one.

Yeah, So maybe I cover the first one on the tax rate as I said, what happens is we're carrying this net operating loss with a full valuation reserve right now against the deferred to access that that comes.

With it so that will of course get released as we start generating pretax income and it's likely based on the current book a business that we would consume during the year the entire loss carryforward. So that's 0.1 0.2 is from.

David Moline: Point two is, from an accounting perspective, What happens is... you basically project a full year tax rate, including the consumption of that deferred tax asset, and then you start accounting quarter by quarter based on that average of the full year rate. So, actually, from an accounting perspective, it doesn't matter the timing of the release of the NOL, the Deferred Tax Asset and Evaluation Reserve. So that's why I tried to be clear with the mid-team percentage, including in Q1, because from an accounting perspective, you know, it would be stable unless we have some other changes that cause the full-year rate to change as we move forward. Hopefully, that's clear.

[noise], an accounting perspective.

What happens is you you basically project a full year tax rate, including the consumption of the deferred to access it.

And then you start accounting quarter by quarter based on the average of the full you're right. So would actually from an accounting perspective doesn't matter the timing of the release of the N O L. The deferred Texas from the valuation reserved so that's why I tried to be clear with the <unk>.

Teen percentage, including into one because from an accounting perspective simple.

It would be stable unless we have some other changes the cause the full your right to change as we move forward.

Hopefully that's clear.

Stephen Hoge: That's it. One of the things that I missed in my question, I actually meant versus severe disease and mortality in terms of the similarity and efficacy along as far as long-term follow-up. Sure. Yeah. So thank you for that question. So, let me take a stab at it.

And that's that that day, Sir I'm one of my <unk>.

But I Miss David My question I actually meant vs severe disease mortality in terms of the similarity inefficacy, how long as far as long as from follow up.

Sure Yeah. So thank you for that question. So let me let me take a stab on it you know I I think we are as you noted on when we had nearly essentially 100 per cent F. F. C against severe disease uhm, 94% against moderate amount of Mart or any disease, Uhm and I think that gives us great optimism about the.

Stephen Hoge: You know, I think we're, as you noted, we had nearly essentially 100 percent efficacy against severe disease, 94 percent against moderate mild to moderate, or any disease. And I think that gives us great optimism about the current 1273 vaccine that's been authorized is protecting us. And even if the new strains are slightly more virulent, they will be in good shape. I think the question, though, is whether or not at some point you would expect coronavirus immunity to wane. And that's because in all of the human circulating coronaviruses, that's what happens. The durability here has always been a question.

Current 12 73 vaccine that's been authorized is is protecting and even if the new strange or something more going on with it will be in good shape. I think the question. Though is you know at some point Uhm, you would expect coronavirus immunity to Wayne and that's because in all of the human circulating Corona viruses, that's what happened.

The durability here has always been a question is it a year's at three years five years I think as you see new strains emerge like the you know potentially concerning strange that we've been talking about non particularly the Republic to South Africa, and Brazil, you have to ask questions is that is that what does not look like not just now but what is that.

Stephen Hoge: Is it a year? Is it three years? Is it five years?

Stephen Hoge: I think as you see new strains emerge like the potentially concerning strains that we've been talking about, particularly in the Republic of South Africa and Brazil, you have to ask the question, is that what it looks like? Not just now, but what does that look like six months from now, a year from now? You know, as we start to move into a mode where we're going to see seasonal epidemics of coronaviruses, which we already see for the other coronaviruses, and you would have to assume will happen with SARS-CoV-2.

It looked like six months from now a year from now you know as we start to move into a mode, where we're gonna see seasonal epidemics of Corona viruses, which we already see for the other coronavirus isn't you would you would have to assume will happen with Sars Kobe too and it's it's for that it's those gaps in immunity then I think we're particularly focused on right now.

Stephen Hoge: And it's that gap in immunity that I think we're particularly focused on right now, which is to what extent do at-risk populations emerge with increased risk against these new strains? It's not something you can see in the data in the first 30, 60, 90 days post-vaccination in the current clinical trials. But it's something that you and I talked a lot about last year, and I think it's going to continue to be something we have to track closely as we look ahead.

Which is to what extent do you what to what extent in the future do at risk populations emerge with increased risk against these new strength.

It's not something you can see in the day to in the first 30 60 90 days post vaccination in the current clinical trials, but it's something that you <unk>. We did talk a lot about last year and I think he's going to continue to be something we have to track closely as we look ahead.

Stephen Hoge: I guess that would also imply that it might be useful to look at sera collected from the already vaccinated patients, 180, et cetera, further days out, and perhaps perform the same experiment described in the New England Journal of Medicine article. Would you consider destroying that data?

That's helpful. I guess that would on file so that.

That might be useful to look at sira collected from the alrighty vaccinated patience 100, eighties, etc. Further days out and perhaps are from the same the same experiment describe your new address on medicine article would you consider disclosing that data uhm or do you think it just makes more sense to just moved you're not into your novel Barrett and approaches and just.

Stephen Hoge: Or do you think it just makes more sense to just move to your novel variant approaches and just... with the Chronicle Data Seek for Itself, to fair questions? I mean, look, I think we will obviously update data on durability of responses across our phase one, phase two, phase three trials as that comes out. And looking forward, it's prudent. And if we can, we will be providing updates as well against the new strains.

With the clinical day to see for itself.

So to your question I mean look I think we will obviously update day to on durability of responses across our phase one phase to phase three trials as that comes out and looking forward. It's it's prudent and if we can we will be providing updates as well against the new strange I think what we're saying about the the variance.

Stephen Hoge: I think what we're saying about the variants and strategies against them is, you know, I think none of us want to be in a situation where we wait until there are reinfections and increased morbidity and get through a bit more mortality in a seasonal epidemic. For instance, this winter in the Northern Hemisphere is coming winter. And then say, OK, now it's time to boost people. And so as we're continuing to face an evolving virus that is changing its stripes and perhaps decreasing the durability of our immunity, we're trying to be very proactive with the three strategies we described.

<unk> and strategies against it is.

I think none of us want to be in a situation, where we wait until there are re infections and increase morbidity and and and God forbid Moore mortality in a seasonal epidemic for instance, this winter in the northern Hemisphere is coming on winter and and then sales you know tend to be boosting people and so as we're continuing just.

Based on evolving virus that is changing it stripes and perhaps decrease in that day. The durability of our immunity. We're trying to be very proactive with a three strategies. We described and I think we'll continue to follow things like the date of the appointment to which is you know how are we doing in terms of immunity blood people previously been vaccinated or previously infected.

Stephen Hoge: And then I think we all have to be following very closely what's happening in the Southern Hemisphere because as they move into their winter and a potential seasonal spike in the winter, as you normally see in temperate climates, it will help us understand, you know, to what extent are we still in a we have to stay ahead and a concerning phase of this epidemic or pandemic? Or is it a place where we start to get more and more confident that the vaccines contain the virus?

Well, obviously closely be following re infections and then I think we all have to be following very closely what's happening in the southern hemisphere, because as they move into their winter and a potential on potential seasonal now spike in in the winter as you as you normally see in temperate climates. It will help us understand you know to what extent are we still in.

<unk> a <unk> we have to stay ahead and then concerning based on this epidemic <unk> pandemic or is it a place where we start to get more and more confident that the vaccines have the virus under control.

Stephen Hoge: Great, that's very helpful. Thank you. At this time, I will turn the call back over to Stphane Bancel for closing remarks.

Great that's really helpful. Thank you.

This time I'll turn on a call back after Stephens on Sofa closing remarks.

Stphane Bancel: Well, thank you very much everybody for joining us. We look forward to seeing you at our next event on April 14th for Vaccine Day, and I wish everybody a safe day. Bye.

Well. Thank you very much everybody for joining us we look forward to seeing you on next event the on there from the 14th or vaccine day.

And I wish I, we used to say have a great day bye.

Operator: Thank you, ladies and gentlemen. That concludes today's conference call. You may now disconnect.

Thank you, ladies and gentlemen that cause today's conference call you may now disconnect.