Q1 2021 Moderna Inc Earnings Call

Yeah.

Dee Tamara: Good morning, my name is Dee Tamara, and I will be your operator today. Welcome to Moderna's first quarter earnings call. At this time, all participants are in listen-only mode.

Good morning, My name is D Tamara and I will be your operator today welcome to the Madonna's first quarter earnings call. At this time, all participants are in listen only mode.

Dee Tamara: 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'd like to turn the call over to Lavina Talukdar, Head of Investor Relations at Moderna. Thank you, Deep Tamera.

Following the formal remarks, we will open the call up for your questions. Please.

Please be advised that the call is being recorded.

At this time of like to turn the call over to Lavina pollute, the Dar head Investor Relations at Madonna. Please proceed.

Lavina Talukdar: Good morning, everyone. Thank you for joining us on today's call to discuss Moderna's first quarter 2021 financial results and business updates. You can access the press release issued this morning as well as the slides that we'll be reviewing by going to the investor section of our website. On today's call are Stphane Bancel, our Chief Executive Officer, David Moline, our Chief Financial Officer, Stephen Hoge, our President, Tal Zaks, our Chief Medical Officer, Karim Lagaf, our Chief Commercial Officer, and Juan Andres, our Chief Technical and Operations Officer.

Thank you Tamara.

Everyone. Thank you for joining us on today's call to discuss my journey. The first quarter 2021 financial results and business update 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 stiff on bunch of our Chief Executive Officer, David Levine, Our Chief Financial Officer, Stephen Hoge, Our President Tal <unk>, our Chief Medical Officer, Corine Mcgough, our Chief commercial officer, and one on dress, our chief technical and operations Officer.

Lavina Talukdar: Before we begin, please note that this conference call will include forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Please see slide 2 of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to update or revise the information provided on this call as a result of new information or future results being developed.

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

Please see slide 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 development.

Lavina Talukdar: On slide three, 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. I will now turn the call over to Stephane. Thank you, Lavina. Good morning or good afternoon, everyone.

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

I will now turn the call over to Stephane.

Thank you Laura.

Good morning, or good afternoon, everyone. Thank you for taking the time to join of Q1 'twenty from Q1 conference call.

Stphane Bancel: Thank you for taking the time to join our Q1 2021 conference call. We'll start with a quick business review of the quarter before Cohen walks you through commercial updates. David Wilber will walk through the key financials, and Stephen will provide a clinical update, especially new human data about two of our COVID-19 booster candidates, mRNA-1273, the currently authorized vaccine, and mRNA-1273.351, the variant-specific booster to B.1.351, first identified in South Africa. I will then come back.

We stopped by quick from me has review of all of a quarter before going on walks you from commercial update David will then walk through program keep on naturals.

Stephen will provide the clinical update, especially new human data about the tool of COVID-19, we stuck on the rates.

It's one of the 70 free the currency of the rise vaccine and the amount of its 70 freed up from <unk> 51 of the virus specific boost too to be 151 first I don't see five day in South Africa.

And the come back to growth.

Stphane Bancel: The Moderna COVID-19 vaccine is now available and protecting people in 37 countries around the world. And with WHO authorization last Friday night, the number of countries where the vaccine will be available will go up significantly. In the first quarter alone, 102 million doses have been shipped, and many tens of millions of people have been fully vaccinated or received their first dose. Twelve months ago, in Q1 2020, Moderna had never run a phase 3 clinical study. Never gotten a product authorized by a regulator, and never made $100 million in a single quarter. Not even $10 million, not even $1 million.

The most of the COVID-19 vaccine is now available and protecting people in 57 countries around the world.

And we've been deblois edge authorization last Friday nights, the number of countries well vaccine would be available will go up significantly.

In the first of all to all of them well.

Whenever the end 2 million both of you have been shipped and many tens of millions of people have been fully vaccinated all received the sales tools.

12 months ago in Q1, 2020, well then that I've never run a phase III clinical study.

Nevertheless on the product authorized by the regulator.

And never made the half of million daus in the single of wholesale.

No Stephen.

Stephen the 1 million doses.

Stphane Bancel: I am very proud of what the Moderna team has achieved, but most importantly, I am very, very thankful for their impact on the world and the incredible personal sacrifices that our team has made to help protect fellow human beings around the world. This is very humbling, and I'm fortunate to lead Moderna at this moment. I'm also thankful for the Moderna scientists, engineers, doctors, and team members who have worked relentlessly over the last 10 years to be ready for when the virus emerges in late 2019.

I am very proud of what the monarch Kim has achieved but most importantly, I am very thankful for the impact on the world and the incredible customer of sacrifices that the team has made it the word protect fellow human beings are on the world.

She is very humbling and the unfortunate to lose more than that in this moment.

I'm also thankful for all of them whether on the fastest engineered ductile and team member of well work relentlessly over the last 10 years now to be ready for when the virus emerged in late 2019.

Stphane Bancel: We invented technology to produce safe, well-tolerated mRNA vaccines, which made it possible for us to chase this virus. The company achieved revenues of $1.9 billion in Q1 2021, of which $1.7 billion were COVID-19 vaccine product sales. The net income for that period was $1.2 billion.

We invented the technology to produce safe, well tolerated and mommy vaccines, which made it possible force to chase the source.

The company achieved revenues of $1 9 billion in Q1, 2021 of which went from $7 billion, where COVID-19 vaccine product sales.

The net income of a pattern.

The <unk> 2 billion.

Stphane Bancel: This marks the company's first GAAP profitable quarter in its history after nine years of operating losses. At the end of 2021, we had cash and cash investments of $8.2 billion. David will give you more details in a few minutes.

This marks the company's first GAAP profitable quarter, you need the.

The history.

Sales of operating losses.

At the end of the 20th of Lucky, where we have cash and cash investments of $8 $2 billion.

David will give you more details in a few minutes.

Stphane Bancel: We increase our 2021 supply forecast once again. We now believe that we should be able to supply 800 million doses in 2021, and we are still aiming for 1 billion doses a year. The total advance purchase agreements signed for delivery in 2021 have been increased to $19.2 billion. We are happy to report this morning an interim update on our team co-study.

We increased our 20th of Lucky ones supply forecast once again.

We now believe that we should be able to supply eight hundreds of millions of those easy in 2041, and <unk> four 1 billion of those used for the year.

The total of adverse, especially if the agreement thankful.

Thankful of delivery in 2021 have been increased to $19 2 billion the at all.

We are happy to report this morning on interim updates to our clinical study.

Stphane Bancel: The initial interim analysis of a Phase 2-3 team co-study of mRNA-1273 showed vaccine efficacy against COVID-19 of 96%, and mRNA-1273 was generally well tolerated with no serious safety concerns identified to date. We're also on track to start this month the filing of our rolling BLA-2B FDA application for COVID-19 vaccine mRNA-1273. Outside of COVID, we are the first as a company, and that is the dosing of our first patient with an mRNA therapeutics candidate against a rare genetic disease, propionic acidemia, a genetic deficiency in the liver, with a candidate mRNA 3, 9, 2, 7. One of the things that I'm most excited about is where we are going.

The initial interim analyses of the phase II <unk> study of the Montney, it's sort of 73 showed the vaccine efficacy against COVID-19 over 96% and then on the it's worth empty for Ya Western Oni Wednesday, the Rite aid we've no serious safety concerns about the types of date.

We're also on track to start the small the filing of a rolling BLA to the FDA for COVID-19 vaccine the amount of its web site antifreeze.

Outside of COVID-19.

We added another first as a company.

And at these videos Igawa from space fence within the Montney for operating as candidates against the rare genetic disease propionic assay the EMEA.

The genetic deficiency in the lever we've of candidate mrna three banks from seven.

One of the things the time of the most excited about is where we're outgoing.

Stphane Bancel: The Q1 results highlighted above are the consequence of last year's work and decisions we made. So as I look to where Moderna is going, I get very excited by the level of increased investment across the board. Using a strong balance sheet to invest to scale Moderna. There are two numbers for some coral.

The Q1 results highlighted the bulk of the cost of quest of last Telework and decisions we make.

So as I look to win with the highest growing I get very excited by the level of our increase the investments across the bowl.

Do you think of strong balance sheet to invest to scale Madonna the two number of calls from Carl.

Stphane Bancel: In Q1 2021, our R&D investments were approximately four times higher than the R&D investments in Q1 of last year. Not 4%, not 40%, four times higher. For all of you who have known us for many years,

In Q1 2021 on the investments were approximately four times higher than the R&D investments in Q1 of last year and are focused on.

People.

Four times higher.

For all of your web of known us for many years.

Stphane Bancel: Moderna has been built as a digital enterprise since the early days, but we now have the opportunity to do much more and to build new functions like clinical trial operations, pharmacovigilance, and commercially digitally from the get-go. So looking at the next five to 10 years, we're investing intensely in digital automation and AI. Our plan for 2021 is to invest three times more in digital than in fiscal year 2020. Last week, we announced that we have decided to invest to increase our 2020 supply to up to 3 billion doses.

Well then that is being built at the digital at the pricing so early days.

But we now have the opportunity to do much more and to build new functions like clinical trial operations pharmacovigilance commercial digitally from the get go.

So looking at the next five to 10 years, we're investing intensively in digital automation and AI.

The plan for 2021 is to invest three times of mall in digital Inc.

Calendar 2020.

We announced last week that we have decided to invest to increase all of 2020 of supply to up to 3 billion abilities.

Stphane Bancel: Let me share with you why we decided to recommend to our board to invest at that scale. First, let's talk about the science of the SARS-CoV-2 virus. New variants of concern continue to emerge around the world, and we believe that over the next six months, as the Southern Hemisphere enters its fall and winter, we could see more variants of concern emerge.

The Michelle review, why we decided to recommend to our bulk to invest at the scale.

First let's talk about the science of soft COVID-19 two virus.

New balance of concern continues to be amount of around the world and.

And we believe that over the next six months at the southern Hemisphere at the rates fall and winter, we could see more of a rest of comfort on the mesh.

Stphane Bancel: We have said for a while now that we believe booster shots will be needed, as we believe that the virus is not going away. We also believe from a scientific standpoint that the highest efficacy booster over time will be provided by a multivalent variant-specific booster. The market has changed quite a lot versus what we knew six months ago.

We have said of all right now that's we believe booster shots will be needed as we believe the the virus is not going away.

We also believe from the standpoint at the highest efficacy of boost the overtime will be provided by T. Bela very specific bluestone.

Second.

The market strength quite a lot of investors, what we knew six months ago.

Stphane Bancel: First, mRNA vaccines have emerged as the best-in-class vaccine in the world. High Efficacy, Good Tolerability Profile, Ability to Scale Manufacturing, and Speed to Chase Variants in the Many companies are still in the clinic with their first-generation vaccine, while we're in the clinic with variant-specific boosters. [inaudible] As we are talking to governments around the world, in the West and in the East, in the North and in the South, we are hearing loud and clear from the markets.

Phil.

And then on the vaccines have emerged as the best in class vaccines high efficacy <unk>.

Tolerability profile.

The scale of manufacturing and speed to chase the balance in the tank.

Many companies of scale in the clinic, we get the first generation vaccine, where we are in the clinic, we balance specific boost sales.

More importantly, as we're talking to go on and that's around the world in the west and in the east and the North and South we're hearing loud and clear from the market supply us with more of them on the vaccine and from primarily salaries and.

Stphane Bancel: Supply us with more mRNA vaccines for the primary series, and suppliers with more mRNA vaccines in the future for boosters for 2022 and 2023. There is a big shift versus what the market perceived six or nine or 12 months ago, when protein vaccines or adenovaccines were thought to be the answer to the pandemic. We believe it has become an M&A market for COVID-19 vaccines. Third is the

And suppliers with more of them on the vaccine in the future for <unk> for 2022 and 2020 of free.

The big shift versus what the market go Stephen six or nine or 12 months ago when protein the vaccine or other vaccines, we are thought to be the onset of the pandemic.

We believe it does become an amount of end market for COVID-19 vaccine.

Phil is all on pipeline.

Stphane Bancel: We believe we will bring to market several more products in the next few years that will add to the market demand for COVID-19 boosters for years. The flu vaccine, as we discussed at the vaccine day, and our goal is to have a seasonal flu vaccine combined with a COVID-19 booster in a single-dose product, will have strong clinical data for RSV vaccine and CMV vaccine. Plus, we have seven programs in clinical studies in three therapeutic areas and more programs to move from preclinical development to clinical studies in a month.

We believe we will bring to market several more product in the next few years that will add to the market demand for COVID-19, <unk> flu vaccine as we discussed of the vaccine day and our goal is sort of a seasonal flu vaccine combining the COVID-19 balance booster in the single dose product.

With the strong clinical data for RSV vaccine on CMV vaccine, Chris we have seven programs in clinical studies, the free for a particular area and more programs. The move from preclinical development of clinical studies in amongst the COVID-19.

Stphane Bancel: So we decided to build capacity to deliver up to 3 billion doses of supply in 2022 to serve both the North and the South. We are doubling our drug substance supply in Europe and equating it by 50% with drug substance supply in the US. We are, of course, adding fielding capacity in the US and Europe at our existing partners, but we are also adding new ones as we speak. More to come. Another piece of feedback we're hearing from the market is that Moderna has the best in-class mRNA vaccine. Shipment at minus 20 Celsius and storage not at minus 70 Celsius. Small cartons of $100. Storage up to 6 months in a standard freezer and 4 weeks in a regular refrigerated temperature.

So would you say per mill capacity capability of up to $3 billion of supply in 'twenty 'twenty, two two share above enough on the south.

Well, the doubling of our drug substance of supply in Europe, and increasing by 50% by the drug substance supply in the U S.

We're of course, adding feeding capacity in the U S and Europe at the extinct coffeehouse. The first of all I think a new one as we speak multiple.

Another piece of feedback we're hearing from our market is that small down the as the best in class of the amount of vaccine shipped method of minus 20 sales to some storage not the minus 70 associates.

Mark I'll phones off of one of the abilities. So range up to six mark in terms of freezer and four weeks and we get out of repurchases pretzels.

Stphane Bancel: The only authorized mRNA vaccine that does not require on-site dilution. We believe this is an even more important feature today but will be more important in the future in 2021, 2022, and 2023 as we move to a booster market decentralized in pharmacies and health doctors. We believe we have the best mRNA vaccine authorized, and we continue to improve our product to continue to have the best in-class product in the mRNA market. We are delighted to announce this morning the start of the dosing of our first patient in our Phase 1-2 study with Proprionic Acidemia. The study is called Paramount.

The audio of Horizon mountain the vaccine that does not require on site. The outer shell. We believe this is the name and even more important feature to there, but it will be most of the future of in 'twenty. One 'twenty two 'twenty three as we move to boost the market the decentralized and pharmacy set a doctor's office.

We believe we are investing on the vaccine of horizon, and we are working to improve our product continue to have the best in class product of your money market.

We are delighted to announce this morning, the start of the dosing of our first patient in the phase <unk> study, we appropriately academia of disease. The study is called Paramount.

Stphane Bancel: This is yet another milestone for Moderna. Not only do we have, I believe, the most innovative infectious disease vaccine clinical pipeline, but we also have therapeutics candidates in clinical studies in oncology, in cardiology, and now in rare diseases. Let me close my remarks on this familiar slide.

This is yet another milestone from Madonna.

Not only the we have I believe the most of the about TV picture of these vaccine clinical pipeline, but it's one of those.

So a fair predictor candidates in clinical studies in oncology and cardiology and narrowing of rapid antique disease.

Let me close my remark on the is firmly on slide.

Stphane Bancel: We now have 1,500 employees who have recently incorporated Moderna Japan KCare, and we'll continue to build our commercial network with a push to Asia-Pacific in 2021. And given a strong balance sheet of $8.2 billion, we're going to continue to accelerate and invest to allow Moderna to scale and maximize the impact of a broad mRNA platform to help as many people as we can. Let me share our perspective on yesterday's afternoon announcement by the United States Trade Ambassador that the U.S. government will support waiving intellectual property protection for COVID-19 vaccines.

We now have a pause on the 500 employees.

Wherever it is that we incorporated the modern ended up on take care.

And we'll continue to build on commercial network, we were pushed to Asia Pacific in 2021.

And given the strong balance sheet of $8 2 billion, we're going to continue to accelerate and invest to what I'm going to ask the scanner and maximize the impact of a broader amount of platform.

As many people as we can.

Let me share our perspective on the yesterday afternoon, the almost spent.

United States of try the MSR, though that the U S. Go on that we see both waiving intellectual property protection for COVID-19 vaccines.

Stphane Bancel: We believe this will not help supply more mRNA vaccines to the world any faster in 2021 or in 2022, which is the most critical time of a pandemic. There is no ideal mRNA manufacturing capacity in the world.

We believe this will not help supply more in montney of vaccines to the world any faster in two of you don't get one or 2022, which is the most critical time of of pandemic.

There is no either ammonium manufacturing capacity in the world.

Stphane Bancel: There is no industry of talented individuals who are skilled in the art of making high-quality and high-purity GMP-grade mRNA vaccines. There are no companies that have developed manufacturing processes, purification processes, and analytical processes that would allow them to quickly run a clinical trial, and if approved by regulators around the world, then provide hundreds of millions or billions of supplies of mRNA vaccines. We have announced in a company statement issued on October 8, 2020, that during the pandemic, Moderna will not enforce COVID-19 related patterns.

There is no industry of talented individuals well skilled in the alpha of making high quality and the high purity GMP grade down on the vaccine.

The other companies who have developed manufacturing processes could we could get you on processes, and then think of processes that allow them to quickly ramp of clinical trial.

And if approved by regulators around the world when provide hundreds of millions of billions of supply of them on the vaccine.

We have announced in the company's statement issued October eight 2020 that during the pandemic more than that will note in force COVID-19 related patents you can find that the statement on our website.

Stphane Bancel: You can find that statement on our website. We believe that the best way to end the pandemic is what we're currently doing, to maximize supply in 2021 to protect as many people as we can. To build additional capacity, which we announced last week, to get up to 3 billion doses of authorized mRNA vaccines for 2022, 2023, and beyond. And third, to continue to adapt the vaccine to have the highest efficacy vaccine with variant-specific booster, for which we announced very encouraging clinical results yesterday. Let me now turn to Corinne to give you a commercial update. Okay, Corinne?

We believe that the best way to when the pandemic is whats currently the Inc.

First to maximize supply in 'twenty to what the went to protect as many of you pull as we can.

Second to build additional capacity, which we have announced last week to get up to $3 billion.

Of write them on the vaccines for 2022 2023 and beyond.

And Phil to continue towards the vaccine two of the highest efficacy of vaccine with very specific booster for which we are now very encouraging clinical results yesterday.

Let me now soft of Corey can give you of commercial Okay go ahead.

Corinne: Thank you, Stephane. And good morning or good afternoon, everyone. As all of you already know, Moderna's COVID-19 vaccine is our first authorized product, and on the back of it, we have turned into a commercial company very quickly. So today, I'm delighted to give you an update on the commercial progress in the first quarter. I will start with our most recently signed supply agreement. Those that occurred in the first quarter and at the beginning of the second quarter this year.

Thank you Stefan and good morning, or good afternoon, everyone.

As all of you already know Lady on this COVID-19 vaccine is our first authorized product and on the back of the Hbf turn into a commercial company very quickly. So today I'm delighted to give you an update on the commercial progress in the first quarter.

I will start with our most recently signed supply agreements.

That occurred in the first quarter and at the beginning of the second quarter. This year.

Corinne: I am particularly happy to announce our agreement with COVAX, which will provide access to our vaccine to millions of people in low- and middle-income countries and is in keeping with our Global Access Principles. In total, our COVAX agreement is for 500 million doses for delivery in the 2021 and 2022 periods. Specifically, in 2021, Moderna will begin delivery of 34 million doses in the fourth quarter of 2021, and Covax will have an option for an additional 466 million doses in 2020. We are grateful to all the collaborative efforts of CEPI, Gavi, UNICEF, the World Health Organization, and the Moderna commercial teams in making this important supply agreement a reality.

Im, particularly happy to announce our agreement with <unk>, which will provide access to opex in two minutes of the people in low and middle income countries and is in keeping with our global access principles.

In total our Comex agreement is for 500 million doses for delivery in the 2021 and 'twenty 'twenty two period.

Specifically in 2021, <unk> will begin delivery of 34 million doses in the fourth quarter of 2021.

<unk> will have an option for an additional 456 million doses in 2022.

We are grateful to all of the collaborated Inc. First of CPE, Debbie UNICEF, the World Health organization and the money on the commercial teams in making this important supply agreement of reality.

Corinne: Moving now to the additional supply agreements signed for both 2021 and 2022. We have signed additional supply agreements with Israel for 5.3 million doses in 2022, with an additional option of 17.3 million doses for 2022 and 2023, and with Switzerland for 7 million doses in 2022, with options for an additional 7 million in late 2022 and 2023. We have also signed new deals for 21 deliveries with Boswana, Brunei, and, in addition, we have also signed an agreement with Zulik Pharma, our distribution partner in Southeast Asia, Hong Kong, Macau, and Taiwan.

Moving now to the additional supply agreements signed for both 2021 and 'twenty two.

We have signed additional supply agreements with Israel for $5 3 million doses in 2022 with an additional option of $17 3 million doses for 'twenty, two and 'twenty three.

And with Switzerland for 7 million doses in 2022 and option for an additional $7 million in net 2022 and 'twenty three.

We have also signed new deals for 'twenty, one delivery with the swimming relay and in addition, we have also signed an agreement with <unk> pharma, our distribution partner in Southeast Asia, Hong Kong, Macau and Taiwan.

Corinne: In total, we announced advanced purchase agreements totaling 845 million doses to be delivered in 2021 to the countries that are listed here on the slide. And we continue to have discussions with countries, both those we have already contracted with and new countries, for supply in 2022 and beyond. In our discussions, as Stephane said, we are hearing consistently from governments that, in their view, there is no other technology that provides the high efficacy of mRNA vaccines and the speed necessary to adapt to variants while, at the same time, allowing reliable scalability of manufacturing.

In total we announced advanced purchases of agreements.

845 million doses to be delivered in 2021 to the countries. That's on listed here on the slide.

And we continue to have discussions with the countries. Both of those we have already contracted with and new countries for supply in 2022 and beyond.

The discussion.

As Stephen said, we are hearing consistently from governments that India view. There is no. Other technology that provides the highest efficacy of mrna vaccines and the speed necessary to adapt to the audience I just him time, allowing reliable the scalability of manufacturing we are.

Corinne: We are grateful for the trust placed in us by the various governments we have signed agreements with, and we look forward to supplying the vaccine to other countries and helping end the pandemic and getting ahead of variants. Let me now turn to product sales. Our product sales for the first quarter of this year were $1.73 billion, and we recorded delivery of 102 million doses. Product sales in the U.S. were approximately 1.4 billion, and sales outside of the U.S. to the EU, Canada, Switzerland, Israel, and Singapore were approximately 400 million for the 14 million doses delivered in the first quarter.

Grateful for the trust placed in us from the various governments, we have signed agreements with <unk> and we look forward to supplying the vaccine to other countries and helping and endemic and getting ahead of variance.

Let me now turn to product sales.

First product sales for the first quarter of this year we have.

The $1 73 billion.

And when we call date for the delivery of 102 million doses.

<unk> sales in the U S, where approximately $1 4 billion in sales outside of the U S to the EU, Canada and in Israel, and Singapore were approximately 400 million for the $14 million is delivered in the first quarter.

Corinne: In the U.S., we successfully completed the delivery of the first 100 million doses to the U.S. government within 100 days of emergency use authorization, and we expect to complete the delivery of the second 100 million doses to the U.S. government before the end of the second quarter.

In the U S. We have successfully completed the delivery of the first 100 million doses to the U S government with the 100 days of the emergency use authorization and we expect to complete the delivery of the second one habit and the enthusiasm to the United States government before the end of the second quarter.

Corinne: As you know, U.S. production started earlier and is roughly one quarter ahead in production ramp-up. As such, in the second quarter of 2021, we expect the ex-U.S. ramp to be similar to that of the U.S. ramp in the first quarter. To close, I want to reiterate that as we continue to produce and roll out vaccines into the global market, we are humbled and proud to be part of the solution. I will now turn the call over to David Malina.

As you know the U S production studied earlier Andy's roughly one quarter ahead and production ramp.

Such in the second photo of 'twenty, one we expect the ex U S ramp to the similar to that of the U S strength in the first quarter.

To close I want to reiterate that as we continue to produce in the rollout vaccines into the global market, we are humbled and proud to be part of the solution.

I will now turn the call over to David.

David Malina: Okay, thank you, Corinne. Today, as with our last earnings call, we're presenting our results primarily on a US GAAP basis. In some cases, we also provide additional detail to provide greater clarity on underlying trends. Against this background, we are providing an analysis of actual 2021 first quarter results along with an updated view of key drivers of financial performance going forward. Turning to slide 18.

Okay. Thank you Kieran.

Today is with her last earnings call. We are presenting our results primarily on the U S GAAP basis.

In some cases, we also provide additional details to provide greater clarity on underlying trends.

With this background, we are providing an analysis of actual 2021 first quarter results along with the updated view of key drivers of financial performance going forward.

Turning to slide 18.

David Malina: Total revenue was $1.9 billion in the first quarter of 2021 compared to $8 million in Q1 of last year. Following our first ever product sales of $200 million in December 2020, we recorded product sales of $1.7 billion for our COVID-19 vaccine in the first quarter of 2021. Grant and collaboration revenue increased to $204 million in Q1, primarily due to increases in grant revenue from BARDA to accelerate the development of our COVID-19 vaccine. Cost of sales was $193 million in the first quarter, benefiting substantially from previously expensed pre-commercial inventory costs, which I will discuss in more detail on a later slide.

Revenue was $1 9 billion on the first quarter of 2021.

The $8 million in Q1 of last year.

Following our first step of product sales of $200 million in December 2020, we recorded product sales of $1 7 billion for COVID-19 vaccine in the first quarter of 2021.

Grants and collaboration revenue increased to $204 million in Q1.

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

Cost of sales were $193 million of the first quarter.

Benefiting substantially from previously Expensed pre commercial inventory costs, which I will discuss in more detail on the later slide.

David Malina: Research and Development expenses were $401 million for Q1 2021 compared to $115 million for the same period in 2020. The higher spend was driven by increased COVID-19 vaccine clinical development activities, including our announced efforts around booster, variant-specific, and multivalent vaccine candidates. Headcount increases, as well as pharmacovigilance activities related to our COVID-19 vaccine, also contributed to the year-on-year expense increase. Selling general and administrative expenses were $77 million for Q1 2021 compared to $24 million for the same period in the prior year.

Research and development expenses were 401 million for Q1 2021.

<unk> two of $115 million for the same period in 2020.

The higher spend was driven by increased COVID-19 vaccine clinical development activities, including our announced efforts around booster very specific multivalent vaccine candidates head.

Head count increases as well as pharmacovigilance activities related to our COVID-19 vaccine also contributed to the year on year expense increase.

Selling general and administrative expenses were 77 million for Q1 2021 compared to 24 million from the same period in the prior year.

David Malina: The growth in spending was driven by increases in personnel, outside services, and costs associated with commercializing our COVID-19 vaccine globally. Provision for income taxes was $39 million in Q1 2021, reflecting a benefit from utilization of our net operating loss carry forward, as well as discrete items. I will provide further context on the following slides. We recorded net income of $1.2 billion for Q1 of this year, compared to a net loss of $124 million for the same period of last year. Earnings per share on a diluted basis were $2.84.

The growth in spending was driven by increases in personnel outside services and costs associated with the commercialization of our COVID-19 vaccine globally.

The provision for income taxes was $39 million in Q1, 2021, reflecting a benefit from utilization of net operating loss carry forward as well as discrete items.

I will provide further context on the following the slides.

We reported net income of $1 2 billion for Q1 of this year compared to a net loss of $124 million in the same period of last year.

Earnings per share on the diluted basis was $2 of 94.

David Malina: Please note that our share count on a diluted basis now also includes the effect of outstanding options and RSUs as we have begun to be profitable. Previously, when we were in a net loss position, the Basic and reported diluted number of shares were the same. Turning to cash and selected cash flow information on slide 19, we ended Q1 2021 with cash and investments of $8.2 billion compared to $5.2 billion at the end of Q4 2020.

Please note that our share count on the diluted basis. Now also includes the effect of both standard and the options on our of shoes as we began to be profitable previously when we were in the net loss position basic and reported diluted number of shares were the same.

Turning to cash and selected cash flow of information on slide 19.

We ended Q1 2021 with cash and investments of $8 2 billion compared to $5 2 billion at the end of Q4 2020.

David Malina: The increase is driven by our commercial sales and additional customer deposits received in the first quarter for future purchases of our COVID-19 vaccine. Net cash provided by operating activities was $2.97 billion in Q1 of this year, compared to net cash used in operating activities of $106 million in Q1 of last year. The reversal from net operating cash outflow to cash inflow was driven by our commercial market entry for the entire quarter.

The increase is driven by the commercial sales and the additional customer deposits received in the first quarter for future purchases of the COVID-19 vaccine.

Net cash provided by operating activities was $2 97 billion in Q1 of this year.

<unk> the net cash used in operating activities of $106 million in Q1 of last year.

On the reversal from net operating cash outflow to cash in flow was driven by the commercial market entry for the entire quarter.

David Malina: Similar to last quarter, before providing an updated financial framework for the remainder of 2021, let me summarize a few areas from our Q1 results that are important to keep in mind when modeling expected 2021 financial performance, starting with product sales on slide 20. We started last year to build two distinct supply chains, one in the U.S. and one outside the U.S. for the rest of the world. Our supply chain scale-up in the U.S. was roughly one quarter in advance of our ex-U.S. supply chain, which is reflected in the geographic sales mix in Q1.

Similar to last quarter before providing an update the financial framework for the remainder of 2021, let me summarize a few areas from our Q1 results that are important to keep in mind when modeling expected 2021 financial performance.

Starting with product sales on slide 20.

We started last year to build two distinct supply chains, one of the U S and Juan outside the U S for rest of World markets.

Supply chain scale up in the U S was roughly one quarter in advance of our ex U S supply chain, which has reflected the geographic sales mix in Q1 as.

David Malina: As we move forward in Q2, the ex-U.S. supply chain is also ramping up toward full capability. Turning to slide 21, the cost of sales includes the cost of goods manufactured, logistics and warehousing costs, as well as third-party royalty costs.

As we move forward in Q2 of the ex U S supply chain is also ramping up toward full capability.

Turning to slide 21.

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

David Malina: We will begin capitalizing our COVID-19 vaccine inventory costs in December of 2020, following the COVID-19 Vaccine Emergency Use Authorization. Based upon our expectation that these inventory costs would be recoverable through commercialization of the vaccine, 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 and started 2021 with a remaining balance of $187 million of zero cost inventory.

Begin capitalizing our COVID-19 vaccine inventory cost in December of 2020, following the COVID-19 vaccine emergency use authorization.

Based upon our expectation that these inventory costs would be recoverable through commercialization of the back seat.

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.

And started 2021 with the remaining balance of 100, the Navy 7 million of zero cost inventory.

David Malina: Almost the entire balance, or $184 million, was sold and benefited our cost of sales in Q1 of this year and hence will not further impact future quarters in a material way. If inventory sold during the first quarter was valued at actual cost, our cost of sales would have been $377 million, or 22% of our product sales.

Almost the entire balance of $184 million was sold the benefit of our cost of sales in Q1 of this year.

And the hands will not further impact future quarters in the material way.

Yes, the inventory sold during the first quarter was valued at actual cost our cost of sales would've been $377 million or 22% of our product sales somewhat favorable to what we expected driven by favorable yields in our U S production facilities.

David Malina: Somewhat favorable to what we expected, driven by favorable yields in our U.S. production facility. Now turning to our cash and investment position on slide 22. The cash and investment balance reported as of March 31 was $8.2 billion, up from $5.2 billion as of December 31, 2020. The increase is primarily driven by a net increase in customer deposits for future product supply of COVID-19 vaccines. The net balance of cash customer deposits increased from $2.8 billion at the end of December 2020 to $5.6 billion at the end of Q1 2021.

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Now turning to our cash and investment position on slide 22.

The cash and the investment balance reported as of March 31 was $8 2 billion up from $5 2 billion as of December 31 2020 the.

The increase was primarily driven by the net increase in customer deposits for future product supply of COVID-19 vaccine.

The net balance of cash customer deposits increased from $2 8 billion at the end of December 2020 to $5 6 billion at the end of Q1 'twenty one.

David Malina: Lastly, let me comment on tax-related items on slide 23. The significant investments in our research, development, and startup activities to develop the mRNA platform over the last decade have resulted in net operating loss carry forwards with a balance of $2.3 billion at the end of 2020. As of December 31, 2020, we maintained a full valuation allowance against our deferred tax assets related to these losses carry forward. We perform a valuation allowance assessment during each reporting period based on the latest available financial information and outlook.

Lastly, let me comment on tax related items on slide 23.

The significant investments in our research and development and the startup activities to develop them RNA platform over the last decade of result of the net operating loss carryforwards, which with the balance of $2 3 billion at the end of 2020.

As of December 31, 2020, we maintained the full valuation allowance against our deferred tax assets related to these loss carryforwards.

We perform a valuation allowance of assessment during each reporting period based on the latest available financial information on outlook.

David Malina: After considering the weight of available evidence, both positive and negative, we concluded that as of March 31, it is more likely than not that the company will be able to realize the substantial majority of its net deferred tax assets. This analysis included not only our strong first quarter results but also our April activity. The majority of the valuation allowance will flow through the P&L over the course of 2021 in our effective tax rate prorated based on the cadence of our expected pre-tax quarterly earnings.

Considering the weight of available evidence both positive and negative we concluded that as of March 31. It is more likely the not the company will be able to realize the substantial majority of the net deferred tax assets. This analysis included not only our strong first quarter result.

But also our April activity.

The majority of the valuation of allowance will flow through the P&L over the course of 2021 and of our effective tax rate.

Prorated based on the cadence of our expected pretax quarterly earnings.

David Malina: We also recorded two discrete benefits in our tax provision in Q1, which lowered our first quarter tax. The First Benefit Related to the Valuation Allowance Release, for the portion of deferred tax assets which we expect to utilize in future years. The second related to the excess tax benefits associated with stock-based compensation.

We also recorded two discrete benefits of our tax provision in Q1, which lowered our first quarter tax rate. The first benefit related to the valuation allowance release for the portion of deferred tax assets, which we expect to utilize the future years the.

The second related to the excess tax benefits associated with stock based compensation.

David Malina: Turning now to the 2021 updated financial framework on slide 24, signed advance purchase agreements for expected delivery in 2021 reflect a current full year total of $19.2 billion in anticipated product sales, including doses that have been delivered and recognized as revenue in Q1. 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 700 million to 800 million doses at the 100 microgram dose level.

Turning now to the 2021 updated financial framework on slide 24.

Signed the advance purchase agreements for expected delivery in 2021 reflect the current full year total of $19 $2 billion and anticipated product sales.

Including doses out of the deal.

Liberty and recognized as revenue in Q1.

Based on continuous progress to ramp up of available supply capacity on our network. We have raised the lower end of our global manufacturing plan for 2021 from 700 million to 800 million doses at the 100 microgram dose level are.

David Malina: Our manufacturing team and our partners are still working to supply up to 1 billion doses per year in 2021. Furthermore, we continue to expect a range of deliveries in Q2 2021 of 200 to 250 million doses. Our total cost of sales includes the cost of manufacturing, logistics, and warehousing, and third-party royalties. For 2021, we continue to model average 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 average selling price going forward.

Of our manufacturing team and our partners are still working to supply up to 1 billion doses per 2021.

Further we continue to expect the range of deliveries in Q2, 2021 of 200 to 250 million doses.

Our total cost of sales includes the cost of manufacturing logistics and warehousing and third party royalties for 2020. One we continue to model average total cost of sales as a percent of product sales to be approximately 20% for the full year with <unk>.

Some variation quarter by quarter, largely driven by average selling price going forward.

David Malina: Now let me comment on planned R&D and SG&A expenses. Q1 expenses of approximately $0.5 billion were stable compared to the underlying Q4 2020 expense run rate on a like-for-like basis. However, in Q1, our actual expenses were lower than the internal forecast, primarily driven by the timing of clinical development and commercial activities and related costs.

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

Q1 expenses of approximately <unk> 5 billion were stable compared to the underlying Q4 2020 expense run rate on a like for like basis in.

In Q1 of our actual expenses were lower than the internal forecast, primarily driven by the timing of clinical development and commercial activities and related costs.

David Malina: We now expect a notable expense trend increase starting in Q2 on a quarter over quarter basis for the remainder of this year, based on better visibility of the utilization of our accumulated net operating loss carryforward, Expected Global Sales, and the mentioned discrete benefits in Q1. We now expect our all-in 2021 tax rate to be in the low 20s. This compares to our previous forecast in the mid-teen range. This forecast is based on current U.S. tax policy in effect and does not include any future potential discrete benefits related to stock-based compensation.

Now expect of notable expense trend increase starting in Q2 on the quarter over quarter basis for the remainder of this year.

Based on better visibility of the the utilization number of accumulated net operating loss carryforward.

The expected global sales mix and the mentioned discrete benefits in Q1.

We now expect our OLED <unk> 2021 tax rate to be in the low teens.

This compares to our previous forecast in the mid teen range.

This forecast is based on current U S tax policy and the effect and does not include any future potential discrete benefits related to stock based compensation.

David Malina: We will update this view as our business evolves further. Finally, regarding capital investments, we're raising our forecast for capital investment from our previous range of $350 to $400 million for 2021 to $450 to $550 million, including the planned capacity expansion investments as announced on April 29. This concludes my remarks concerning financial performance, and I now turn the call over to Stephen. Thank you, David.

We will update this view as the business evolves further.

Finally regarding capital investments, we are raising our forecast for capital investment from our previous range of $350 million to $400 million for 2021 to $450 million to $550 million, including the planned capacity expansion investments as announced on.

April 29.

This concludes my remarks concerning financial performance and I'll now turn the call over to Stephen.

Thank you David.

Stephen: I'll begin with an overview of our COVID-19 strategy against variants of concern and the initial data from our Phase 2 booster vaccine study before ending with a summary of the rest of our pipeline. And before I go into the data, a reminder that our booster strategy is evaluating single-dose booster vaccinations with three different mRNA vaccines. 50 micrograms of mRNA-1273, 50 micrograms of mRNA-1273.351, both of which have data available today and which I will discuss in just a moment, and a multivalent booster vaccine candidate, which combines a 50-50 mix of mRNA-1273 and mRNA-1273.351 in a single vaccine.

Ill begin with an overview of our COVID-19 strategy against variance of concern and the initial data from our phase II booster vaccine study for ending with the summary of the rest of our pipeline.

Stephen: In addition, we're also evaluating a lower 20-microgram dose of mRNA-1273.351. Data from the multivalent booster and the 20 microgram booster of 3,5,1 will be shared when available. And with that backdrop, let's move to the data. Starting with safety, local and systemic adverse events within 7 days after a booster dose of either 1273 or 1273.351 were generally comparable to those observed after the second dose of 1273 in our previously reported Phase 2 study and our Phase 3 co-study.

The study and our phase III co study.

Stephen: The majority of the events were mild or moderate in severity, and Grade 3 events occurred with a frequency of approximately 15% in participants who received 1273 and approximately 10% in participants who received 1273.351. The most commonly reported solicited local events were injection site pain, and the most commonly reported systemic events were fatigue, headache, myalgia, and alterelgia. There were no grade 4 events reported.

The majority of the events were mild or moderate and severity in grade three events akubra of the frequency of approximately 15% and participants who received 12 73 and approximately 10% and participants who received 12 70 3351 the <unk>.

Most commonly reported solicited local events, where injection site pain and the most commonly reported systemic events, where fatigue headache, myalgic and arthralgia there were no great for repent of events reported.

Stephen: On the next slide are figures from two papers. The figures on the left hand side were published in the New England Journal of Medicine and show the difference in neutralization of SARS-CoV-2 pseudoviruses in serum samples one week after vaccination with a primary series of mRNA-1273. Recall that there was a six-fold decrease in neutralization titers against the B.1.351 variant, the variant first identified in the Republic of South Africa, and a three-fold drop in titers against P.1, the variant first described in Brazil.

On the next slide our figures from two papers.

The finger on the left hand side were published in the New England Journal of Medicine and show the difference in Neutralisation of Sars Kobe to pseudo viruses and serum samples one week after vaccination with the primary series of mrna 12 73.

Recall that there was a six fold decrease in neutralization titers against the B 1351 variant where the variant first identified in the Republic, South Africa and of three full drop and titers against Pete on one the very first described in Brazil.

Stephen: Again, as a reminder, these neutralizing titer levels were from serum samples one week after the second dose of the primary vaccine series of mRNA-1273. So, essentially, these titers are close to peak levels. On the right-hand side of the slide is a figure from the preprint manuscript of our initial results from our Phase 2 study posted yesterday to BioRx. The figures show the neutralization titer levels of the participants in our Phase 2 booster study immediately before their booster vaccination.

And again as a reminder, these neutralizing titer levels were from serum samples one week. After the second dose of the primary vaccine series of the morning 12, 73. So essentially these titers are close to peak levels.

On the right hand side of the slide is the figure from the preprint manuscript of our initial results from our phase two study posted yesterday to buy archive the.

The figures show the neutralization tighter levels of the participants in our phase two booster study immediately before their booster vaccinations.

Stephen: Reminder that these individuals were previously vaccinated with a primary series of mRNA-1273 in either our Phase II or Phase III studies roughly six to eight months prior to enrolling in this booster study. At this time point, titers against wild-type SARS-CoV-2 remained high, with almost all participants having detectable titers. But titers against B.1.351 and P.1, the variants of concern, were much lower.

A reminder of the these individuals were previously vaccinated vaccinated with a primary series of mrna 12 73 in either of our phase two or phase III studies, roughly six to eight months prior to enrolling in this booster study.

At the at this time point titers against Wild types of ours Kobe to remain high with almost all participants having detectable titers.

The Tigers against B 1351, and P. One the variance of concern we're much lower in fact, approximately half of participants had titers below the assays limit of quantitation at this time.

Stephen: In fact, approximately half of participants had titers below the assay's limit of quantitation at this time, so it is clear that waning of titers is apparent, both with time, and that lower titers against variants of concern lead to more rapid loss of neutralizing activity. Turning to the next slide.

So it is clear that waning of tire titers is apparent both with time and the lower titers against variance of concern lead to more rapid loss of neutralizing activity.

Turning to the next slide.

Stephen: The data shows that two weeks after booster vaccinations of either mRNA-1273 or 1273.351, neutralizing titer levels increased against both the wild-type virus as well as the B.1.351 and P.1 variants of concern. In fact, following BOOST, geometric mean titers against the three variants tested increased to levels similar to or higher than previously reported peak titers against the ancestral strain following primary vaccination. When looking specifically We achieved levels of 1400 after booster vaccination with mRNA-1273.351 against the 351 variant.

The data shows the two weeks after booster vaccines of either mrna 12, 73, or 12, $73 351, neutralizing titer levels increased against both of the wild type virus as well as the B 1351 P. One variance of concern and.

In fact, following boost geometric mean titers against the three variance tested increase the levels similar to or higher than previously reported peak titers against the ancestral strain following primary of explanation.

Stephen: This compares with a GMT of 864 when boosting with mRNA-1273. Vaccination with mRNA-1273.351 was more effective at narrowing the gap in neutralizing titers between wild-type and B.1.351 viruses relative to boosting with mRNA-1273. And we're encouraged by this initial data, and we're excited to see additional data over time from these arms, as well as the data from the multivalent arm and the lower-dose arm of mRNA-1273.351. On the next slide, I would like to highlight one last comparison from the manuscript.

Stephen: On the left is a sample of participants from the Phase I study, and they're neutralizing titers against ancestral strains following a Primary Vaccination Series with mRNA-1273. GMT achieved in this assay is approximately 1,500. On the right-hand side is a reproduction of the data we just spoke through, looking at neutralizing titers, and I'm specifically highlighting the neutralizing titers against the B.1.351 variant of concern. A booster dose of 50 micrograms of mRNA-1273, the top bar, was able to increase titers to a level of 864 in this study.

64 in the study.

That compares with a booster dose of 50, Mike firms of 12, $73 351, which was able to get the titers against the variant of concern as high as 1400 in the study.

We will continue to closely watch this data and as I mentioned, a moment ago look forward to subsequent updates in time points.

Stephen: That compares with a booster dose of 50 micrograms of 1273.351, which was able to get to titers against the variant of concern as high as 1400 in this study. We'll continue to closely watch this data, and as I mentioned a moment ago, look forward to subsequent updates and time points. On slide 31 is a snapshot of our vaccine development candidates that are in or entering the clinic. I'll highlight a few.

On slide 31 is a snapshot of our vaccine development candidates that are in or entering the clinic. A highlight of few are CMV vaccine is on track to start a pivotal phase III study in 2021 are Zika vaccine is expected to begin of phase two study also in 2021.

R. H MPV PIV three respiratory combo vaccine is currently enrolling in toddlers and that our vaccines day last month, we announced positive interim phase one data from our RSV vaccine and more on a 13 45.

Stephen: Our CMV vaccine is on track to start a pivotal phase 3 study in 2021. Our Zika vaccine is expected to begin a phase 2 study also in 2020. Our HMPV-PIV3 respiratory combo vaccine is currently enrolling toddlers.

This continues in pediatric an older adult cohorts of that phase one study are still enrolling.

Finally within our flu vaccine program, we expect of Phase one study of mrna 10 10 to begin in 2021.

Stephen: And at our Vaccines Day last month, we announced positive interim Phase 1 data from our RSV vaccine, mRNA1345. This continues, and pediatric and older adult cohorts of that Phase 1 study are still enrolling. Finally, within our flu vaccine program, we expect a phase one study of mRNA 1010 to begin in 2021. Outside of vaccines, we have seven clinical proof-of-concept trials ongoing across four modalities. Our VEGF program, partnered with AstraZeneca, is enrolling in a Phase 2.

Outside of the vaccines, we have seven clinical proof of concept of trials ongoing across for modality.

<unk> program partner with Astrazeneca is enrolling in the face too on.

Personalized cancer vaccine program partnered with Mark is also enrolling in the phase two trial.

And K Ross Ah the second.

Program partnered with Mark is ongoing and of Phase one study.

With an inter terminal immuno oncology, our phase two dose expansion knocks 40 log in phase one triplet in phase one eye on to study, which has partnered with Astrazeneca are all still ongoing.

Finally, as defined mentioned, we're pleased to have started dosing in the Paramount study improperly on aghast anemia.

Stephen: Our personalized cancer vaccine program, partnered with Merck, is also enrolling in a Phase II trial, and K-RAS, our second program partner with Merck, is ongoing in a Phase I study. Within intratumoral immuno-oncology, our Phase II dose expansion of OX40 ligand, Phase I triplet, and Phase I IL-2 study, which is partnered with AstraZeneca, are all still ongoing. Finally, as Stephane mentioned, we are pleased to have started dosing in the Paramount study in propionic acidemia.

On Slide 33, you can see our full development pipeline. In addition to a large portfolio of infectious disease vaccines. We now have seven therapeutic programs in the clinic.

I will now turn the call over the phone to think of something.

Thank you Stephen going and Davis.

Oh, the 20th of Edmonds per shift that government sign of not being increased to $19 to be done the wrong.

As we can give you put it on you tube, we're investing to be distributed on those supplied capacity because we believe the market need could be great for the 22 venue 2021.

First we already have countries, sending <unk> for the for the tool for additional price theories of children, but first of all of our specific boost sales.

Stephen: On slide 33, you can see our full development pipeline. In addition to our large portfolio of infectious disease vaccines, we now have seven therapeutic programs in the country. I'll now turn the call over to Stphane to take questions. Thank you, Stephen, Corinne, and David.

Israeli last week and Switzerland. This morning.

If you recall the rest of the first countries from some <unk> in 2020 and again. These countries hour ahead of the game four of 2022 and reliability free.

Second word of Kovacs partnership announced on Monday, and we anticipate the supply of two 466 million, though these 2022.

Stphane Bancel: Our 2021 Advance Purchase Agreement signs have now been increased to $19.2 billion. As we look into 2022, we're investing to build 3 billion dollars of supply capacity because we believe the market need could be greater in 2022 than in 2021. First, we already have countries signing APAs for 2022 for additional prime series for children, but also for variant-specific boosters. Israel last week, and Switzerland this morning.

So we're having activity discussions with all of the governments of signed 20, plus the one <unk>.

Madonna for new EPS, plus what the places deliveries again from series, but also boost dose.

Where I think the new mirrors discussions with government that the note of 20 of us the when they appeared with Madonna because we cannot supply them into any of the two one okay.

Stphane Bancel: If you recall, they were some of the first countries to sign APAs in 2020. And again, these countries are ahead of the game for 2022 and 2023. With the COVAX Partnership Announcement Day, we anticipate to supply up to 466 million doses in 2020. Third, we are having active discussions with all the governments that have signed 2021 APAs with Moderna about new APS for 2022 deliveries, again, Prime series, but also booster

But many of these governments are already of invest went through 2022 AP because they want the highest <unk> on the of acceded that the easy too so.

This is why we decided to invest for most supply in 2022, we believe from the current news and current discussions that the market once more supply from us in Cleveland to do that we can supply in 2021.

As we look at the next stuck with the new we of the most of the of a few vaccine fact blending the industry.

And we're investing volume research to increase the impact by bringing to the clinic mowing of us the vaccines again, the viruses that sort of humans.

Stphane Bancel: We are having numerous discussions with governments that do not have 2021 APAs with Moderna because we cannot supply them in 2021, fortunately. But many of these governments are already asking us to enter into 2022 APAs because they want high-efficacy mRNA vaccines that are easy to store. This is why we decided to invest in more supply in 2022. We believe from our current deals and current discussions that the market wants more supply from us in 2022 than we can supply in 2020.

We are nine of Phoenix prefer up the karaoke oncology customer of <unk> and whether it is and soon we should be in the clinic in the auto immune disease as well.

We're also new Inc to innovate and the investing science like for example for the living among the Indalone, we will pop noetics.

As we continue to program with the us with skin and the 10 times more impact we're investing Edward civilly.

We are accelerating going dismissing digital automation and the.

From of spend of 27 million that are in 2019, we invested around 60 million the law in 2020 in digital.

We are planning to the most triple that's one of them that $70 million in 2021 way.

We're investing of across the board the 92 issue of high quality to accelerate the fifth of learning and to ensure we can transform clinical operations.

Stphane Bancel: As we look at the next 5-10 years, we have the most innovative vaccine pipeline in the industry, and we're investing more in research to increase our impact by bringing more innovative vaccines against viruses that hurt humans to the clinic. We are now in the clinic in three therapeutic areas, oncology, cardiology, and rare diseases, and soon we should be in the clinic for autoimmune disease as well.

We're investing in digital twinge of high quality high scalability for manufacturing.

Stphane Bancel: We are continuing to innovate and invest in science, like, for example, delivering mRNA in the lung with our partner Virtex. As we continue to prepare Moderna to scale and have 10 times more impact, we are investing aggressively. We are accelerating our investment in digital automation and AI. From a spend of $27 million in 2019, we invested around $60 million in 2020 in digital.

Stphane Bancel: We are planning to almost triple that $170 million in 2021. We're investing across the board in R&D to ensure high quality, to accelerate the pace of learning, and to ensure we can transform clinical operations. We're investing in digital to ensure high quality and high scalability for manufacturing. And we are building commercial so that we can commercialize our pipeline in a highly efficient and effective manner.

Stphane Bancel: We want to change the big pharma paradigm of a large, inefficient, and expensive sales force and the advertising spend to promote me-too drugs. Our pipeline is 13 class medicine that patients and doctors are waiting for. We want to enable our corporate functions, HR, legal, finance, and so on, to scale without creating large corporate organizations.

It's the core industry.

As part of the is getting model on that very software, but also very the all the way.

Many of you were at the opening of our Norwood manufacturing site in July 2018, or you came to visit the FW opening of.

Stphane Bancel: I'm also excited that we are launching an AR academy. Today, we have some exciting pockets of excellence in AI across the company, but AI is not yet part of our DNA. The reason is simple.

Our building is around 200000 square feet with call it more than that Technology Center South volume this yourself.

In 2020, we added the building next week and other the around 245000 square feet and call. It the Mtc now.

Stphane Bancel: Most companies don't do AI. So as we grow and hire new talent, they are great skilled in their art.

We were pleased to announce this week that we now have access to the new building Mtc East, which will start welcoming Madonna employees. Later this year. After some of your investments and renovations that were building that isn't the votes 140000 square feet.

Stphane Bancel: But few have been exposed to AI in their previous companies. We want AI to be how we run the world. In science, in clinical development, in manufacturing, in quality, in commerce, in HR, in finance, everywhere.

So we know having the MCC access to around 650000 square feet.

We know of what we're building on this campus and we can also add more buildings and build them now that we are of the entire campus.

Stphane Bancel: It is the same change management revolution as 20 to 30 years ago when personal computers entered the workforce. We want every team at Moderna to understand and use AI in everything we do. AI will become part of our DNA. As many of you know, we have built integrated digital systems that are connected to each other. And as we have more systems, we get more data. As we get more data, we learn faster, and we keep building and creating a network cycle.

We are deeply committed about building the company that has a strong sense of responsibility.

We want some of that will be a positive force in the world of <unk>.

The promising vessel by who we are as the company.

We are very committed to belong inclusion and diversity.

We recently published or extended the workforce diversity figures for the first time.

Last year, we send the CEO action for diversity and inclusion pledge.

And we have also reiterated our ongoing commitment to increasing diversity of clinical trials.

We are deeply committed to the environment.

We have decided to social no the cambria shape with renewable energy and would offset any energy that these notes from renewable sources and.

Stphane Bancel: Between our strong balance sheet, our mRNA platform, our team, our culture, and our digital infrastructure, I believe our ability to scale Moderna is unique in the biopharmaceutical industry. As part of scaling Moderna, there is software, but there is also hardware. Many of you were at the opening of our Norwood manufacturing site in July 2018, or you came to visit after the opening. Our building is around 200,000 square feet. ft. We call it Moderna Technology Center South or MTC South.

And we will be working on the target as to when we should be the net zero carbon company.

We're also encouraging on price with a put the key impact on the communities in which we live and volunteer from cleaning of the Charles River in Cambridge to feeding voluminous and stem education and much more.

You can find out of other resources online on our website.

As that growth I'll also COVID-19, how thankful we are at the modern us were of a chance to do what we do.

Every day will come to work to making the rescue medicine using the first information platform of of biopharmaceutical industry.

My colleagues and I work and collaborate to make a moment of scenes toward of protect Oxford the people.

Stphane Bancel: In 2020, we added the building next to it and added around 225,000 square feet and called it MDC North. We are pleased to announce this week that we now have access to a new building, MTC East, which will start welcoming Moderna employees later this year after some investments and renovations to the building. That is another 240,000 square feet.

I am proud of what the team has done over the last 10 years to get us to the stage over the last 14 months since we started chasing susko be to balance in the Q1 as we continued to execute relentlessly.

But as I look at the future of model now I believe we have a chance over the next 510 20 years to transform medicines potentially like no other company as of a change of medicine.

This is just the beginning.

Before taking your questions I would like to remind you that we will be hosting our annual science day in the few weeks on may 27th Youre going to want to connect with the CFM of Stephen and his team of some very cool new things to share with you.

Stphane Bancel: So we now have access to around 650,000 square feet. We now have half a building on this campus. And we can also add more buildings and build them now that we are in the Antarctic.

And later on at the end of the summer on September 9th or on your R&D day for holistic clinical update operator, we'd be happy to take the any question on that.

Stphane Bancel: We are deeply committed to building a company that has a strong sense of responsibility. We want Moderna to be a positive force in the world, not only through our medicines but also by who we are as a nation. We are very committed to belonging, inclusion, and diversity. We recently published or expanded the Workforce Diversity Figures for the first time.

Thank you ladies and gentlemen, if you have a question at the time.

Please press Star then the number one on your Touchtone telephone.

Your question has been answered and you wish to remove yourself from the queue. Please press the pound key.

Stphane Bancel: Last year we signed the CEO Action for Diversity and Inclusion Pledge, and we have also reiterated our ongoing commitment to increasing diversity in our clinical trials. We are deeply committed to the environment. We have decided to source our Norwood and Cambridge sites with renewable energy and will offset any energy that is not from renewable sources, and we will be working on a target as to when we should be a net zero carbon company. We are also encouraging our employees to have a positive impact on the communities in which we live and volunteer. From cleaning the Charles River in Cambridge to feeding the homeless, STEM education, and much more.

Your first response is from the line of Saudi Lichter with Goldman Sachs. Please go ahead.

Good morning, Thanks for taking my questions I have a couple here.

So firstly with regard to Inc.

The U S supports the WTO for a couple of bank.

The <unk> vaccine.

What's the point.

From the Donna if you could just walk us through that.

Secondly, if you could just discuss contract dynamics of the vaccine in 2022 as you look to address the variance in kind of D. C. The move towards in the endemic market and third.

It's nice to see the PAA program move for the be great Jack kind of understand whether we'll see data from that program. This year and what else we might see from the ex COVID-19 pipeline. Thank you.

Stphane Bancel: You can find a lot of resources online on our website. As I close, I want to convey how thankful we are at Moderna to have a chance to do what we do. Every day, we come to work to make innovative medicine using the first information platform of the biopharmaceutical industry. My colleagues and I work together and collaborate to make more medicines to help protect or treat people. I am proud of what the team has done over the last 10 years to get us to this stage, over the last 14 months since we started chasing the SARS-CoV-2 virus, and in Q1 as we continue to execute relentlessly.

Seven good morning, Stefan Let me start we were first questions and then on the <unk> Stephen.

So on the IP and kind of what does it mean I believe it doesn't change anything from Madonna.

As I said you know, we I'd say the last October that will nursing force.

COVID-19 related patents during the pandemic.

And as I said in my remarks.

There is no M&A in the manufacturing capacity in the world because of new technology.

Stphane Bancel: But as I look at the future of Moderna, I believe we have a chance over the next 5, 10, 20 years to transform medicines potentially like no other company has ever changed medicine. This is just the beginning. Before taking your questions, I would like to remind you that we will be hosting our annual Science Day in a few weeks on May 27.

You cannot go hire people, who know how to make them on it.

Those people don't exist.

And and then even if all of those things where available.

We want to do them on the vaccines will have to buy.

By the machine invent the manufacturing process.

The investor education of processes and ethical processes and then they would have to go run the clinical trial get the data get the product approved and scale of manufacturing. This doesn't happen in six or 12 or 18 months, we have been working at this for yield and as you know we have some smaller im on the companies at the attitude in the clinic trying to.

Stphane Bancel: You are going to want to connect to this event, as Stephen and his team have some very cool new things to share with you, and later at the end of the summer, on September 9th, our annual R&D day for a holistic clinical update. Operator will be happy to take any questions. Thank you. Ladies and gentlemen, if you have a question at this time, please press star, then the number one on your touchtone telephone. If your question has been answered and you wish to remove yourself from the queue, please press the pound key.

Get the products to the finish line.

And so.

We saw the news last night and idea of minutes, obviously per revenue stream Tonight on 2022 contracts with the.

The only because as I just described leads which is the market thats tremendous skewed changed.

Salveen Richter: Your first response is from the line of Salveen Richter with Goldman Sachs. Please go ahead. Good morning. Thanks for taking my questions. I have a couple here.

Since the pandemic started last year before clinical data.

Many countries as noted on the want to move.

Salveen Richter: So firstly, with regard to, you know, if the US supports the WTO waiver of COVID-19 vaccine IP, what does that mean for Moderna? I mean, if you could just walk us through that. Secondly, if you could just discuss contract dynamics for the vaccine in 2022, as you look to address variants and kind of see the move towards an endemic market. And third, you know, it's nice to see the PA program move forward. It would be great to kind of understand whether we'll see data from that program this year and what else we might see from the ex-COVID pipeline. Thank you. Salveen, good morning, Stphane.

Because of and monitoring of new technology as the move first on the protein contracts on adding those contracts.

And then the kind of the monarch contract stimulator.

The just in case.

And then the clinical data that came along and the speed to get to approval.

And so and then you had the effect of the protein industrial not authorized anywhere in the West and then you at the.

The low efficacy of yet the nose and over the safety questions are on the manufacturing scale up issues that are the most companies have had.

And the Big question the scientists of as I can go on the Manhattan can you actually really boost at the analyst with either of those products because by definition you give again the same virus Vic talk to.

Somebody that we believe over time will get less and less response from it.

Stphane Bancel: Let me start with your first questions and then I'll turn the PA question to Stephen. So on the IP, in terms of what it means, I believe it doesn't change anything from Moderna. As I said, you know, we said last October that we would not enforce our COVID-19-related patents during the pandemic. And as I said in my remarks, there is no mRNA in manufacturing capacity in the world; this is a new technology. You cannot hire people who know how to make mRNA. Those people don't exist.

So as you look at the marketplace, which what governments are doing again, given the menu of government I think last several of the pandemic will be gone quickly trust.

Trust Me every day.

On that we're talking to believe this is going to stay for a long time.

They have got massively educated about the scientists on the clinician.

And they believe this virus is not going away. They believe boosting is going to be critical day believe direct specific boosting isn't of the visa right with the the science and as you saw from Steve of the presentation you see what the clinical data are showing as well.

And so over that Amit is that current governments that are already contracted with us.

Stphane Bancel: And even if all those things were available, whoever wants to do mRNA vaccines will have to, you know, buy the machine, invent the manufacturing process, invent purification processes, and analytical processes, and then they will have to go run a clinical trial, get the data, get the product approved, and scale manufacturing. This doesn't happen in 6 or 12 or 18 months. We have been working on this for years, and as you know, there are some small mRNA companies that are still in the clinic trying to get the products to the finish line. And so, you know, we watched the news last night, and I didn't lose a minute of sleep over the news during the night.

<unk> from law and we are in active discussion with all of them to supply multiple 2224 of them.

Both price series and specific driving the booster the beauty of all the technologies. We can agree right now in the contracts to give them next tier of the rebate to choose what they want based on the clinical data and has an incredible copies of the Atlanta agent. This we can do because as you know the manufacturing processes. The same password of 73 of <unk> 70 River.

<unk> on a percentage of it.

On your Swiss entity, we built something you've as of new volume.

And we can share that's on the very short notice of because it's the same equipment in the same room with the same people with some raw materials.

And then you hold those go out months, which is almost.

Most of my exciting to me that never called before.

Stphane Bancel: You know, since the pandemic started last year, before clinical data, many countries, as you know, didn't want to move, especially because of mRNA being a new technology. They moved first on protein contracts, on adenosine contracts. And then the kind of mRNA contracts came later, more as a, you know, just in case. And then the clinical data came along, and the lower efficacy of the adenos, you know, the safety questions around the adenos, and manufacturing scale-up issues that adenos companies have had.

That's the call before the tweak with on supply of that Bill.

Because we were.

We are in the of fortunate position Stephen we look we're very sorry, we have enough of supply for you in 2021, which of course of very difficult discussion to have given the suffering of pruning around the world.

But the great news with the investments we've announced to get up to February of next year. We now can have those discussion on with those governments and Colgate and the key modeling a lot of discussions with them. So thats kind of give you a sense of.

The dynamic Stephen on Pan.

Sure <unk>. Thanks for the question so as you.

The program the Paramount study for appropriate Artic epidemiology is going to be looking at Biomarkers as a part of it is dose optimization and so it's possible that we'll be seeing very early indicators of impact there, but we are going to there is no guarantee that the first dose level on the first cohort that we're looking at will be the correct.

Stphane Bancel: And the big question that scientists advising governments have, which is, can you actually really boost adenosis with more adenosis products? Because by definition, you give, again, the same virus vector to somebody that we believe, over time, will get less and less response from it. So as you look at the marketplace, which what governments are doing, and given, you know, many governments, I think last year, I believe the pandemic will be gone quickly. Trust me, every government we're talking to believes this is going to stay for a long time.

And we're going to make sure that we develop of cogent and consistent data set before we bring that forward.

It is the dose optimization study and we will perhaps be looking at multiple dose levels. So while I think it's possible that we would see data this year.

Dependent on on many things that are well beyond our control.

Now you asked the more general question also about our broader portfolio.

And if you look at the programs, where generally the Jeff as we mentioned as of Phase II program, that's been enrolling for a while it's possible we could see data from that.

Stphane Bancel: They have been massively educated by scientists and clinicians, and they believe this virus is not going away. They believe boosting is going to be critical. They believe variant-specific boosting is going to be the right way to do the science. And as you saw from Stephen's presentation, this is what the clinical data are showing as well. And so the dynamic is that current governments that have already contracted with us are calling for more.

Our PCV and K Ras programs again as open label programs will continue to track those closely as the enroll and then similarly, the intra tumoral programs that we highlighted many of them are ongoing and producing data and of course, when we have a complete and cogent dataset, we will bring them forward.

On the consulting.

Thank you. Your next response is from Matthew Harrison with Morgan Stanley. Please go ahead.

Stphane Bancel: And we're in active discussion with all of them to supply more for 2022 and 2023, both prime series and specific variant boosters. The beauty about the technology is we can agree right now on a contract to give them next year the ability to choose what they want based on clinical data. And that's an incredible competitive advantage.

Great. Good morning, Thanks for taking the questions I guess I guess two from me one on the.

On the sort of next generation COVID-19 vaccine, where you think it might be a.

Frigerator stable can you just talk about the regulatory path for that vaccine given that it's not the full spike and do you think you might have to run on actual efficacy study or do you think.

Stphane Bancel: And we can share that on a very short notice because it's the same equipment in the same room with the same people and the same raw materials. And then you have all those governments, which is almost more exciting to me, that have never called before, or that they have called before, but we couldn't supply them. Because we were in the unfortunate position to say, look, we're very sorry, we have no more supply for you in 2021, which is, of course, a very difficult discussion to have given the suffering happening around the world.

Neutralization tighter study.

With the safety might be enough for that and then.

The second question Stephen if I can just follow up on on PPA I know in the past right. One of the struggles has been enrolment obviously, it's great to see that you've got a patient into the study can you just talk about.

Now that you've gotten a patient and what your sort of view is around enrollment and if you think you've gotten through some of those hurdles.

Stphane Bancel: But the great news is that with the investments we've announced to get up to $3 billion next year, we can now have those discussions with those governments, and Corrine and Oskim are having a lot of discussions with them. So that kind of gives you a sense of the dynamic. Stephen, on PM?

Sure. Thank you Matthew from both questions.

So so first on I believe you were referencing or our second generation vaccine candidate, which is mrna 12 83. It is a shorter construct that we think could have a much longer refrigerated stability profile.

As we announced previously we started enrolling in the phase one in that study and it's probably a little bit premature to comment on what we think the regulatory path will look like for that until we get some of that additional data and have conversations obviously with regulators, but I would highlight that it's possible the $12 83.

Stephen: Sure, Salveen, thanks for the question. So, as you know, the program, the Paramount Study for Proprionic Acidemia, is going to be looking at biomarkers as a part of its dose optimization. And so it's possible that we'll be seeing very early indicators of impact there. But we are going to, There's no guarantee that the first dose level and the first cohort that we're looking at will be the correct ones. And we're going to make sure that we develop a cogent and consistent data set before we bring that forward.

May not go into a full primary series of explanation study it could impact in the future function has the booster, but again that's.

Probably.

Too early to say, we will have to wait until we see that data and ultimately it will be dependent upon conversations with regulators in the future.

As it relates to <unk> enrollment, yes, as you mentioned, we've been working very hard on that.

Stephen: It is a dose optimization study, and we will perhaps be looking at multiple dose levels. So while I think it's possible that we will see data this year, it's dependent upon many things that are well beyond our control. Now, you asked a more general question about our broader portfolio. And if you look at the programs more generally, VEGF, as we mentioned, is a Phase II program that's been enrolling for a while.

Over the coming over the past years, and we're quite pleased to have enrolled the first participant in the first patient in that study and the team's working hard to enroll additional patients as quickly as possible I think time will tell whether we've actually broken through here in <unk>.

Addressed any of the issues that we previously had in terms of enrollment.

And so hopefully we'll be able to provide subsequent updates on the expanding enrollment in the near term that will demonstrate that we've made that progress.

Stephen: It's possible we could see data from that. Our PCV and KRES programs, again, as open-label programs, we'll continue to track those closely as they enroll. And then, similarly, the intratumoral programs that we highlighted, many of them are ongoing and producing data. And, of course, when we have a complete and cogent data set, we will bring it forward. Thank you. Your next response is from Matthew Harrison with Morgan Stanley.

Thank you. Your next response is from <unk> Kim from <unk> with Piper Sandler. Please go ahead great.

Great. Thank you very much and thank you for all of the detailed updates.

Including running through the financial and.

So detail David.

Congrats on all the success of Stephen I wanted to pick up on the.

The booster data that you've shown the maybe take.

Matthew Harrison: Great. Good morning. Thanks for taking the questions. I guess two for me. One on the sort of next generation COVID vaccine where do you think it is?

<unk> is the step toward what is the booster strategy going to look like.

We actually need to maybe do.

Matthew Harrison: ePB, EF-R, Refrigerator Stable. Can you just talk about the regulatory path for that vaccine, given that it's not the full spike? Do you think you might have to run an actual efficacy study or do you think a neutralization titer study with safety might be—

Re dose will relax meet sooner than 8% to six months because of where the levels were and maybe you can just tell us what you see as sort of the potential timing.

For one we won't be giving boosters.

Matthew Harrison: might be enough for that. And then the second question, Stephen, if I can just follow up on PPA. I know in the past, right? One of the struggles has been

Thank you for the question Ted.

Look I think we have the start by saying we don't know we do not have data on when to expect waning immunity, leading to breakthrough infections, but we do know that there is a raging pandemic that reinfection is will happen at some point and the best way to ensure that we do not have renewed outbreaks and well vaccinated countries is to boost in.

Matthew Harrison: One of the struggles has been enrollment. Obviously, it's great to see that you've gotten a patient into the study. Can you just talk about, you know, now that you've gotten a patient in, what your sort of view is around enrollment, and if you think you've gotten through some of those hurdles? Sure. Thank you, Matt, for both questions.

<unk> maintained the highest possible levels of of neutralizing immunity, we as the Madonna also believes that that means we want to maintain the broadest neutralizing immunity against the largest number of then circulating variance of concern.

If you look at the data that we have posted today as well as some of our published data and others reports. It does feel like immunity to of primary vaccination series or previous infection seems to wane over the six to 12 month time horizon at least as measured by neutralizing titers again, we don't know.

Stephen: So, first of all, I believe you were referencing our second generation.

Stephen: One, I believe you were referencing our second generation vaccine candidate, which is mRNA-1283. It is a shorter construct that we think could have a much longer refrigerant stability profile.

Stephen: As we announced previously, we've started enrolling in phase one of that study, and it's probably a little bit premature to comment on what we think the regulatory path will look like for that until we get some of that initial data and have conversations, obviously, with regulators. But I would highlight that it's possible that 1283 may not go into a full primary series vaccination study. It could, in fact, in the future, function as a booster. But again, that's probably too early to say.

Whether that's the clinical correlate or not but it certainly is an indication of of that waning immunity and if you look at the data that we that I presented earlier approximately half of the participants in our booster studies.

No longer have detectable neutralizing immunity against the variance of concern they have neutralizing immunity against the ancestral strain that theyre of accident against sort.

The logical thing we think to do is to boost their immunity against those variance of concern. If you will vaccinate them against those to both increase those titers right now, but also give them a longer duration of protection, perhaps long enough that we can see our way through the pandemic.

That probably looks like boosting on on.

Stephen: We would have to wait until we see that data, and ultimately, it would be dependent upon conversations with regulators in the future. As relates to PA enrollment, yes, as you mentioned, we've been working very hard on that over the past years. We're quite pleased to have enrolled the first participant, the first patient, in that study. And the team's working hard to enroll additional patients as quickly as possible. I think time will tell whether we've actually broken through here and addressed any of the issues that we previously had in terms of enrollment.

Nine to 12 months. After primary series is an annual booster for now.

At least while we're continuing to see the evolution of the virus now the last point was about our strategy more generally here and we do believe that the virus is not going to follow one path of evolution that we're going to see many variance of concern that there may be divergent paths and therefore, the best way to ensure.

Sure that we can protect against the broadest number of areas of concern will be a multivalent vaccine right now we're still waiting to see our multivalent vaccine data, which is a combination as you know of ancestral and 351 of the strength first identified in South Africa, but we think this is just the beginning and we think we're going to be unfortunately, continuing to fight this.

Stephen: And so hopefully, we'll be able to provide subsequent updates on expanding enrollment in the near term that will demonstrate that we've made that progress. Thank you. Your next response is from Ted Tenthross with Piper Sandler. Please go ahead.

Pandemic through 2022 at least globally.

And therefore, we're committed as a company to make as many updates to the vaccine to add as many variance as we think are necessary to ensure that when people receive a booster. It provides the broadest immune protection in principle, the widest range of the variance.

Edward Andrew Tenthoff: Great, thank you very much. And thank you for all of the detailed updates, including running through the financial analysis. So very detailed, David.

Incredibly helpful. Thank you guys for all of the work you're doing.

Thank you.

Thank you. Your next response is from Michael Yee with Jefferies. Please go ahead.

Edward Andrew Tenthoff: Congratulations on all the success. Stephen, I wanted to pick up on the booster data that you've shown, and maybe you can kind of take us a step forward. What is the booster strategy going to look like? You know, do we actually need to maybe do redose or revaccinate sooner than eight to six months because of where the levels were?

Hi, Thank you good morning, I appreciate I appreciate the questions I had two important follow ups one was going back to the question about the WTO can you just offer some color around the.

The view of Ross of raw material supply capacity et cetera in other words shedding some light on any ability to actually.

Edward Andrew Tenthoff: And maybe you can just tell us what you see as sort of the potential timing. Thank you for when we will be getting boosted. Thank you for the question, Ted. Look, I think we have to start by saying we don't know.

Increased global capacity, even if there were some form of open patents. So maybe just talk about that because I don't think that you can just make it.

Stephen: We do not have data on when to expect waning immunity leading to breakthrough infections, but we do know that there is a raging pandemic, and reinfections will happen at some point. And the best way to ensure that we do not have renewed outbreaks in well-vaccinated countries is to boost and maintain the highest possible levels of neutralizing immunity. We at Moderna also believe that that means we want to maintain the broadest neutralizing immunity against the largest number of currently circulating variants of concern.

Can you maybe just offer some color there and the second question is also a follow up on the variant strategy. It sounds like the bivalent strategy might be the best Stephen Chau at what point would you just pull the trigger on beginning of the manufacturer that pan ramp that all up for 2022. Thank you.

Stephen: If you look at the data that we have posted today, as well as some of our published data and others' reports, it does feel like immunity to a primary vaccination series or a previous infection seems to weigh in over the 12-month time horizon, at least as measured by neutralizing... Again, we don't know whether that's a clinical correlate or not, but it certainly is an indication of that waning immunity. And if you look at the data that I presented earlier, approximately half of the participants in our booster studies no longer have detectable neutralizing immunity against the variants of concern. They have neutralizing immunity against the ancestral strain that they were vaccinated against.

Thanks, Mike from Stefan let me start on the raw material.

The CIP.

Going back to what I say.

If somebody was tough from scratch because again there is no on the player.

We have idle capacity out there.

One we're not stopped by focusing on.

The large raw material the supply having why would of course to figure out how do you make the money.

And you cannot find out of patents, which as you all know on the leads on this on the U S.

Therefore on this website.

So one would have to figure out what the machines.

How do you make them on air.

Stephen: So the logical thing we think to do is to boost their immunity against those variants of concern, if you will, vaccinate them against those to both increase those titers right now but also give them a longer duration of protection, perhaps long enough so that we can see our way through the pandemic. That probably looks like boosting on nine to twelve months after primary series as an annual booster for now, at least while we're continuing to see the evolution of the virus.

Stephen: Now, the last point was about our strategy more generally here. And we do believe that the virus is not going to follow one path of evolution, that we are going to see many variants of concern, and that there may be divergent paths. And therefore, the best way to ensure that we can protect against the broadest number of variants of concern will be a multivalent vaccine. Now, right now, we're still waiting to see our multivalent vaccine data, which is a combination, as you know, of ancestral and 351, or the strain first identified in South Africa.

Stephen: But we think this is just the beginning. And we think we're going to be unfortunately continuing to fight this pandemic through 2022, at least globally. And therefore, we're committed as a company to make as many updates to the vaccine to add as many variants as we think are necessary to ensure that when people receive a booster, it provides the broadest immune protection against the widest range of variants.

And so of that platform capability, we are already in the process of building in establishing to support multiple updates to of multi valent vaccine.

And we do think that's going to be required because we think the virus is not going to stand still on stop evolving and we suspect there is going to be trivalent, maybe quadrivalent it will keep happening.

And the time of have we have completed GMP manufacturing of all of those patches in worse, it's sufficient scale, we think to be able to quickly move into commercial scale distribution if needed but at this point, we are still waiting for data to come shortly the confirm that performance of the clinic.

Edward Andrew Tenthoff: Incredibly helpful. Thank you guys for all the work you're doing. Thank you. Thank you. Your next response is from Michael Yee with Jeffreys. Please go ahead. Hi, thank you. Good morning.

Just the point selections.

The only what's your balance, which I think the level of Newport of built of four shape.

Michael Yee: I appreciate the questions. I had two important follow-ups. I was going back to the question about the WTO. Can you just offer some color around the view of raw material supply, capacity, etc.? In other words, shedding some light on any ability to actually increase global capacity, even if there were some form of open patent. So maybe just talk about that, because I don't think that you can just make it. I don't think it's that easy. Can you maybe just offer some color there? And The second question is also a follow-up.

Is it is not easy to do of material among at G M of new products.

From and then if you call the QC set of points because both of them on it at the same site.

Mostly seem it out because you just kind of a few of them in a few.

Nucleocapsid.

And that's the X Tech note.

And he's one of the platform comes true up so much value as you will know we of of CMV vaccine on the switch will face free where we need blocked and that's we fight of of of yields.

Very complex products six am on it in the.

The 75, and so if you think about what the <unk> balance vaccine for copies in the real quick it's something that would be easy on so for people that the one of them and the tivo.

L. As in Jeopardy, 15, before Trust me very good let the holes because we've had the discussion regretted both of on CMU Oreo.

Bigger than what the C. A lot of unethical metaweb characterization of so the you can prove two of them. That's you know what the as in the file and as yet the gap and the the big differentiation of the modem.

Michael Yee: on the variant strategy. It sounds like the bivalent strategy might be the best, Stephen. So at what?

Thank you Mike got it thank you guys.

Michael Yee: Mast, Stephen Shope. At what point would you just pull the trigger on beginning to manufacture that and ramp that all up for 2022? Thank you. Thanks Michael, Stphane. I missed out on the raw material. VIP.

Thank you your next responses from Gina link of Barclays. Please go ahead.

Thank you for taking my questions. I also Q1 also related to the IP question, so when it differently.

Stphane Bancel: Going back to what I said, you know, if somebody was to start from scratch, because again, there is no M-Money player that's with idle capacity out there, one would not start by focusing on, you know, large-scale raw material supply. I mean, one will have to figure out how to make the money. And you cannot find that in our patents, which, as you all know, are on the Internet, on the U.S. patent of this website.

Stphane Bancel: And so one will have to figure out what machine you need, how you make the money, what purification method you need, what, you know, analytical methods you need. And once you figure out all those things, which, trust me, is going to take time, it is not easy.

Stphane Bancel: You know, us and our companies that are on the market with the mRNA vaccine have been working on it for decades. And even companies that have been working on it for 10 or 20 years are still in the clinic trying to figure out how to get to the finish line. And so I really believe that this is not the issue. I don't believe the IP topic is mostly politically driven; it is not. It might impact other technologies like adenosine and proteins, and this I could not comment on, but for mRNA, I really... This is the wrong question. Stephen, do you want to take the bar?

Stephen: Yeah, so thank you again, Michael, for the question.

Stephen: At this point, we're still waiting for the clinical data to confirm that, and we expect to have that shortly. As we've mentioned, we've previously dosed people with the mRNA-1273-211 variant. The preclinical data that we have published, or presented, does suggest that that is going to be the winning approach. And as I highlighted, or as highlighted by the monovalent clinical data we already have, there is a benefit to adding additional antigens, and potentially, therefore, a benefit to a multivalent approach. I think it's important to recognize that we view this as an ongoing struggle.

Stephen: And so your question about when we pull the trigger and move forward with bivalent manufacturing, you know, we're already on the path of doing that manufacturing. Not because we think that we're done with mRNA-1273.211, the current bivalent vaccine, but because we think we're going to go down the path of multivalent vaccines and continue needing to add things. And so that platform capability, we are already in the process of building and establishing to support multiple updates to a multivalent vaccine.

In this case.

And if you compare the titers that we've achieved even by day 15 between these two variance between the ancestral strain and the three of five one stream Oh, it's really only the three of five one strain that's getting to the same level that we saw against the industrial strength and that last comparison so to levels that are approximately similar amount now.

Stephen: And we do think that's going to be required, because we think the virus is not going to stand still and stop evolving. And we suspect there will be trivalent, maybe quadrivalent, it will keep evolving in the time ahead. We have completed GMP manufacturing of all of those batches, and we're at sufficient scale, we think, to be able to quickly move into commercial-scale distribution if needed. But at this point, we are still waiting for data to come in shortly to confirm that performance in the clinic.

Not to say that mrna $12 73 of the booster couldnt wouldn't provide a benefit and I think you're highlighting that Gina there is evidence in this data as well that we can substantially increase neutralizing titers generally across across the response with a booster dose of mrna 2073 are authorized vaccine at 50 micrograms.

Stephen: Yes. And if you just had a point to add to Steven on the multivalent, which I think a lot of people don't appreciate, is that it is not easy to do a multivalent mRNA GMP product from an analytical QC standpoint because those mRNAs have the same size. They look mostly similar because you just change a few, I mean, a few nucleic acids.

And that is encouraging that as good news because I think it would suggest that that is also a useful strategy, but if you had to choose between the two and you were primarily concerned about increasing immunity to a higher level. So that it can last longer particularly in patient populations of high risk of either waning immunity or incomplete immunity.

Stphane Bancel: And that takes time, you know, and that's where the platform comes to have so much value. As you all know, we have a CMV vaccine on its way to phase three, where we have developed, and as we have found over the years, a very complex product, six mRNAs in the same vial. And so if you think about what the multi-valence vaccine for COVID is going to look like, it's not going to be easy.

We think this starts to provide very early of an even at day 15, even after of priming dose that.

There's going to be an advantage to some strain matching of the antigen and that's what has US continued to be excited about the multivalent strategy.

Sure. Thanks, Stephen so on the.

Contract manufacturers that we kind of look at the kind of roadmap the reordering of the drug substance and drug products in all of these.

We have multiyear contracts.

Stphane Bancel: And so for people that have not done multi-valence in a GMT setting before, trust me, the regulators, because we've had this discussion with regulators around CMV over the years. They're going to want to see a lot of analytical method characterizations so that you can prove to them that you know what is in the file.

As soon as we got well before the issuance of goodwill from billions of supply for 2020 of tool we have rights of way.

So a lot of all the arrows on the level of.

Additional supplies of oil suppliers and not to forget the drug substance.

Actually no. It is the place is on one of our site, where we actually.

Because of capacity of the drug substance even in the 3 billion those 2022.

Stphane Bancel: And that is, yet again, another big differentiation with Moderna. Thank you, Mike. Got it. Thank you. Your next response is from Gena Wang of Barclays. Please go ahead.

Minerva.

Sure.

Thank you.

Thank you the next piece of launches from Geoff Meacham with Bank of America. Please go ahead.

Gena Wang: Thank you for taking my questions. I also have two, one also related to the IP question. So I wanted to ask differently. I'm just wondering, Stephane, how many contract global manufacturing sites you have and how long, in general, the contract is? And the second question is also regarding the new boosted data. Thanks, Gena. Maybe I'll take that question first and then hand it back to Stphane on your IP question. So, a couple of things I would note.

Hi, Good morning, guys. Thanks, so much from the question just had two on COVID-19 the.

First one is what does your data tell you with real world effectiveness of tops of.

The three today.

As of now.

With respect to some of the main variance I'm just trying to reconcile the.

Gena Wang: The first is the level of titers; as you suggested, there's a little bit less than a two-fold difference between them. But you are seeing substantially higher titers, on the order of 1,400, when you give the very specific booster, that's mRNA-1273.351.

Stephen: I would note that this is happening already at day 50. This is an early time point that we're looking at at this point. We will also be looking at day 29.

Stephen: And in this case, we are effectively, it is a prime with the number 1273.351. It is the first dose of the strain first identified in South Africa. And so it's actually, there are two ways you could look at it. One is obviously that it both looks good. I think the other thing, and the way that I'm still looking at this is, it looks like we can very rapidly direct the immune response to an increased level of neutralizing titers against the variant of concern that was first identified in South Africa, 351, in this case. And if you compare the titers that we've achieved, even by day 15, between these two variants or between the ancestral strain and the 351 strain, it's really only the 351 strain that's getting to the...

We see maybe it's not as bad but we see.

Very big and bad flu season, and the winters.

Stephen: [inaudible] We think this starts to provide very early evidence, even at day 15, even after a priming dose, that there's going to be an advantage to some strain matching of the antigen. And that's what has us continue to be excited about a multivillain strategy. Stephane?

Tens of thousands of maybe hundreds of thousands of that that kind of scale. That's not a situation that most are willing to take a risk on because it obviously could be substantially worse on that and so we're probably not going to have a chance to wait for day data for cases to really breakthrough of year from after of explanation in the real world setting and let.

Stphane Bancel: Sure. Thanks, Stephen. So, Gina, at the contract manufacturers, we kind of look at the kind of raw material, you know, drug substance, and drug products. In all of these, you know, we have multi-year contracts. As soon as we got, you know, board authorization to go to 3 billion supplies for 2022, we right away sent a lot of orders and a lot of additional supplies to our suppliers. And not to forget the drug substance.

That start to guide re vaccination decisions at that point, it's almost too late.

And so I think at this at this level, we think for the very near term the correct and sort of conservative decision as to continue to try and maintain the highest level of broader community and the populations that are well vaccinated already.

Now if you look beyond the sort of epidemic phase of the pandemic fate that we're in with this variant evolution into the years beyond that sort of three four or five years from now hopefully, we're we're well past the current pandemic.

We still believe there's going to be source Kobe to re infections and as we share to the vaccines day, just a couple of weeks ago.

Stphane Bancel: Actually, Norwood is the place; it's on the Mondala site where we actually have the biggest capacity for drug substances, even in the 3 billion dose 2022 scenario. Thank you, your next response is from Geoff Meacham with Bank of America. Please go ahead. Good morning, guys.

We take that lesson from the previous endemic Corona virus epidemics that of happened.

Hundreds of years later in the.

You still see reinfection mortality substantial healthcare Moore costs associated with those viruses and we don't know whether started <unk> is worse than them are the same but we believe that that burden of disease. That's created by the fact that respiratory viruses.

Continually reinfect and when they do they can really have a devastating effect in high risk populations, particularly older immuno compromised, we think thats of real real probability in the future in fact, it would almost be unprecedented for that not to be the case in the coronavirus context.

Geoffrey Christopher Meacham: Thanks so much for the question. I just have two on COVID. The first one is, you know, what does your data tell you about real-world effectiveness of 1273 today? As of now, with respect to some of the main variants, I'm just trying to reconcile the need for annual boosters versus minimal breakthroughs thus far and high efficacy. And then the second question is, when the next-gen vaccines for COVID-19 are ready, when you have, you know, some permutations, what's the potential to leverage the technology to use different parts of the virus versus just modifying the spike? Or do you think this could add regulatory steps that make it difficult, even if it's theoretically possible? Thank you. Thank you, Geoff.

So for that reason, we believe there is going to be a need for continual boosters, whether it's annual or not and whether the multi valency continues to out of more and more balance is I don't think anybody can say it but it's certainly of situation will preparing for.

And stuff on just on the second question on the different modality.

Where stephen.

Yes.

Yes, I apologize on this your second question on.

On different modality in different parts of the end of it. So I think what is pretty clear from all of the vaccines. If you look across them, but certainly if you focus on the messenger RNA vaccines is that the high degree of efficacy. We're seeing of vaccines right now is based on spike protein Immunogenicity.

Stephen: Those are both good questions. So maybe I'll take the first one first, which is, you know, our real world evidence, the largest amount of it that we've seen, has been published by groups like the CDC, and continues to reinforce that the efficacy we saw in the clinical trial seems to be translating well into real world use, with very high efficacy against disease, against COVID-19. I think it's important to note, though, that this is all happening very acutely, right?

That is the antigens being expressed on.

Is it theoretically possible that non spike antigens could of provided the same protection I think it's definitely possible still forward looking possible.

But I think you would you would you would be remiss to look past the multiple large phase III trials that predict the provide pretty conclusive evidence of the value of of going up for spike towards the and trying to prevent COVID-19. So.

So I think you would probably if you went down that route how to have to read demonstrate that efficacy that may be increasingly difficult in a world where we have so so many good choices in terms of vaccines.

And so I'm not exactly sure how we go down that path even theoretically.

Stephen: We're still only months away, or months into the vaccination campaign, and the primary concern that we and others have from a public health perspective is really not what's going to happen right after vaccination, but what will this look like in nine months? What will this look like in 18 months?

Okay, great. Thank you so much.

Thank you. Your next response is from Corey cursed him on the J.

J P. Morgan. Please go ahead, hey, good morning, guys. Thanks for taking the questions I want to go back to the topic of the future contracts. I know this is kind of been asked in a couple of different ways, but based on discussions and negotiations that are currently taking place how much confidence do you have that there's going to be demand to fill up to 3 billion doses in and.

Stephen: And I think the really difficult situation everybody is in is you could say, well, let's wait until it's a year from now, and we see a reemergence of spikes of cases, we see, you know, maybe it's not as bad, but we see a very big and bad flu season in the winters, you know, tens of thousands, maybe hundreds of thousands of deaths, that kind of scale. That's not a situation that most are willing to take a risk on because it obviously could be substantially worse than that.

Dissipated supply that you that you think you could have next year, especially if people are getting a a single annual booster in the future and then the second question is from really of modeling perspective, or the price points currently being negotiated on future contracts comparable to what you have on the existing ones for 2021, just basically wanted.

Stephen: And so we're probably not going to have a chance to wait for data for cases to really break through a year from after vaccination in the real world setting and let that start to guide revaccination decisions. At that point, it's almost too late. And so I think at this level, for the very near term, the correct and sort of conservative decision is to continue to try and maintain the highest level of broadest immunity in the populations that are well vaccinated already.

See if we should be assuming stable pricing for modeling purposes for for 22. Thank you.

Yeah. So.

The question of Glory.

Obviously, I think part of the occurring just a phone call. So as I said, the my remarks from Webster of hearing from the customer of if you're coming of them on the market soaking fall.

Stephen: Now, if you look beyond this sort of epidemic phase, a pandemic phase that we're in with this very...

And so that on.

Some of the players and the Emma on them.

Stephen: [inaudible] and COVID-19. We believe there is going to be a burden of disease, reinfections, mortality, and substantial health care costs associated with those viruses. We don't know whether SARS-CoV-2 is worse than them or the same, but we believe that the burden of disease that is created by the fact that respiratory viruses are going to be more likely to be infected by SARS-CoV-2. And so we think that if people continually reinfect, and when they do, they can really have a devastating effect in high-risk populations, particularly older or immunocompromised.

<unk>.

And if you look at what the future needs of across the globe, you're going to see up to vaccinate out of all of it gets on.

Like maybe the desio on the side of the map doesn't work.

And then you about the other stuff at any of children across the World and then the are hosting so when you're out of all of those issues.

The reason we bill.

Building, an attribute end of supply of a mix between the appropriate areas and boost sales East coast. We believe the issue whether we're always looking for based on the day engagements. We have them go on us around the world.

The price setup.

Bandwidth he was a year ago.

Yeah of ago, you had people sitting on when they get to know the ship I the novara of the vaccine because of some.

Of the cost the digital.

Stephen: We think that's a real probability in the future. In fact, it would almost be unprecedented for that not to be the case in the coronavirus context. And so for that reason, we believe there is going to be a need for continual boosters, whether it's annual or not, and whether the multivalency continues to add more and more valencies. I don't think anybody can say yet. But it's certainly a situation we're preparing for. Stphane, just on the second question on the different modalities, for Stephen. Yeah, sorry, I yeah, I apologize.

Of the degenerate and I'm also the of it is Chinese I'll walk from them on a vaccine for my cable I won't five will still specific I won't turn the T V. I want the best thing because of the month of.

Second of in the failed on the <unk> will be seeing on him.

My quality of can be buckling speed.

And the Concorde.

Yes, yes, no on the pricing.

Question for modeling Delta I think I will I will give you any corner of.

But again the no.

No more discussion of the actual pricing and date of small company the complaint with the price of forgot all of these because on is gone.

Okay, Alright, perfect. Thank you Stephane thank.

Thank you.

Stephen: And that's your second question about different modalities and different parts of the engine. So I think what is pretty clear from all the vaccines, if you look across them, but certainly if you focus on the messenger RNA vaccines, is that the high degree of efficacy we're seeing in vaccines right now is based on spike protein immunogenicity. That's because that is the antigen that's being expressed. Is it theoretically possible that non-spike antigens could have provided the same protection?

Okay. Your next responses from the cash thing.

Hi Mind company. Please go ahead.

Great. Thank you. Thanks for the question on on the color.

Question I would have is just on the the 50 microgram going for the the booze turn against variance.

Would you.

The that potentially becoming your initial kind of prime boost vaccine, possibly in the future of you think you'll stick with the 100 micrograms.

Stephen: I think it's definitely possible, still forward-looking possible. But, you know, I think you would be remiss to look past the multiple large phase three trials that provide pretty conclusive evidence of the value of going after spike protein and trying to prevent COVID-19. So I think you would probably, if you went down that route, have to re-demonstrate that efficacy, which may be increasingly difficult in a world where we have so many good choices in terms of vaccines. And so I'm not exactly sure how we go down that path. Yeah, even theoretically.

Where the way whether it's we're told me. The three also and then just on Opex you know just any kind of color. When we think about 22 and 23 for David you know what cost of goods sold could look like once these quarterly variations kind of flush out and then what sort of Joseph operating margins could start off with Michael's. Thank you for the question.

Thanks Heart Us I'll take a stab of the first one and then David for the other.

So on 50 micrograms, obviously the data we share today is a small number of subjects, but we previously share and publish our phase two data on of slightly larger number of subjects looking at of 15 Microgram primary series that looked quite good and at least as measured by Immunogenicity seem to achieve level of that were consistent with one of.

Geoffrey Christopher Meacham: Okay, great. Thank you so much. Thank you. Your next response is from Corey Kasimov with J.P. Morgan. Please go ahead. Hey, good morning, guys.

My Gram dose. So it's certainly something we're going to look at as to whether or not we could pursue of 50 microgram primary series, but how we get there will depend upon.

Corey Kasimov: Thanks for taking the questions. I want to go back to the topic of future contracts. I know this has kind of been asked in a couple of different ways, but based on the discussions and negotiations that are currently taking place, how much confidence do you have that there's going to be demand to fill up to 3 billion doses of the anticipated supply that you think you could have next year, especially if people are getting a single annual booster in the future? And then the second question is from really a modeling perspective.

Data that we don't yet have right. So we will have to look at whether there are clear correlates of protection that we can use the bridge between those doses.

<unk>, we will have to look at different populations in which we started this doses. As an example has been share. We are evaluating 50 micrograms has the potential primary series even in pediatric populations. As you can imagine you don't need perhaps as high of dose and younger people than you do in other words. So there's a lot of things ahead of.

In terms of looking at whether or not of primary series from 50 micrograms as possible certainly for a booster series that is the top dose at which were looking and as we look forward. We will we will continue to carefully evaluate whether or not we can adopt that as of target dose across all of our applications.

Corey Kasimov: Are the price points currently being negotiated on future contracts comparable to what you have on the existing ones for 2021? See if we should be assuming stable pricing for modeling purposes for 2022. Yeah, so let me take a stab at the question, Corey. And if I miss anything, Corinne, just please add some color. So as I said in my remarks, you know, from what we're hearing from customers, this is becoming an M&A market looking forward, and so there are not so many players in the market and if you look at what the future needs across the globe you're going to still have to vaccinate others you know all others are not going to get vaccinated this year on the planet the map doesn't work And then you have adolescents, and then you have children across the world, and then you have, So when you add all those pieces...

But it'll depend upon data.

Great and then the two of the question on the on go ahead. Thanks.

Thanks, Kim Yep go ahead.

Yeah, so cost of goods and operating expense.

Trends as in 22 and beyond I guess, what I'd say, it's it's a little early to start giving the kind of guidance for 2022.

What I would say is the if you look at our cost of goods and the cost of the goods manufacturing those for we've been quite pleased with what we're seeing is we've ramped up production. Initially here in the U S. We've seen as I said yields have been better than we'd foreseen.

Corey Kasimov: The reason we are building up to 3 billion pounds of supplies as a mix between the prime series and boosters is because we believe that this is what the world is looking for, based on the daily engagements we have with governments around the world. It's a very different setup than what it was a year ago.

As we did the initial planning so that's obviously very helpful and we reiterated today we.

Stphane Bancel: You know, a year ago, you had people saying, oh, I'm going to get, you know, a cheap adenovirus vaccine because it's being supplied at cost. This is not a discussion anymore today. The discussion is, I want my mRNA vaccine for all my people. I want variant booster specific. I want multivariant.

We think right now the right planning of assumption continues to be 20 per cent cost of goods.

As you move beyond 21, you get into the question of vaccines versus therapeutics, we think cost of goods manufactured will be very competitive for this product and therefore margins and and the gross margins will depend very much on on the price levels were.

Stphane Bancel: I want the best because I don't want a second and a third and a fourth year with this thing. I need my country to be back on its feet. Yeah, no, and on the pricing question for modeling, I think I will give you any color. But again, there is no more discussion at all. But your price is this, and there's a small company; the company will price it at a cost of $3.

So I think it's early to to comment on.

Stphane Bancel: This discussion is gone. Okay. All right. Perfect. Thank you, Stephane. Thank you. Okay, your next response is from Hartaj Singh with Oppenheimer & Company. Please go ahead. Great. Thank you. Thank you for the question and all the color. You know, a question I would have is just on the 50 microgram going forward, you know, as a booster and against variants, would you see that potentially becoming your initial kind of prime boost vaccine, possibly in the future?

And then in terms of operating expenses, we are building up the company.

We continue to do that and as I mentioned, we on while our overall operating expenses were quite stable of the house billions of the first quarter, we do see the.

Trending up as we know move through the year and will continue to invest appropriately.

Stphane Bancel: Or do you think you'll stick with the 100 microgram route, you know, whether it's with 1283 also? And then just an op-ex, you know, just any kind of color when we think about 22 and 23, for David, you know, what cost of goods sold could look like, you know, once these corny variations kind of flush out, and then what your adjusted operating margins could start looking like also. Thank you for the question.

To drive the portfolio on Bussman to build of globally. So I would say you know will continue to do the and we'll give you better and more precise guidance here as we move closer to the 22 and be on.

Hartaj Singh: Thanks, Hartaj. I'll take a stab at the first one and then hand it to David for the other. So, on 50 micrograms.

Great. Thank you.

Thank you your next responses from Joseph Stringer with need them in the company. Please go ahead.

Stephen: You know, obviously, the data we share today is from a small number of subjects, but we previously shared and published our phase two data on a slightly larger number of subjects looking at a 50-microgram primary series that looked quite good and, at least as measured by immunogenicity, seemed to achieve levels that were consistent with a 100-microgram dose. So it's certainly something we're going to look at as to whether or not we could pursue a 50-microgram primary series.

Hi, Good morning has sort of taken our questions just the other one on manufacturing capacity here of.

You.

Potential move to the next generation COVID-19 vaccines I was wondering if you could give us a sense maybe the qualitatively in terms of the.

Given the modularity of the of the technology of.

One of potential manufacturing ramp would look like for some of the second gym vaccines in terms of manufacturing capacity and the ramp relative to what we had seen width of 12 70, great. Thank you.

Stephen: But how we get there will depend upon data that we don't yet have, right? So we will have to look at whether there are clear correlates of protection that we can use to bridge between those doses, or we will have to look at different populations in which we study those doses. As an example, you know, it's been shared; we're evaluating 50 micrograms as a potential primary series, even in pediatric populations, as you can imagine, you don't need perhaps

Yes, it's defense so it's going to set you free of being cost strained by manufacturing capacity. So if you look at this yeah the only.

Quote Unquote August of Playa harder me then from.

Some of those in the one which is the next part of the right number is because we're moving the capacity and so the way to think about any of the of on any of our walking half to add new lines of to increase the capacity the rest of the foot on products, we'd be much faster because to the manufacturing of slowing down the ramp. So he paid that that you think about.

Stephen: We have a lot of things ahead of us in terms of looking at whether or not a primary series for 50 micrograms is possible, certainly for a booster series.

Stephen: As we look forward, we will continue to carefully evaluate whether or not we can adopt that as a target dose across all of our applications, but it will depend on data. Great. And then just a quick question on the... Go ahead, Dave.

The the Mickey violence booster luxuries as we think about any of the the for the.

To see him he lost the will not be on the back for the guys. You know as part of of Pleasant, but the budget that we need at the end of of 2019, we need the plan for a pandemic, we're supposed to be commercial several yes on the road and so the team at the remarkable.

Remarkable drove to get to the point that we are and we're going to stay.

David: Um, yeah, cost of goods and operating expense. Trans, as in 22 and beyond. I guess what I'd say is it's a little early to start giving that kind of guidance for 2022. What I would say is that if you look at our cost of goods and the cost of goods manufacturing thus far, we've been quite pleased with what we're seeing as we've ramped up production. Initially, here in the US, we've seen, as I said, yields have been better than we'd foreseen.

I would anticipate all of a year so playful strength.

Oh in the middle table lots of shipper profit Hall product because trust me of the phone is done the Red Hot Bye Bye Bye of course from her on the planet and wound up to be able to help protect of all people of which we just kept because when the opinion on the pandemic twenty-twenty. So I can see pay the full variance and fault new product garage.

But we will make sure that's about enough capacity call strength, which is the way the Freeman.

A supply of volume that.

Some people might think maybe to a rescue as I said in my remarks, the pipeline of of companies us of on the play with these and so it is just behind the material on vaccine segregate the.

David: As we did the initial planning, so that's obviously very helpful. And we reiterated today that we think right now the right planning assumption continues to be 20% cost of goods. As you move beyond 21, you get into a question of vaccines versus therapeutics. We think the cost of goods manufactured will be very competitive for this product, and therefore margins and gross margins will depend very much on price levels, which I think it's early to comment on.

Couple of the get out and.

And without putting manufacturing for six months.

We are going to be really happy to have that capacity. So that that will off product. We kept the probably the market every single goes at the toilet no team of can make sure that the market was.

Great. Thanks for taking the question.

Thank you thank.

Thank you your next responses from Miami of Ohio of S. C D and the right. Please go ahead.

Hey, guys. Thanks of the question one quick one side of a fan on financial.

Financials. He gave me a little clarity on topics investments around the expanding capacity production should we think of that the level of setting chop actually going forward with a modest income slug all of those who would think of that is primarily on one side of dog and.

David: And then in terms of operating expenses, you know, we are building out the company. We will continue to do that. And as I mentioned, while our overall operating expenses were quite stable at a half billion in the first quarter, we do see that trending up as we now move through the year. And we'll continue to invest appropriately to drive the portfolio investment and to build up globally. So I would say, you know, we'll continue to do that, and we'll give you better and more precise guidance as we move closer to 22 and beyond. Green.

And then secondarily, you've given a little bit of clarity, there's a lot of clarity uhm uhm Cogs from this quarter of there's the rest of the year of go.

Going forward. So we think about the absolute the absolute pause per unit.

David: Thank you. Thank you. Your next response is from Joseph Stringer with Needham & Company. Please go ahead. Hi, good morning.

Pretty linearly related to dose.

Joseph Stringer: Thanks for taking our questions. Just another one on manufacturing capacity here. You know, like you, I was wondering if you could give us a sense, maybe even qualitatively, in terms of the – you know, given the modularity of the technology, what a potential manufacturing ramp would look like for some of these second-gen vaccines, in terms of manufacturing capacity and the ramp, relative to what we had seen with 1273. Thank you.

Are the other attributes royalties et cetera differences, the differences and and I would like to use between different vaccines.

That suggested that's not the right way to think about it.

Yeah. So capex if I understand the question is guidance for 22 and beyond on the Cup X.

And again, unfortunately, it's a bit early to be able to comment. We if you look now we've increase store or guidance for this year based on the development side of occurred over the last couple of months Uhm is the the study state going forward into the future.

Stphane Bancel: Yes, Stphane, so the 233 ramp has been constrained by manufacturing capacity. If you look at this here, the only reason we quote-unquote only supply a hundred million to those in Q1, which is an extraordinary number, is because we are building the capacity. And so the way to think about it is, as Juan and his team are working hard to add new lines and increase the capacity, the ramps for the follow-on products will be much faster because today manufacturing is slowing down the ramp.

You know I think for a company of of what will be all of a size and scope and the level of vertical integration I think it's reasonable to expect that will continue the bill to invest a.

Stphane Bancel: So I anticipate that, as you think about... the multivalent booster launches, as you think about RSV, flu, and CMV launches, we will not be on the back foot. As you know, as part of our 2020 budget that we did at the end of 2019, we did not plan for a pandemic. We were supposed to be commercial several years down the road, and so the team has done a remarkable job to get to this point, but we are, and we're going to stay for, I would anticipate all of the year, supply for strength.

In our own capacity and therefore.

You can expect will have on going capex as of precisely on this range Moore somewhat of above or below I really wouldn't want to give you the precision as of yet because we're it's not the clear yet.

Uhm, but I think an ongoing capex trend will be appropriate for the company.

Stphane Bancel: You know, Corinne and her team would love to be able to sell more products because, trust me, their phone is turning red hot with calls from around the planet, and we would love to be able to help protect more people, but we just can't because we were not planning on a pandemic in 2020.

In terms of sort of Cogs I think that's the right way to think about.

The cost of manufacturing this product it will be impacted at some level, but the amount of materials in the product, but when you're talking about micrograms of materials, it's really not the significant.

Stphane Bancel: So I anticipate that for variants and for new product launches, we will make sure that we are not capacity constrained, which is why the 3 million supply volume that some people might think, you know, is maybe too aggressive. As I stated in my remarks, the pipeline of a company is also going to play with this, and flu is just behind the multivalent vaccine. So if you look at a couple of years out, and we're not building manufacturing for six months, we're going to be really happy to have that capacity so that as we launch products, we can supply the market with every single dose that Corinne and her team can make sure that the market wants. Great Thanks for doing our questions. Thank you. Thank you. Your next response is from Mani Foroohar of SCB Lyrics. Please go ahead.

So I think you can as the simplest assumption assume it's a pretty study.

Uhm cost of manufacture as we're seeing right now.

Great and the quick follow up on it comes on the contracting I noticed the asking various forms you're talking about the O U S manufacturing being about a quarter inch behind you asked manufacturing Uhm right now based on the yard as good as on volume the those who delivered the rest of what we have from.

Mani Foroohar: Hey guys, thanks for the question. One quick one starting on financials. You gave a little clarity on CapEx investments around expanding capacity for production. Should we think of that level setting CapEx going forward with a modest increase going forward? Or should we think of that as primarily a one-time build out? And then, secondarily, you've given a little bit of clarity, in fact, a lot of clarity around COGS for this quarter versus the rest of the year.

The other M on a competitive or in the duopoly right now market share. If you guys of somewhere between five and 10 per cent and a lot of these countries into the deliberate doses uhm.

How do you think about ketchup on manufacturing of deliveries.

And how that influences the ongoing contacting for next year.

He does your does your stronger and come in the person in the U S suggest you of better position for you is contracting volume or do you think of 2021. The the results from 2021 contracting have nothing to do with 2022 on every year the whole new game between you two.

Mani Foroohar: Going forward, should we think about the absolute COGS per unit as being pretty linearly related to dose? Are there other attributes, royalties, et cetera, differences, differences in product use between different vaccines? Would that suggest that that's not the right way to think about it?

That's a good question. So as we said the the plan was on with the the plenty of of executing on and so when we spoke to countries and set up the <unk>.

We might not of should the quarter believe right from the countries as we knew cut back it would come on.

We had not anticipated early.

Early part of of Yeah, that's where it can be able to export from the U S.

David: Yeah, so CapEx, if I understand the question, guidance for 22 and beyond on CapEx. And again, unfortunately, it's a bit early to be able to comment. If you look now, we've increased our guidance for this year based on the developments that have occurred over the last couple of months. But is that a steady state going forward into the future? You know, I think for a company of what will be our size and scope and level of vertical integration, I think it's reasonable to expect that we'll continue to invest in our own capacity, and therefore, you can expect we'll have ongoing CapEx. Is it precisely in this range or somewhat above or below?

And the peace we should not forget. These is you know it's reported in the media of baby. The U S is gonna be of any way too many of vaccine very very soon if not the alrighty and so the the capacity that we are building in the U S and the <unk> I think he's also going to supply of the world. So I think once you then debate the very big acceleration of.

The shipments to countries outside the U S. As we go into <unk>, even more on queue francophone or as we met the also obligations of of you is going on.

Great. That's really helpful and do you guys did you guys comment on where you on what you're seeing on the real world in terms of the vaccine hesitant slash and market demand. There's been a couple of media reports that that's starting to be more of of limiting factor as opposed to supply at least in the U S. Currently certainly not globally.

David: I really wouldn't want to give you that precision as of yet because it's not that clear yet, but I think an ongoing CapEx trend will be appropriate for the company. In terms of cogs, I think that's the right way to think about it. The cost of manufacturing this product will be impacted at some level by the amount of materials in the product. But when you're talking about micrograms of materials, it's really not that significant.

Correct, the with any of seats on the the daily no. None of those for me to write the CDC fall I think since the mid April of roughly the number of vaccination for the end of the country is going down and he's not because of supply. If you look at the shipments coming from the the companies the keeping cruise Inc, or exactly of we have been sink and so on.

David: So I think you can, as a simplest assumption, assume it's a pretty steady cost of manufacture, as we're seeing right now. Great. And a quick follow-up on some of the contracting. I know this has been asked for in various forms.

What day is an oversupply of of vaccine is very of the miles driven program now so you'll see some states across the country the of us very.

The very active in the vaccination and we're talking about sexual set that were very high rates of of a condition is going up every day.

Of of popular on for you as you know we're at the.

Or wait from any vaccine that you have heard that the federal government I think yesterday of the day before the note that if it wasn't the stuff the shift products from Wednesday tool to the yoga based on that sure demanded just waiting to vaccinate consistency.

Mani Foroohar: You talk about OUS manufacturing being about a quarter-ish behind US manufacturing. Right now, based on your disclosures on volume doses delivered, versus what we have from the other mRNA competitor in the duopoly right now, market share for you guys is somewhere between 5% and 10% in a lot of these countries, in terms of delivered doses. How do you think about catch-up on manufacturing and deliveries and how that influences the ongoing contracting for next year, i.e. does your stronger incumbent position in the U.S.

The way that doesn't have a supply of oxygen issue anymore that was true in January of 21.

Great. Thanks, all back on queue and because of the others.

Thank you.

Thank you your next responses from Simon Baker with Redburn. Please go ahead.

Thank you for taking my questions Uhm since you're just going back to uhm the Patriot on how I P lives stuff on as you set the <unk> to talk with like the like the smell of in the system. The point about let me teach global manufacturing capacity. So just the support that given the you announced you would you know actually wife.

Stphane Bancel: suggest having better positions for US contracting volume? Or do you think 2021, the results for 2021 contracting have nothing to do with 2022, and every year is a whole new game between you? It's a good question.

<unk> I can help take the could you normally choose any company.

On the following seven months to exercise that freedom the 12th right.

And also sticking with the with the vaccine coming back to slide 20th.

Stphane Bancel: So, as we said, the plan was always the plan we're executing on. And so when we spoke to countries and set up those 21 APAs, we managed the quarter delivery to the countries as we knew capacity would come online. We had not anticipated the early part of the year that we would be able to export from the US.

Do you have take on T cell response, Uhm I'm, just the that six to eight months of pay the price appointment vaccination. The 12th So let me see and then just a quick question on the financials. David I think you mentioned, the the and the SG&A on cue on the western costs related to.

Stphane Bancel: And the piece we should not forget is, as you know, it's reported in the media daily, the US is going to be having way too many vaccines very, very soon, if not already. And so the capacity that we are building in the US and adding is also going to supply the world. So I think one should anticipate a very big acceleration of shipment to countries outside the US as we go into Q2 and even more in Q3 and Q4, as we meet our obligation to the US government. Great, that's really helpful.

It should be <unk>.

Hi, I just wanted to if you could give us any color on the the non becoming one of elements of S. G and I and coupons from you think about evolution across the it. Thanks so much.

Thank you so much of I think the first of all of them I'd be and given the fact that you said that they get the financials. So.

I'm not the way of any company upside the is going up the the I'm on a again going back to what that is crab when would up first we'll figure out of to make them on any of <unk> asking to regulate both of the stuff. The clinical study and that doesn't happen quickly we of monitoring the feel very close to me as we all the way.

Mani Foroohar: And do you guys have, did you guys comment on where you are, what you're seeing in the real world in terms of vaccine hesitancy slash end market demand? There's been a couple of media reports that that's starting to be more of a limiting factor as opposed to supply, at least in the US currently, certainly not globally, correct in the US and you see it on the daily numbers published by the CDC for I think since mid-April roughly the number of vaccination per day in the country is going down and it is not because of supply if you look at the shipment coming from the companies they keep increasing exactly as we have been saying and so now there's another supplier of vaccine it's really a demand driven problem now so you see some states across the country that are still very active in vaccination and we're lucky that we're very high rate of vaccination is going up every day the other part of the country as you know where they have way too many vaccine as you have heard that the federal government I think yesterday or the day before has announced that they were going to start to shift products from one state to the other based on actual you know demand and it's really linked to vaccine hesitancy. The US doesn't have a supply of vaccine issue anymore. That was true in January, not for now.

Half, but at the stage.

I think that the.

Is from eaten up the the park, that's what the impact of course, but the one a placebo give us plenty of tool.

Stephen Hall.

So the data we have from today is the the initial analysis on the boosters we are.

As we've previously announced we've been looking at a study ourselves and with the NIH. They are running a primary series vaccination study and also looking at other.

Elements and so we will perhaps get T cell data in in the midterm.

But at this point, we do not have any T. So the the yet on the on the boosters.

We do have ongoing studies.

Studies with NIH on in general on our phase one on her own face too.

And if it becomes important of the future. We can obviously look at T cell responses.

With waiting immunity out 612 months in those studies as well.

We don't have a specific plan to do that at this point, but.

We are pretty encouraged by the historical correlation between our previously reported T cell data and public T cell data and the neutralizing titers that are that are obviously much easier to measure over time of course are wider range of subjects on T cells.

And David.

Yeah. So in terms of the the expenses, we incurred of the first quarter, including in commercial Yeah. We had some one time the expenses to set up businesses around the world, but the preponderance of the the total operating expenses, including in.

Stphane Bancel: Great. Thanks. All by thank you, in case there are others. Thank you. Thank you. Your next response is from Simon Baker with Redburn. Please go ahead.

Simon P. Baker: Thank you for taking my questions. Firstly, just going back to the debate around IP waivers, Stphane, as you said... [inaudible] and also sticking with the vaccine, going back to the slide, period post-primary vaccination for 12, And then just a quick question on the finances. David, I think you mentioned that in SG&A and Q1, there were some costs related to effectively staffing. Supply. I was wondering if you could give us any color on the non-recurring one-off elements of SGNA in Q1 as we think about evolution across the year.

Michelle I would say will continue and therefore, that's why I gave you some guidance. The if you start at the at the half billion spend the level and the first quarter on the fourth of last year, we're expecting now the see the trend up notably as we move forward through the year.

Sure Uhm, which we thought it would start sooner, but we now expect will start on the second quarter. So I'm running a business of the size on the global basis, we think that the spend level is quite reasonable from me honest.

Stphane Bancel: Thank you so much. I'll take the first one on IP, and Stephen will take the T7, and David will take the financials. So, I'm not aware of any company of size that is going after mRNA. Again, going back to what I described, one would have to first figure out how to make mRNA GMP before asking the regulators to start.

Alright, Thank you very much.

[noise] I'm showing off by the questions at this time colored on like to turn the conference back of which is Stefan <unk>.

Stphane Bancel: We are monitoring the field very closely, as we always have, but at this stage, I think that this is really not the point that will impact. Of course, 21 is impossible, but given 21, it's possible. So the data we have from today...

Thank you so much for upgrading into this code on the great questions. We'll look forward to seeing you at the time of day on the 27th stay safe everybody.

Stephen: So let's take the initial analysis on the boosters. We are, as we previously announced, we've been looking at a study ourselves and with the NIH. They are running a primary series vaccination study and also looking at other elements, and so we will perhaps get T cell data in the midterm. But at this point, we do not have any T cell data yet on the boosters. We do have ongoing studies with NIH in general in our Phase 1 and our own Phase 2.

Alright.

Ladies and gentlemen, this concludes today's confines. Thank you for your participation you have a wonderful day and you may all of disconnect.

[music].

Stephen: And if it becomes important in the future, we can obviously look at T cell responses with waning immunity out 6-12 months in those studies as well. We don't have a specific plan to do that at this point, but we are pretty encouraged by the historical correlation between our previously reported T-cell data and published T-cell data and the neutralizing titers, which are obviously much easier to measure over time across a wider range of subjects.

Stephen: Yeah, so in terms of the expenses we incurred in the first quarter, including in commercial, yeah, we had some one-time expenses to set up businesses around the world. But the preponderance of the total operating expenses, including in commercial, I would say, will continue.

David: Thank you very much. I'm sure there are no further questions at this time. I would now like to turn the conference back over to Stphane Bancel.

Stphane Bancel: Thank you so much for participating in this call and for the great questions. We look forward to seeing you at Science Day on May 27th. Stay safe, everybody. Have a nice day. Bye. Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You have a wonderful day, and you may all disconnect.

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