Q1 2023 Moderna Inc Earnings Call

Operator: Good day, and thank you for standing by. Welcome to Badena's First Quarter 2023 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1-1 on your telephone. You will then hear an automated message advising your hand to press star-1-1 again.

Speaker 1: Good day and thank you for standing by. Welcome to Moderna first quarter 2023 conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message device in your hand is raised to withdraw your question. You can press star one one again.

Operator: Please be advised that these conferences are being recorded. I would like to hand the conference over to your speaker today. Levina to Luke Dar, please go ahead.

Speaker 1: Please be advised that these conferences are being recorded. I would now like to hand the conference over to your speaker today, Lavina Tulluktar. Please go ahead.

Lavina Talukdar: Thank you, Kevin. Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's first quarter of 2023 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 Stefan Bancel, our chief executive officer, Stephen Hogue, our president, Arpa Gure, our chief commercial officer, and Jamie Mock, our chief financial officer.

Speaker 2: Thank you, Kevin. Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's first quarter of 2023 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.

Speaker 2: On today's call are Stefan Von Sell, our Chief Executive Officer, Stephen Hogue, our President, Arpa Gure, our Chief Commercial Officer, and Jamie Mock, our Chief Financial Officer.

Lavina Talukdar: Before we begin, please note that this conference call will include forward-looking statements made pursuant to the safe harbor provisions of the Private Security 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. With that, I will turn the call over to step on.

Speaker 2: Before we begin, please note that this conference call will include forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see slide 2 of the accompanying presentation and our SEC filings for important risk factors Inf Otto story.

Speaker 2: that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. With that, I will turn the call over to Stefan.

Stephane Bancel: Thank you, Ravina. Good morning or good afternoon, everyone.

Stephane Bancel: Today I will start with a business review. Steven will then review our clinical programs before our FA gives an update on our commercial progress. Jimmy will present our financial results, and I will come back to close. So in the first quarter, we recorded revenues of $1. Gap net income of $79 million, and Gap diluted earnings per share of 19.

Speaker 3: Thank you, Rabin. Good morning or good afternoon everyone.

Speaker 3: Today I will start with a business review. Stephen will then review our clinical programs before Arthur gives an update on our commercial progress and plans.

Speaker 3: Jimmy will present our financial results and I will come back to close.

Speaker 3: So in the first quarter we recorded revenues of $1.9 billion, GAP net income of $79 million, and GAP diluted earnings per share of $0.90.

Stephane Bancel: Cash and cash investment of $16.4 billion at the end of the quarter. We continued in Q1, executing on our capital allocation strategy, prioritizing investment in our business. In the first quarter, we invested $1.

Speaker 3: Cash and cash investment of 16.4 billion at the end of the quarter.

Speaker 3: We continued in Q1 executing on our capital allocation strategy, prioritizing investment in our business.

Stephane Bancel: in R&D, continuing investment in less-stage clinical programs and progressing our entire pipeline. Ask and costs were approximately 300 million dollars in a quarter, which included investment in digital and also AI infrastructure, and approximately $100 million dollars in capital investment. In 2043, our team has been very active.

Speaker 3: In the first quarter, we invested $1.1 billion in R&D.

Speaker 3: Continuing investment in late-stage clinical programs and progressing our entire pipeline.

Speaker 3: As you any cost, we are approximately 100 million in a quarter, which is good investment in digital and also AI infrastructure.

Speaker 3: and approximately $100 million in capital investments.

Stephane Bancel: This includes the acquisition of RISO in Japan, collaborations with CipomX, Life Edit, and Generation Bury. All of these investment opportunities further expand the reach of modernas and modernity technology. We are growing Modana and the money of Pratim. $536 million dollars, where we turn to shareholders who will make a purchase of 3.6 million shares in the course. You have been to a commercial in the first quarter.

Speaker 3: In 2043, our BLE team has been very active. This includes the acquisition of RE0 in Japan.

Speaker 3: collaborations with SITUM, X, LIFE-EDIT and Generation Biome. All of these investment opportunities further expand the reach of modern-ass and modern technology.

Speaker 3: We are growing Moderna and Monet operating system.

Speaker 3: 766 million dollars where we tend to share all the shares of pre-port 6 million shares in the quarter.

Stephane Bancel: We continue to expect $5 billion in COVID vaccine deliveries in 2023 from the already signed advanced purchase agreement, with $1.8 billion of COVID cells in Q1, where we're on our way to achieve a billion in APA. The commercial team is actively negotiating to sign new contracts with customers in major markets to finalize additional orders that will add to the five billion. The US team is negotiating with pharmacy chains, hospital networks, and customers. As a reminder, the $5 billion of Spendap does not include any fall 2023 US country.

Speaker 3: Let me turn to commercial mini crabis quarter.

Speaker 3: We continue to expect $5 billion in COVID vaccine deliveries in 2023 from already signed advanced purchase agreements.

Speaker 3: With 1.8 billion dollars of COVID-19 in Q1, we are well on our way to achieve a billion in APS.

Speaker 3: The commercial team is actively negotiating to sign new contracts with customers in major markets to finalize additional orders that will add to the five billion.

Speaker 3: The US team is negotiating with pharmacy chains, hospital networks, and other customers.

Speaker 3: As a reminder, the $5.00 billion dollar of stagnant PN does not include any form 2023 U.S. contracts.

Stephane Bancel: So these new U.S. contracts are important to a business as they're additional. The team is also making progress in Japan, in Europe, and across countries in Asia, the Middle East, and also Latin America. We recently signed a new contract with Australia for 2020. Our commercial organization is also preparing for the launch of RASV, our next respiratory commercial product, in 2024. They're educating the medical community on the health burden of ours. Our medical team is participating in major infectious disease medical congresses and sharing new data that show the strong profile of our IVVax.

Speaker 3: So these new US commercial contracts are important to a business as they are additional.

Speaker 3: The team is also making progress in Japan, in Europe and over countries in Asia, Middle East and also Latin America.

Speaker 3: We recently signed a new contract with Australia for 2020.

Speaker 3: Our commercial organization is also preparing for the launch of our SD in 2024, our next respiratory commercial product.

Speaker 3: The IZCK King, the medical community on the health building of Azi.

Speaker 3: Our medical team is participating in major infectious disease medical congresses.

Stephane Bancel: To prepare for RATV launch, our manufacturing teams have already begun producing the drug substance, the MRN molecule, and a molecule for our HIV vaccine. That vaccine will be supplied as a pre-filled syringe. We believe that we can help drive adoption by pharmacists and doctors. We'll see some of our RSI products. In oncology, for MRI, 40157, now called individualized neoentigen therapy or INT, we are scaling up manufacturing to support clinical development and commercial markets. Our commercial team is also working to prioritize tumor types to select for additional phase-free studies in addition to melanoma and lung. Turning to the pipeline,

Speaker 3: and sharing new data that shows a strong profile of the RZ vaccine.

Speaker 3: To prepare for RSV launch, our manufacturing team has already began producing drug substance, the mRNA molecule, for RSV vaccine.

Speaker 3: Dilectin would be supplied as a prefilled syringe.

Speaker 3: We believe that we help drive adoption by pharmacists and doctors via system over RSV products.

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Speaker 3: now called individualized neo-antigen therapy or INT.

Speaker 3: We are scaling up manufacturing to support clinical development and commercial markets.

Speaker 3: Our commercial team is also working to prioritize two more types to select for additional phase-through studies in addition to melanoma and lung.

Stephane Bancel: At Vaccine Day, we discuss detailed beta from our RZ vaccine, and that's what we presented at recent medical meetings. We believe the profile of our RZ vaccine is potentially best in class. We share top-line data on the full program; I'm not thinking about the initiation of phase three or three, the phase-free study that we intend to use for accelerated approval, as well as strategy for our next generation crew program. We also announce the start of phase three for the next-gen COVID vaccine and mount 1283, which will be refrigerator stable.

Speaker 3: Turning to the pipeline.

Speaker 3: At Vaccine Day, we discuss detailed data from our RZ vaccine that were presented at recent medical meetings.

Speaker 3: We believe the profile of an RZ vaccine is potentially best in class.

Speaker 3: We should apply data on the group program and I think the initiation of phase 3 or 3, the phase 3 study that we intend to use for accuracy approval, as well as strategy for our next generation of group programs.

Speaker 3: We also announced the start of phase three for next-gen COVID vaccine, amount is 1283.

Stephane Bancel: Today we are also announcing a new program for pandemic readiness for influenza H5. In latent vaccine, our CNV face-crip trial continued progress, and is greater than 50% enrolled. I'm also very pleased to announce progress in our early stage programs, EBV and HIV. EBV, as you know, has two programs; the EB phase one trials to prevent mononononucleosis with MRN189 are fully enrolled in adults and also in adults, or EBV trials for the treatment of long-term complications for EBV infection have now started enrolling, and for HIV, we share interim analysis from a phase one study at

Speaker 3: We should be refrigerators stable. Today we will show another thing, a new program for pandemic readiness for influenza H5.

Speaker 3: In latent vaccine, our CMV phase three trial continued progress and is greater than 50% enrolled. I'm also very pleased to announce progress in our early stage program, EBV and HIV. EBV, as you know, has two programs. The EBV phase one trials to prevent mononucleosis with mRNA 1189.

Speaker 3: are fully enrolled in adults and also in adolescents. For EBV trials for the treatment of low-term complication for EBV infection, as now started enrolling.

Stephane Bancel: We also introduce new programs. We are working on vaccines for neuroviruses and Lyme disease. Lyme is the first bacterial pathogen we are targeting with a harmonic platform and a vaccine.

Speaker 3: And so HIV, we shall interrogate this from a Facebook study at vaccine names. We are going to introduce new programs. We are working on vaccines for neurovirus and Lyme disease. Lyme is the first bacterial pathogen we are targeting with our mini-platform with vaccine. intermediate vaccine.

Stephane Bancel: In paraptics, we participated in an ASTR meeting where we presented detailed phase two data from our R&C program partners with Merr. Later on in the call, Stephen will take you through the data presented there. Already, this pipeline is also making progress. We're excited to announce a new master for our peer program. The Phase 1-2 trial in propionic academia or pier is now in the expansion phase, and additional data from this study will be presented at the American Society for gene and cell therapy later this morphine.

Speaker 3: In FRAP ethics, we participated in ASCR making where we presented decal phase 2 data for more R&C program partnerships with Merck.

Speaker 3: Later on the call, Stephen will take you through the data presented there.

Speaker 3: Our readiness pipeline is also making progress.

Speaker 3: We're excited to announce a new milestone for our PA program. The Phase 1-2 trial in Proprenique Academia or PA.

Speaker 3: He is now in those expansion phase. And additional data from this study will be presented at the American Society for Geo and Self-Corruption later this month in May.

Stephane Bancel: The company continues to expand at a rapid pace. We have 47 programs underway, which now reflect the inclusion of new programs and not in the quarter and removes programs that are not continuing to develop. The full-of-of-up-f pipeline can be seen in the appendix of this presentation or, obviously, on our website. We now have more than 4, team members and 17 commercial subsidiaries across America, Europe, and Asia Pacific. In addition to our commercial subsidiaries, we also announced we're opening a Seattle office as a technology hub, where we're hiring data scientists and engineers who will help digitize our business and expand our AI capabilities.

Speaker 3: which now affect the inclusion of new program announced in the quarter and removes programs that are not continuing to develop. The full of this pipeline can be seen in the appendix of this presentation or obviously on our website. We now have more than 4,000 team members and 17 commercial subsidiaries across Americas, Europe and Asia-Pacific.

Stephane Bancel: I'm also happy to announce that Modena was officially recognized in March as a great place to work, but a great place to work institute. $16.4 billion of cash in the other quarter is enabling us to scale across our research, development, manufacturing, commercial, and GNA. With that introduction, let me now talk to Stephen. Thank you.

Speaker 3: I'm also happy to announce Modena was officially recognized in March as a great place to work by the Great Place to Work Institute.

Speaker 3: Of 16.4 billion dollars cash at the other quarter is anything else to scale across the research, development, manufacturing, commercial, and GNA. With that introduction, let me now talk to Steven.

Stephen Hoge: Good morning or good afternoon, everyone. Today, I'll review the clinical progress in R&D at Moderna in the first quarter and highlight select data from the past few months that have been presented. The core of our respiratory portfolio is made up of our vaccines against COVID-19, flu, and RSV, which are either commercial or in phase three. We're advancing second generation vaccines. This includes our second generation refrigerator stable COVID-19 vaccine candidate, MRN12-1283, which is rapidly enrolling in its phase three study, and two next generation influenza vaccines that are in phase two.

Speaker 4: Thank you, Stu Vau. Good morning or good afternoon everyone. Today I'll review the clinical progress in R&D at Moderna in the first quarter and highlight select data from the past few months has been presented. The core of our respiratory portfolio is made up of vaccines against COVID-19, flu and RSV.

Speaker 4: which are either commercial or in phase three. We're advancing second generation vaccines. This includes our second generation of refrigerator stable COVID-19 vaccine candidate, mRNA-1283, which is rapidly enrolling in its phase three study. And two next generation influenza vaccines that are in phase two. We believe combination vaccines will be the future of our respiratory franchise.

Stephen Hoge: We believe combination vaccines will be the future of our respiratory franchise, and we're pleased that we now have five different combination vaccine candidates in early clinical trials, including two specifically designed for pediatric populations. With 11 programs in clinical trials, including four in phase three, and covering five different respiratory viruses, we believe this represents the broadest and most advanced portfolio of respiratory virus vaccine candidates. Now turning specifically to COVID, the FDA recently provided updates on several fronts.

Speaker 4: And we're pleased that we now have five different combination vaccine candidates in early clinical trials, including two specifically designed for pediatric populations. With 11 programs in clinical trials, including four in phase three, and covering five different respiratory viruses.

Speaker 4: We believe this represents the broadest and most advanced portfolio of respiratory virus vaccine candidates. Now turning specifically to COVID, the FDA recently provided updates on several fronts.

Stephen Hoge: Our Omicron targeting, bi-valent COVID-19 vaccine, targeting the original MBA4-5 strains, is now our only authorized formulation in the United States, with a simplified and streamlined regimen for both children and adults. Individuals 65 years of age and those with certain kinds of immunocompromise are now also eligible to receive additional doses as needed or recommended by their physicians. As we look to the fall, the strain selection for an updated composition for fall 2023 boosters is now expected to come at the June 15th Burb-Pact meeting.

Speaker 4: Our Omicron targeting by the Ellen COVID-19 vaccine targeting the original MBA 4.5 strains is now our only authorized formulation in the United States with a simplified and streamlined regiment for both children and adults. Individuals 65 years of age and

Speaker 4: those with certain kinds of immunocompromise, are now also eligible to receive additional doses as needed or recommended by their physicians.

Speaker 4: As we look to the fall, the strain selection for an updated composition for fall 2023 boosters is now expected to come at the June 15th meeting. Moving to RSV, we're pleased by the profile of our vaccine in older adults.

Stephen Hoge: Moving to RSV, we're pleased by the profile of our vaccine in older adults with high and consistent efficacy against RSV, lower respiratory tract disease across populations in our large Phase 3 study. At two recent medical meetings, we shared data showing our vaccine's efficacy was consistently high across all age groups, including in the oldest adults, and in participants with preexisting comorbidities that put them at higher risk. MRRNA 1345 has also shown a favorable tolerability profile, with AEs mostly grade 1 or grade 2, mild to moderate. As we shared during Vaccines Day today, we have not seen any cases of Guillain-Barre syndrome or other severe demilitarization events in the trial. Moving to flu

Speaker 4: with high and consistent efficacy against RSV lower respiratory tract disease across populations in our large phase 3 study.

Speaker 4: At two recent medical meetings, we've shared data showing our vaccine's efficacy was consistently high across all age groups, including in the oldest adults and in participants with pre-existing comorbidities that put them at higher risk.

Speaker 4: MRN-A1345 has also shown a favorable tolerability profile with AES mostly grade 1 or grade 2 amount of moderate Okay.

Speaker 4: As we shared during vaccines today, today we have not seen any cases of Guillain-Barré syndrome or other severe demilining events in the trials. Moving to flu, our Phase 3 FXXI study in the Northern Hemisphere, P302, is ongoing.

Stephen Hoge: Our Phase 3 efficacy study in the Northern Hemisphere, P302, is ongoing, and last month, we announced that the study did not accrue sufficient cases to declare early success at the interim analysis and that the DSMB recommended that we continue the study. The trial is still accruing cases through the end of this flu season, with an update expected this summer.

Speaker 4: And last month, we announced that the study did not accrue sufficient cases to declare early success at the intermenalysis, and that the DSMB recommended that we continue the study. That trial is still accruing cases through the end of this flu season, with an update expected this summer.

Stephen Hoge: The preliminary immunogenicity data from that P302 study showed that H. A.I. neutralizing titers were consistent with superiority for both A strains and non-inior immunogenicity for the B strains when compared to the licensed flu vaccines. Now I'm pleased to announce that we've initiated our Phase 3 P303 flu study with an updated formulation of MRN1010. P303-03 is testing an update that is designed to increase the HAI neutralizing titers against the B antigen. This is an immunogenicity study, and it's expected to enroll approximately 2,400 adults this spring.

Speaker 4: The preliminary immunogenicity data from that P302 study showed that HAI neutralizing titers were consistent with superiority for both A strains and non-inferior immunogenicity for the B strains when compared to the licensed flu vaccine.

Speaker 4: Please to announce that we've initiated our Phase 3 P303 flu site with an updated formulation of mRNA-1010. P303 is testing an update that is designed to increase the HAI neutralizing titers against the B antigens.

Speaker 4: This is an immunogenicity study and is expected to enroll approximately 2,400 adults this spring.

Stephen Hoge: We believe this study will support our initial flu filing and the potential for a 2024 launch if approved by record. Now turning to our latent vaccines, our C&V vaccine phase three study in women and children of childbearing age is ongoing and has enrolled more than 50% of participants. We also have an ongoing phase one, two, adolescent dose-ranging study with this vaccine that will expand potential eligible populations. As Stefan mentioned earlier, we continue to make significant progress against all of our latent vaccines in earlier stage clinical trials, including candidates against EBV, HIV, and VZV.

Speaker 4: We believe this study will support our initial flu filing and the potential for a 2024 launch if approved by regulators. Now turning to our latent vaccines, our CMV vaccine phase 3 study in women of childbearing age is ongoing and has enrolled more than 50% of participants. We also have an ongoing phase 1, 2 adolescent dose ranging study with...

Stephen Hoge: As Stefan mentioned, our EBV vaccine includes two vaccine candidates; our EVV program includes two vaccine candidates, and we're on 1189 and 1195, and are in clinical trials for the prevention of infectious mononucleosis and for the prevention of a longer-term sequela of EBV infection, respectively. Now, on Vaccine Day, we are pleased to share interim results of our HIV vaccine, and we're only 1644, which continues Our pipeline in therapeutics targets unmet needs across immunoncology, rare diseases, cardiovascular disease, and autoimmune diseases.

Speaker 4: EBV vaccine includes two vaccine candidates, or EBV program includes two vaccine candidates, M-1-1-1-8-9, and M-1-1-1-95, and are in clinical trials for prevention of infectious mononucleosis, and for the prevention of longer-term sequelope of EBV infection, respectively.

Speaker 4: Now, at Vaccines Day, we are pleased to share interim results of our HIV vaccine and tomorrow morning 16-44, which continues to advance.

Speaker 4: Our pipeline in therapeutics forgets unmet needs across immunoncology, rare disease, cardiovascular disease, and autoimmune diseases. All the trials in these therapeutic areas are ongoing, and today I'll highlight a few of the recent updates.

Stephen Hoge: All the trials in these therapeutic areas are ongoing, and today I'll highlight a few of the recent ones. On slide 19, are the data shared at AACR from our phase two study in adjuvant melanoma, with a combination of our individualized neoantogen therapy plus Ketruita versus Ketra alone. The Kaplan-Myer curve for relapse-free survival is shown here. Overall, there was a 44% reduction in the rate of relapse or death with the combination of I&T and Ketruda compared to Ketruda alone.

Speaker 4: On slide 916, are the data shared at AACR from our Phase II study in Agiman, Melanova, with a combination of our individualized neoantigen therapy plus Ketruda versus Ketruda along.

Speaker 4: The Kaplan-Meier curve for relapse-free survival is shown here. Overall, there was a 44% reduction in the rate of relapse or death with a combination of INT and Keytruda compared to Keytruda alone.

Stephen Hoge: We are encouraged by the continued separation of the two curves with a follow-up at 18 months. However, note that there are very few participants beyond the 140-week cut off at the right of this slide, less than 10 participants in total.

Speaker 4: We are encouraged by the continued separation of the two curves with a follow-up at 18 months. Note that there are very few participants beyond the 140-week cutoff at the right of this slide, less than 10 participants in total. Thus, as the data continues to mature with additional follow-up time, we are encouraged to have a follow-up at the next step.

Stephen Hoge: Thus, as the data continues to mature with additional follow-up time, we remain cautiously optimistic that this picture will get even better. Now, on slide 17, I want to briefly highlight some of the additional data that was shared at ACR. The subgroup analysis confirms the strength of the treatment effect across two important markers that are known to predict responses to key Trude. Again, on this slide, we're looking at relapse-survival. On the left side, the results are stratified by high tumor mutational burden in red and low tumor mutational burden in blue.

Speaker 4: we remain cautiously optimistic that this picture will get even better. Now on slide 17, I want to briefly highlight some of the additional data that was shared at AACR. The subgroup analysis confirm the strength of the treatment effect across two important markers that are known to predict responses to key truth.

Speaker 4: Again, in this slide we're looking at the relapse-free survival. On the left side, the results are stratified by high tumor mutational burden in red and low tumor mutational burden in blue.

Stephen Hoge: In each case, the solid lines are for the IMP combination, and the dash line is for keytruda monotherapy control. If you start by looking and comparing the control arms for keytruda, you will note that the TMB high participants, the red dash line, have higher relapse-free survival than the TMB low participants in the blue dash line. This is expected because of what we know about Key Trude and shows that the controls are performing as we expect.

Speaker 4: In each case, the solid lines are for the INT combination and the dashed line is for Keytruda Monotherapy Control.

Speaker 4: If you start by looking and comparing the control arms for key truda, you will know that the TNB high participants, the red dash line, have a higher relapse-free survival than the TNB low participants in the blue dash line.

Speaker 4: This is expected because of what we know about Keytruda and shows that the controls are performing as we expect.

Stephen Hoge: Now moving to the I&T combination arms, the solid lines, and comparing them against the dotted lines of the same color, you can clearly see that the I&T combination led to higher relapse-free survival for both TMB high and TMB low patients. This highlights the robustness of the response for I&T. It's also quite exciting to note the improved response rate seen in the blue TMB low population, which historically does not respond well as well to Ketrudas.

Speaker 4: Now moving to the INT combination arms, the solid lines, and comparing them against the dotted lines of the same color, you can clearly see that the INT combination led to higher relapse-free survival for both TMB-high and TMB-low patients. This highlights the robustness of the response for INT.

Speaker 4: It's also quite exciting to note that the improved response rate seen in the blue TMB low population, which historically does not respond as well to Keytruda. On the right, you'll see the results as stratified by PD-L1 status. Now as with the TMB analysis, PD-L1 is known to predict response rates to immunotherapy.

Stephen Hoge: On the right, you'll see the result as stratified by PDL1 status. Now, as with the TMB analysis, PDL1 is known to predict response rates to immunotherapy. As you can see by the dashed lines for Ketruda monotherapy control groups, the relapse-free survival curves look better for PDL1 positive tumors, these are the red dash lines, and worse for patients unfortunate enough to have PDL1 negative tumors, the blue dash lines. This isn't surprising as key true monotherapy acts by blocking the PD1F. As with TMB on the left, the solid lines on the RFS curves for the combination show the combination of I&T.

Speaker 4: As you can see by the dashed lines for Keytruda monotherapy control groups, the relapse-free survival curves look better for PD-L1 positive tumors, these are the red dashed lines, and worse for patients unfortunate enough have PD-L1 negative tumors, the blue dashed lines.

Speaker 4: This isn't surprising as Keytruda monotherapy acts by blocking the PD-1 PD-L1 axis.

Speaker 4: Now as with TMB on the left, the solid lines on the RFS curves for the combination show the combination of INT.

Stephen Hoge: Red denotes PDL1 positive, and blue denotes PDL1 negative. In both cases, there was an increase in the rate of relapse-survival with the combination treatment. It is encouraging to note again that the response rates are significantly improved for the PDL1 negative patients. Indeed, the hazard ratio in this subgroup analysis is 0.162.

Speaker 4: Red denotes PD-L1 positive and blue denotes PD-L1 negative.

Speaker 4: In both cases, there is an increase in the rate of relapse-free survival with the combination treatment.

Speaker 4: It is encouraging to note again that the response rates are significantly improved for the PDL-1 negative patients. Indeed, the hazard ratio in this subgroup analysis is 0.162.

Stephen Hoge: And pulling back, these data highlight that the observed improvement in relapse-free survival seen in the initial analysis of our phase two study looks broad-based across sublines, with an indication of a potentially important benefit, even in patients who have higher risk of progression, whether due to PDL1 status or tumor mutational burden compared to QTRuda Monotherapy alone. Now, these positive data are just the beginning for this ongoing study. We'll be sharing additional data from the Phase 2 study at ASCO, including distant metastasis-free survival, which was a secondary endpoint in the primary analysis just conducted, and the same data cuts that I just shared.

Speaker 4: Now pulling back these data highlights that the observed improvement in Relapse Recival seen in the initial analysis of our Phase 2 study looks broad based across subgroups.

Speaker 4: with an indication of a potentially important benefit, even in patients who have higher risk of progression, whether due to PD-L1 status or tumor mutational burden compared to ketone monotherapy alone.

Speaker 4: Now, these positive data are just the beginning for this ongoing study. We'll be sharing additional data from the Phase II study at ASCO, including distant metastasis preservival, which was a secondary endpoint in the primary analysis just conducted in the same data cut that I just shared.

Stephen Hoge: We'll also be sharing important additional biomarker data. In addition, this protocol calls for subsequent analysis at 51 events, which is when we will also be updating the Kaplan Meyer curves for Real Street survival with longer follow-up time across the full population. We eagerly await those results.

Speaker 4: We'll also be sharing important additional biomarker data. In addition, this protocol calls for subsequent analysis at 51 events.

Speaker 4: which is when we will also be updating the Kaplan Myakras for real estate survival with longer follow-up time across the full population. We eagerly await those updates.

Stephen Hoge: I&T has received breakthrough therapy designation in the United States and prime designation in Europe, which will facilitate frequent dialogue with regulators as we work to quickly advance this treatment for patients. As Stefan mentioned earlier, we plan to initiate our phase three study in adjuvant melanoma in 2023 and rapidly expand to additional tumor types, including non-small cell lung cancer. We're working closely with our partner Merck to explore additional opportunities within Key Trude's approved indications and beyond that label. Finally, a quick update on our propionic acidemia program.

Speaker 4: INT has received breakthrough therapy in the United States and prime designation in Europe which will facilitate frequent dialogue with regulators as we work to quickly advance this treatment to our patients.

Speaker 4: Now, as the bond mentioned earlier, we plan to initiate our Phase III study in Agilent Melanoma in 2023 and rapidly expand to additional tumor types, including non-small cell lung cancer.

Speaker 4: We're working closely with our partner, Merck, to explore additional opportunities within key trutters approved indications and beyond that label.

Arpa Garay: Our Phase 1-2 study is ongoing and currently enrolling patients in the 0.9 milligrams per kilogram cohort. We've identified a dose for expansion and have moved into that expansion arm of the study. We're pleased to announce just yesterday that a clinical update through the time point earlier this year, including an update on safety and the rate of major metabolic decompensations from the higher-dose cohorts and including longer-term follow-up from the lower-dose cohorts, will now be presented.

Speaker 4: Finally, a quick update on our Propriontic Acidemia Program. Our Phase 1-2 study is ongoing and currently enrolling patients and in the 0.9 milligrams per kilogram cohort. We've identified a dose for expansion and have moved into that expansion arm in the study. Thank you.

Speaker 4: We're pleased to announce just yesterday that a clinical update through the earlier, at a time point earlier this year, including an update on safety and the rate of major metabolic decompensations from the higher dose cohorts, and including longer term follow from the lower dose cohorts, will now be presented at the American Society of Gene and Cell Therapy Meeting on May 18th.

Arpa Garay: at the American Society of Gene and Cell Therapy meeting on May 18th. The abstract for that presentation is now available and can be found in the link on this slide. We look forward to sharing a lot more about the progress of this medicine and our other rare disease programs in the months ahead. With that, I'll turn the call over to ARPA. Thank you, Steven, and good day to everyone.

Speaker 4: The abstract for that presentation is now available and can be found in the link on this slide. We look forward to sharing a lot more about the progress of this medicine and our other rare to these programs in the month ahead.

Arpa Garay: I will first start with a review of sales in the quarter. On slide 22, we summarize the composition of our sales in the first quarter. As you can see on the chart, sales to Europe were $0.6 billion, and sales to the rest of the world were $1.3 billion.

Speaker 2: With that, I'll turn the call over to Arpa. Thank you, Stephen, and good data, everyone. I will first start with a review of Sales in the Quarter. On 522, we summarize the composition of our sales in the first quarter.

Speaker 2: As you'll see on the chart, our sales to Europe were $0.6 billion and sales to the rest of the world were $1.3 billion.

Arpa Garay: Approximately 1.8 billion of sales from previously announced APs were delivered in the first quarter of 2023, representing the vast majority of the $2 billion expected in the first half of 2023. As a reminder, U.S. sales of COVID vaccines are expected to begin in the second half of 2023 with updated strain strained mashed vaccines. Now as we turn to slide 23, looking at the 2020 delivery, today we are reiterating a minimum of approximately $5 billion in COVID vaccine deliveries from current advance purchase agreements, and we continue to expect additional orders from key markets.

Speaker 2: Approximately $1.8 billion of sales from previously announced APAs were delivered in the first quarter of 2023, representing the vast majority of the $2 billion expected in the first half of 2023.

Speaker 2: As a reminder, US sales recovered vaccines are expected to begin in the second half of 2023 with updated strain-mashed vaccines. Now as we turn to flight 23, looking at the 2023 COVID deliveries, today we are reiterating a minimum of approximately five million doses.

Arpa Garay: Of the $5 billion in 2023 deliveries from previously announced APs, 2 billion, as I mentioned earlier, are expected to be delivered in the first half of 2023. We have already delivered 1.8 billion of that 2 billion in the first quarter, with substantial shipments to Japan and the European Union. We expect to deliver the remaining approximately $3 billion in previously announced APAs in the second half of this year. Additionally, we expect new sales in the U.S., Japan, the European Union, Asia, and Latin America.

Speaker 2: I mentioned earlier are expected to be delivered in the first half of 2023.

Speaker 2: We have already delivered $1.8 billion of that $2 billion in the first quarter, with substantial fulfillment to Japan and the European Union.

Speaker 2: We expected to deliver the remaining approximately $3 billion in previously announced APAs and the second half is here.

Speaker 2: Additionally, we expect new sales in the US, Japan, European Union, Asia, and Latin America.

Arpa Garay: I'm happy to announce that the commercial team has signed a contract with the Australian government for 2020. Our discussions with commercial buyers in the U. are positive, and I will elaborate on that in a short time.

Speaker 2: I'm happy to announce that the commercial team has signed a contract with the Australian government for 2023.

Speaker 2: Our discussion with commercial buyers in the US are positive, and I will elaborate on that shortly.

Arpa Garay: It is clear that our customers are aware that COVID is still a substantial health burden. Throughout 2020, COVID continued to be a leading cost of hospital care. Data available through September 2020 lists COVID as the third leading cause of death in the U.S., only after heart disease and cancer, as shown in the first chart on the left.

Speaker 2: In our discussions with commercial customers in the US, it is clear that our customers are aware that COVID is still a substantial health burden.

Speaker 2: Throughout 2022, COVID continued to be a leading cause of hospitalizations.

Speaker 2: Data available through September 2022, let's COVID as the third leading cost of depth in the U.S., only after heart disease and cancer, as shown in the first chart on the left.

Arpa Garay: The chart on the right-hand side of the slide shows the most recent data available for U.S. hospitalizations for COVID flu and ours. As you'll see, with current season hospitalizations of over 600,000 for COVID, the hospitalization rate for COVID is almost triple that of flu, as well as more than triple that of RSV. There continues to be a clear need to protect against severe COVID infections, and our customers recognize that need. For the fall of 2023, we expect U.S. volume to be approximately 100 million doses. As we highlighted earlier in the year, the successful transition of our U.S. COVID business from a government-driven to a commercial-driven model is critical. We have made great progress on this.

Speaker 2: The chart on the right-hand side of the slide shows the most recent data available for U.S. hospitalizations for COVID flu and RSV.

Speaker 2: As you'll see, with current scenes in the hospitalizations of over 600,000 per COVID, the hospitalization rate for COVID is almost triple that of blue, as well as more than triple that of RSV. There continues to be a clear need to protect against severe COVID-19.

Speaker 2: transition of our US COVID-19 system from a government driven to a commercial driven model is critical.

Arpa Garay: executing on our action plan to rapidly develop this commercial market. Importantly, the commercial team is in active discussions with customers throughout the U. We are contracting with national and regional pharmacies, integrated delivery networks, government health providers, including the VA, the CDC, and the Department of Defense, group purchasing organizations, and other providers. In addition, our established national distribution infrastructure

Speaker 2: We have made great progress on this front, executing on our action plans to rapidly develop this commercial market.

Speaker 2: Importantly, the commercial team is in active discussions with customers throughout the U.S.

Speaker 2: We are contracting with national and regional pharmacies, integrated delivery networks, government health providers, including the VA, the CDC, and the Department of Defense, through purchasing organizations and other providers.

Arpa Garay: infrastructure, and our Moderna direct e-commerce site is fully operational. Additionally, our global supply chain is in place to handle all U.S. customer needs, including pre-filled syringes and single dose files at the time of launch. I'm excited to share some of the launch preparation activities for the updated COVID-19 vaccine for fall vaccination camp. We believe these activities will drive consumers to get vaccinated. First, we are taking an Omni-Channel approach via tailored digital messaging to healthcare providers.

Speaker 2: In addition, our established national distribution infrastructure and our Moderna Direct e-commerce site is fully operational. Our global supply chain is in place to handle all U.S. customer needs, including free-filled syringes and single-dose files at the time of launch.

Speaker 2: I'm excited to share some of the launch preparation activities for the Update in COVID-19 vaccine for fall vaccination campaigns.

Speaker 2: We believe these activities will drive consumers to get vaccinated. First, we are taking an omnichannel approach via tailored digital messaging to healthcare providers.

Arpa Garay: This multi-faceted approach will allow us to drive broad awareness and continue to emphasize the ongoing need for COVID protection. Later this year, we will be disseminating customized content to drive physician demand among immunizing physicians, institutional decision makers, as well as influencers. We are also partnering with our customer base across the different commercial segments to assist with their fall immunization programs. We believe there is an opportunity to continue to provide education, both to staff as well as to patients.

Speaker 2: This multifaceted approach will allow us to drive broad awareness and continue to emphasize the ongoing need for COVID protection.

Speaker 2: Later this year, we will be disseminating customized content to drive physician demand.

Speaker 2: across immunizing physicians, institutional decision-makers, as well as influencers.

Speaker 2: We are also partnering with our customer base across the different commercial segments to assist with their fall immunization programs.

Speaker 2: We believe there's an opportunity to continue to provide education, both to staff as well as to patients.

Arpa Garay: And we believe there is an opportunity to harmonize and simplify the vaccination process for patients who are going in to get their flu vaccine. Consumer promotion will be focused primarily in the fall of this year, driving patients to seek Dernas COVID vaccine through significant CTC efforts. As I mentioned earlier, we are looking to simplify the experience for our consumers who are already going in to get their seasonal influenza vaccine this fall. We are excited for this fall.

Speaker 2: flu vaccines. Consumer promotion will be focused primarily in the fall of this year, driving patients to seek Moderna's COVID vaccine through significant TTC efforts.

Speaker 2: As I mentioned earlier, we are looking to simplify the experience for our consumers who are already going in to get their seasonal influenza vaccine this fall. We are energized for this fall season.

Arpa Garay: Moving on to slide 27, I will update you on

Speaker 2: Moving on to slide 27, I will update you on our second near-term commercial opportunity, which is RSC.

Arpa Garay: And the commercial team is undertaking a number of activities to ensure that we develop what we hope will be a large share of that market as quickly as possible. We are already raising awareness of the health and economic burden of RSV by generating and presenting detailed data from our phase three study at major medical meetings. Our medical team has shared additional data showing that vaccine efficacy is consistently high across all tested age groups, as well as in participants with pre-existing comorbidity. The figures on the right-hand side of the slide detail efficacy data in these important subgroups.

Speaker 2: We're excited for the expected 2024 launch of our RSV vaccine, and the commercial team is undertaking a number of activities to ensure that we develop what we hope will be a large share of that market as quickly as possible.

Speaker 2: We are already raising awareness of the health and economic burden of RSV by generating and presenting detailed data from our Phase III study at major medical meetings.

Speaker 2: Our medical team has shared additional data showing that vaccine efficacy is consistently high across all tested age groups, as well as in participants with pre-existing comorbidities.

Arpa Garay: As we share these data at Medical Congresses, we are encouraged by payer and key opinion leader feedback on our data and the application of our MRNA platform to prevent our, We're engaging with payers and NYPACs to ensure access on lawn, and the commercial team is active in local markets preparing for a commercial launch in 2024. Specifically, we are building our digital capabilities so that we will be able to efficiently educate customers as soon as a vaccine is approved. And as we invest in pre-launch activities, we have already begun manufacturing components of the vaccine in pre-filled syringes.

Speaker 2: The figures on the right-hand side of the slide detail advocacy data in these important subgroups.

Speaker 2: As we share these data at medical congressives, we are encouraged by payer and key opinion leader feedback on our data and the application of our mRNA platform to prevent RSC.

Speaker 2: We're engaging with payers and night hacks to ensure access upon launch.

Speaker 2: and the commercial team is active in local markets preparing for a commercial launch in 2024.

Speaker 2: Specifically, we are building our digital capabilities so that we will be able to efficiently educate customers as soon as the vaccine is approved.

Speaker 2: And as we invest in prelaunch activities, we have already begun manufacturing components of the vaccine in prefilled syringes. We are excited about the profiles of the products we will be launching into these large respiratory markets.

Arpa Garay: We are excited about the profiles for the products we will be launching into these large respiratory markets. As we discussed that day, the estimated total addressable markets for our three key respiratory vaccines are substantial. With COVID, RSV, and flu offering potential addressable markets of 15 billion, 6 to 8 billion, and 6 to 9 billion, respectively, we believe we can take a sizable share of this roughly $30 billion respiratory market. The commercial team is well underway preparing for RSV and flu launches in 2024.

Speaker 2: As we discussed at Vaccine Day, the estimated total addressable markets for our three key respiratory vaccines are substantial.

Speaker 2: With COVID, RSV, and flu offering potential addressable markets of $15 billion, $6 to $9 billion respectively.

Speaker 2: We believe we can take a sizable share of this roughly 30 billion respiratory market. The commercial team is well underway in preparing for RSV and Blue launches in 2024.

Arpa Garay: We believe our opportunity in the restitory market will continue to expand beyond 2024 with our next-gen vaccines and, importantly, with future combination vaccines, positioning us to drive share over time. Now onto slide 29, I want to share with you how the commercial team is helping identify eligible patient populations in the aschvent and neoasgment settings for various tumor types. Along with our partner Merck, we have already announced that we will start phase three trials in adjuvant melanoma and adjuvant non-small cell lung cancer.

Speaker 2: We believe our opportunity in the respiratory market will continue to expand beyond 2024 with our next-gen vaccines and importantly with future combination vaccines, positioning us to drive share over time.

Speaker 2: Now, on to slide 29, I want to share with you how the commercial team is helping identify eligible patient populations in the adjuvant and neoadjuvant settings for various tumor types. In this video, I will show you how to identify eligible patients in the adjuvant.

Speaker 2: Along with our partner, Merck, we have already announced that we will start phase 3 trials in the Atrium at Melanova and Atrium at Non-Small Felt One Cancer.

Arpa Garay: There is an annual population of over 130,000 new patients in the U.S. and Europe for these two indications. Patient populations for additional potential adjuvant and neoadjuvant tumor types are listed on the right hand side.

Speaker 2: There is an annual population of over 130,000 new patients in the U.S. and Europe in these two indications.

Speaker 2: Patient populations for additional potential adjuvant and neo-adjuvant tumor types are listed on the right-hand side. Our commercial teams are working closely with our clinical teams to identify the largest unmet need for interoperable tumor types for our individualized neo-anceture therapy.

Arpa Garay: Our commercial teams are working closely with our clinical teams to identify the largest unmet need for addressable tumor types for our individualized neo-antitin therapy. We are excited to be launching into a space where we have one medicine for one patient in areas of great unmet need in cancer. Given this individualized approach, we are reimagining our commercial model, along with our partner, along the patient care journey, end-to-end. With that, I will turn it over to, Thanks, Arpa, and below, everyone.

Speaker 2: We are excited to be launching into a space where we have one medicine for one patient in areas of great unmet need and cancer.

Speaker 2: Given the individualized approach, we are reimagining our commercial model along with our partner along this patient care journey end to end.

James M. Mock: This morning, I will cover our Q1 financial performance, review the framework for our 20203 financial outlook, and provide a quick recap from our recent Vaccines Day presentation. Moving to our first quarter results, starting on slide 31. Total product sales decreased 69% year over year to $1. The decrease in 2023 is consistent with our expectations and mainly driven by lower sales volume compared to the prior year. Cost of sales for the first quarter of 2023 was $792 million.

Speaker 5: With that, I will turn it over to Jamie. Thanks, Arpa, and hello, everyone. This morning, I will cover our Q1 financial performance, review the framework for our 2023 Financial Outlook, and provide a quick recap from our recent Vaccines Day presentation.

Speaker 5: Moving to our first quarter results starting on slide 31.

Speaker 5: Total product sales decreased 69% year-over-year to $1.8 billion.

Speaker 5: The decrease in 2023 is consistent with our expectations and mainly driven by lower sales volume compared to the prior year.

James M. Mock: In addition to our unit-driven manufacturing costs, this includes royalties of $86 million and the following charges: $148 million for inventory write-related to excess and obsolete COVID-19 products, $135 million for unutilized manufacturing capacity, and losses on firm purchase commitments and related cancellation fees of $95 million. These charges, other than royalties, were driven by costs associated with surplus production capacity and an overall lower demand forecast primarily for lower income countries. Cost of sales as a percent of product sales was 43% compared to 17% in Q1, 2022.

Speaker 5: Cost of sales for the first quarter of 2023 was $792 million.

Speaker 5: In addition to our unit-driven manufacturing costs, this includes royalties of $86 million and the following charges.

Speaker 5: $148 million for inventory write-downs related to excess and obsolete COVID-19 products. Unutilized manufacturing capacity of $135 million.

Speaker 5: and lock us on firm purchase commitments and related cancellation fees of $95 million.

Speaker 5: These charges, other than royalties, were driven by costs associated with surplus production capacity and an overall lower demand forecast, primarily for lower income countries. Cost of sales at the percent of product sales was 43 percent compared to 17 percent in Q1 2022. In 2017, thirty since 2017, 60 percent of principal sales were taken toasty prices annually and product sales blasting into the capital space were negatively rapided by the hiring industry.

James M. Mock: The increase was driven by the aforementioned charges for lower product sales compared to the prior year and higher manufacturing costs as we switch to smaller dose vials, as well as lower product sales to absorb fixed manufacturing costs.

Speaker 5: The increase was driven by the aforementioned charges over lower product sales compared to the prior year and higher manufacturing costs as we switch to smaller dose files.

James M. Mock: Research and development expenses were $1 billion, which increased by 104% versus the prior year.

Speaker 5: as well as lower product sales to absorb fixed manufacturing costs.

James M. Mock: The increase in R&D spend continues to be driven by clinical trial-related expenses, particularly for our phase three studies for RSV, seasonal flu, and CMV. The increase in R&D is also attributable to increases in personnel-related costs due to increased headcount and our recently announced collaboration agreements with Life Edit and Generation Bio. SG&A expenses were $305 million, reflecting an increase of 14% year over year. The growth in spending was primarily driven by continued investments in personnel and outside services in support of our marketed products and related commercialization activities, as well as our company expansion. Income tax provision was a net benefit of $384 million for the first quarter, driven by our full-year outlook, which includes international provisions, R&D credits, and non-recurring items. Net income was $79 million compared to a net income of 3% of 3% of $3.

Speaker 5: Research and development expenses were $1.1 billion, which increased by 104% versus the prior year. The increase in R&D spend continues to be driven by clinical trial-related expenses, particularly with our Phase III studies for RSV, seasonal flu, and CMV.

Speaker 5: The increase in R&D was also attributable to increases in personnel-related costs due to increased headcount and our recently announced collaboration agreements with LifeEdit and Generation Bio. SG&A expenses were $305 million, reflecting an increase of 14% year-over-year. The increase in R&D was $105 million, reflecting an increase of 14% year-over-year.

Speaker 5: The growth in spending was primarily driven by continued investments in personnel and outside services in support of our marketed products and related commercialization activities as well as our company expansion. Human tax provision was a net benefit of $384 million for the first quarter.

Speaker 5: driven by our full year outlook, which includes international provisions, R&D credits, and non-recurring items. Net income was $79 million compared to a net income of $3.7 billion last year. Diluted earnings per share was $0.19 compared to a diluted earnings per share of $8.58 in Q1 2022.

James M. Mock: We ended Q1 with cash and investments of $16.4 billion compared to $18.2 billion at the end of the fourth quarter of 20

James M. Mock: investments of $16.4 billion compared to $18.2 billion at the end of the fourth quarter of 2020.

We ended Q1 with cash and investments of $16.4 billion, compared to $18.2 billion at the end of the fourth quarter of 2022. The decrease was driven by a reduction of cash deposits as we delivered product against prepayments and our sharebi.activity.

James M. Mock: Supply declined from $2.6 billion at the end of 2022 to $1.8 billion by the end of Q1, 2020, keeping in mind our expectations. Now turning to line 33. I wanted to give an update on the progress we've made on our capital allocation priorities; our top investment priority has

Cash deposits for future product supplies declined from $2.6 billion at the end of 2022 to $1.8 billion by the end of Q1 2023.

future product supply declined from $2.6 billion at the end of 2022 to $1.8 billion by the end of Q1, 2023, in line with our expectations.

Now turning to slide 33. I wanted to give an update on the progress we've made on our capital allocation priorities. Our top investment priority has been and will continue to be reinvesting in the base business across multiple areas.

James M. Mock: As mentioned earlier, R&D spending in the first quarter increased 104% year over year, and we continue to project R&D investments of approximately $4.5 billion for the full year of 2020. As discussed in our vaccine state presentation, the majority of this investment is for our respiratory vaccine franchise, which we expect to generate significant returns in the relatively near term. We are also investing in our digital capabilities, the commercial build out of the organization, as well as expanding our manufacturing footprint. We plan to significantly accelerate our capital expenditures in 20203, as we expand both our international and U.S. manufacturing footprint.

As mentioned earlier, R&D spending in the first quarter increased 104% year over year, and we continue to project R&D investments of approximately $4.5 billion for the full year of 2023.

As discussed at our vaccine state presentation, the majority of this investment is for our respiratory vaccine franchise, which we expect to generate significant returns in the relatively near term. We are also investing in our digital capabilities, the commercial build-out of the organization, as well as expanding our manufacturing footprint. We plan to significantly accelerate our capital expenditures in 2023.

James M. Mock: Our second investment priority is to seek attractive external investments in collaboration opportunities that will enable and complement our platform. As previously announced, we successfully closed our acquisition of Oro in the first quarter, and the integration of the operations is well underway.

James M. Mock: Additionally, we entered into two collaboration agreements during the quarter with Life Edit and Generation Bio. We are in multiple active discussions regarding additional external collaboration opportunities and will continue to be disciplined in our approach. After evaluating internal and external investment opportunities, we then assess additional uses of cash.

of the operations are well underway. Additionally, we entered into two collaboration agreements during the quarter with LIFE-EDIT and Generation Bio.

We are in multiple active discussions regarding additional external collaboration opportunities and will continue to be disciplined in our approach.

James M. Mock: In the first quarter of 2023, we repurchased 3.6 million shares for $526 million. We had $2.3 billion of share repurchase authorization remaining as of March 31, 2023. Now let's turn to our updated 2020 financial framework on slide 34. We continue to have advanced purchase agreements for COVID vaccine sales for approximately $5 billion for delivery in 2020, and we are in active negotiations for commercial market and government contracts in the U. And additional contracts for Japan, the EU, and other key markets.

we repurchased 3.6 million shares for $526 million.

We had $2.3 billion of share repurchase authorization remaining as of March 31, 2023.

Now let's turn to our updated 2023 financial framework on slide 34. We continue to have advance purchase agreements for COVID vaccine sales for approximately $5 billion for delivery in 2023.

And we are in active negotiations for commercial market and government contracts in the U.S. and additional contracts for Japan, the EU, and other key markets. We continue to expect first-half sales to be approximately $2 billion.

James M. Mock: We continue to expect first half sales to be approximately $2 billion. Due to the seasonal nature of our respiratory business, we expect sales in Q2 of 0.2 to 0.3 billion dollars. We continue to expect fiscal year 2020 reported cost of sales to be 35 to 40% of sales, which includes 5% royalty. For Q2, we expect cost of sales between 0.5 and 0.6 billion dollars. Due to the seasonal nature of our business, we expect our cost of sales in the first half of the year to be above the range of 35 to 40% and then reduce our average through the second half of the year.

Due to the seasonal nature of our respiratory business, we expect sales in Q2 of 0.2 to $0.3 billion.

We continue to expect fiscal year 2023 reported cost of sales to be 35 to 40% of sales, which includes 5% royalties. For Q2, we expect cost of sales between 0.5 and 0.6 billion dollars.

Due to the seasonal nature of our business, we expect our cost of sales in the first half of the year to be above the range of 35 to 40 percent and then reduce our average through the second half of the year. For our NDNF DNA, we continue to expect full year expenses to be approximately $6 billion with approximately 4.5 billion in research and development.

James M. Mock: For R&D and SCNA, we continue to expect full-year expenses to be approximately $6 billion, with approximately $4.5 billion in research and development. We now anticipate a full-year tax benefit of $0.3 to $0.5 billion, driven by R&D credits, international provisions, and non-recurring items. And finally, we continue to expect capital expenditures of approximately $1 billion. Before I turn the call back to Stefan, for those who weren't able to attend or haven't seen the webcast from our Vaccines Day presentation, I wanted to quickly recap the financial takeover.

We now anticipate a full year tax benefit of 0.3 to $0.5 billion, driven by R&D credits, international provisions, and non-recurring items.

And finally, we continue to expect capital expenditures of approximately $1 billion. Before I turn the call back to Safan, for those who weren't able to attend or haven't seen the webcast from our Vaccine Day presentation.

James M. Mock: Given the current significant investment in our respiratory franchise, we wanted to lay out the potential return we envisioned by the year 2027 for this branch. Picking up where ARPA ended her earlier remarks, we believe the market size for COVID, RCE, and flu will be over $30 billion by 2027. And we expect to capture $8 to $15 billion of this market. While our cost of goods sold percentage will remain elevated in the short term as we transition from a pandemic to an endemic environment, we believe this should normalize to a 20 to 25% range by 2027.

I wanted to quickly recap the financial takeaways. Given the current significant investment in our respiratory franchise, we wanted to lay out the potential return we envisioned by the year 2027 for this franchise.

I want to quickly recap the financial takeaways. Given the current significant investment in our respiratory franchise, we wanted to lay out the potential return we envisioned by the year 2027 for this franchise. Taking up where Arpa ended her earlier remarks.

We believe the market size for COVID, RCE and flu will be over $30 billion by 2027. And we expect to capture $8 to $15 billion in this marketplace.

While our cost of goods sold percentage will remain elevated in the short term as we transition from a pandemic to an endemic environment, we believe this should normalize to a 20 to 25 percent range by 2027. We also laid out a $6 to $8 billion cumulative R&D investment required over the next three years, which will then normalize to a routine maintenance amount of 10 percent respiratory vaccines revenue.

James M. Mock: We also laid out a $6 to $6 to $8 billion cumulative R&D investment required over the next three years, which will then normalize to a routine maintenance amount of 10% of respiratory vaccine revenue by 2027. Finally, we like the characteristics of the respiratory vaccine franchise, given the high

James M. Mock: given the highly flexible cost base

James M. Mock: low capital intensity, durable future revenue, and high potential return, which could lead to $49 billion in free cash flow annually with further room for growth. This concludes my remarks, and I will now turn the call back over to Dista Fondy.

Stephane Bancel: Thank you, Jamie, Arthur, and Steven. Let me share some thoughts before we close into QN. More than a promising commercial outlook as several development projects come to fruition. In COVID, we are finalizing discussions with customers, and I believe that we see significant additional contracts in the US, in Japan, and around the world for 1240. COVID is not going away, and governments are getting ready for a vaccination campaign in the fold.

Thank you, Jamie, Arpa and Steven. Let me share some thoughts before we close into Q&A.

Moderna is a promising commercial outlook as several development projects come to fruition. In COVID, we are finalizing discussions with customers and I believe that we see significant additional contracts in the US, in Japan and around the world for the fall of 2020.

Stephane Bancel: I'm pleased that we have begun pre-launch market development and at risk manufacturing for RSV, which we expect to launch in 24. And in oncology, the team is making great progress. We expect to deliver key milestones on the development pipeline in the remaining eight months of 2020. We expect regulatory authorities to give us direction on the COVID strain with a June VAT meeting, and we expect to launch an updated COVID-19 vaccine for fall of 2021.

COVID is not going away and governments are getting ready for vaccination campaigns in the fall. I'm pleased that we have begun pre-launch market development and at-risk manufacturing for RSV, which we expect to launch in 2014. And in Oncology, the team is making great progress. We expect to deliver key milestones in the development pipeline.

Stephane Bancel: We plan to file for approval for our vaccine, and of phase three or three, the true study should be fully enrolled by this summer, and we expect data in Q4. For R&C cancer therapy, we expect to make additional phase-up dates, Lone for phase-studymed melanoma and expanding into additional cancer types, and we'll continue to make progress, you know, where this portfolio, present data for Pierre on May 18th. This is a very exciting time for us at Moderna, and I would have to thank our teams for all the hard work and their commitment to our mission. Our platform is firing on all cylinders.

and a phase 3 or 3 flu study should be fully enrolled by December and we expect data in Q4.

For IMT cancer therapy, we expect to make additional Phase II updates.

Learn from phase 3 studies at UMass and expanding to additional cancer types. And we'll continue to make progress in our rare disease portfolio. We present data for Pierre on May 18th.

This is a very exciting time for us at Moderna and I would like to thank our teams for all their hard work and their commitment to our mission.

Stephane Bancel: In infectious diseases, look at the data in the portfolio of respiratory, latent, and now entering a bacterial vaccine. Very excited by where I&T is and is going, and Radiz with Pierre, followed closely by MMA and GSDWW.

Our platform is firing on all cylinders. Infectious is vaccine, look at the data and the portfolio of respiratory, latent, and now ensuring the bacterial vaccine.

Very excited by where INT is and is going. And where it is with PA, followed closely by MMA and GSD1A. We'll give some key updates this year. On September 13, we have an annual R&D there. We'll present new development pipeline data.

Stephane Bancel: We'll give some key updates this year on September 13. We have an annual R&D day. We will present new development pipeline data. And on December 7, we'll have our second annual ESG there.

Stephane Bancel: We believe that the incredible progress we have made across all of our modality positions our company for long-term financial success. But the mission of our company, what motivates our entire team to come to work every day, is to deliver the greatest possible impact on people through MR and medicine. We believe we have the technology to eliminate or greatly reduce human suffering caused by respiratory viruses, latent viruses, bacteria, cancer, ragenic disease, and a growing list of diseases.

and on December 7th we'll be hosting our second annual ESG Day.

We believe that the incredible progress we have made across all of our modality positions our company for long term financial success. But the mission of our company is to make the world a better place for all of us.

What motivates our entire team to come to work every day is to deliver the greatest possible impact to people through mRNA medicine.

We believe we have a technology to eliminate or greatly reduce human suffering caused by respiratory viruses, latent viruses, bacteria, cancer, regimen disease, and a growing list over the disease.

Stephane Bancel: We will work to bring a number of our most promising technologies to market in the next several years, and I propose to continue to fulfill our mission. With that, we take questions. Operator? Thank you, ladies and gentlemen. If you have a question.

We work to bring a number of our most promising technologies to market in the next several years, and I post to close it to fulfill our mission. With this, we'll take questions.

Operator: Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press Star 1-1 on your telephone. If your question has been answered, and you wish to move yourself from the queue, please press Star 1-1 again. We'll pause for a moment while we compile our Q&A, Ross. Our first question comes from Gina Wangwood, Barclays. Your line is open. Thank you.

Thank you ladies and gentlemen. If you have a question or comment at this time, please press star 11 on your telephone. If your question has been answered, you wish to move yourself from the queue, please press star 11 again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Gina Wang with Marklaser. Your line is open.

Gena Wang: Thank you. I have two quick questions. The first one is regarding the U.S. commercial opportunity in the second half of this year. You are in discussions with both, you know, the commercial government payers. Is 110 to 130 still a good benchmark; how does the pricing play out between these two groups? When will you start to see clarity on actual contracts and orders? My second quick question is regarding your expectation for an ASCO update for your PCV program.

Thank you. I have two quick questions. The first one is regarding the U.S. commercial opportunity in the second half this year. Your discussion with both the commercial and government ears is 110 to 130. Do a good benchmark. How's the pricing play out between these two groups?

when will you start to see clarity on actual contracts and orders? My second quick question is regarding your expectation for ASCO update for your PCV program.

Stephane Bancel: Great. So I will start with the first two questions on commercial and then hand over to Steven to discuss ASCO. In terms of pricing across the U.S. market, we do anticipate our list price when we have our updated vaccine to be in the range of 110 to 130. As you're aware, in the commercial market, we will be providing differentiated discounts across different types from government agencies through to commercial players as well.

Right, so I will start with the 1st, 2 questions on commercial and then hand it over to Steven to discuss ASCO in terms of pricing across the US market. We do anticipate our list price when we have our updated vaccine to be in the range of 110 to 130.

As you're aware in the commercial market, we will be providing differentiated discounts across different types from government agencies through to commercial players as well.

Stephane Bancel: In terms of the timing of the orders, we are actively in negotiations with U.S. customers. We are very encouraged on two fronts. First and foremost, our customers do appreciate and understand the significant health burden that continues to exist with COVID, and they do want to partner with us to make sure that as many of their patients can get vaccinated to protect themselves from potential hospitalizations and severe diseases. The other thing we continue to be very encouraged by in our conversations with different customers is that they are appreciating and recognizing the full real-world evidence behind SpikeVax and the effectiveness and profile of our vaccine. So we anticipate that over the next four to six weeks, we will begin to see some more clarity around contracting, which will continue through the end of Q2 and early. into Q3.

In terms of the timing of the orders, we are actively in negotiations with U.S. customers. We are very encouraged on two fronts. First and foremost, our customers do appreciate and understand the significant health burden that continues to exist with COVID. And they do want to partner with us to make sure that as many of their patients can get vaccinated to protect themselves.

from potential hospitalization and superior disease. The other thing we continue to be very encouraged by in our conversations with different customers is they are appreciating and recognizing the full real world evidence behind bike bags.

And the effectiveness and profile of our vaccine. So we anticipate over the next. 4 to 6 weeks we will begin to see some more clarity around contracting, which will continue through the end of Q2 and early into Q3.

Operator: Thank you one moment for our next question. So, Gina had a question about ASCO.

Thank you. One moment for our next question.

Stephen Hoge: So Gina had a question about ASCO. Oh, okay, sorry, Gina, what data we're presenting in Alaska, thank you. So, Steven, and I, as I said, there are two presentations, two sets of data that will be shared. The first will be focused on distant metastasis pre-survivable, DMFS. DMFS, as you know, is another surrogate of overall survival, and DMV, distant metastasis, usually, unfortunately, is visceral, and that's obviously, unfortunately, of greater concern.

So Gina, do you have any questions on Asco? Oh, okay, sorry. Gina, what data are presenting on Asco? Thank you. So, Steven, so as I said, there's two presentations. Two sets of data that will be shared. The first will be focused on the distant metastasis pre-survival, DMFS. DMFS, as you know,

Stephen Hoge: The protocol for the phase two study included in the first analysis, the primary analysis, looking both at RFS and distant metastasis-free survival. DMFS was a secondary implant, and we'll be presenting that data for the first time at ASCO. The second data that will be shared in poster form will be some data on biomarkers and additional data on the performance of I&T across populations. That is data that will get more into the basic science for those who are interested in it, but we'll look into the mechanism of action of the product, as well as further stratification of risk that we believe provides even more confidence that the signal we're seeing in terms of potential benefit for I&T in the phase two study is resilient and really bodes well for the future.

DMFS was a secondary endpoint, and we'll be presenting for the first time that data at ASCO. The second data that will be shared in poster form will be some data on biomarkers and additional data on the performance of INT across populations. That is data that will get more into the basic science for those who are interested in it, but we'll look into the next…

Operator: Thank you. One moment for our next question.

Salveen Richter: Our next question comes from Sal being Richard, with Goldman's actual line open.

for our next question.

Salveen Richter: Good morning, thanks for taking our questions. With regard to the PA data that we're going to see at ASGCT, could you just frame that for us? I think in the past you've talked about 25% being clinically meaningful as you look at it relative to the PAA data that we're going to see at ASGCT.

Our next question comes from Sal being Richter with Goldman Sachs, July to Zopen.

Good morning. Thanks for taking our questions with regard to the data that we're going to see at. Could you just frame that for us? I think in the past, you've talked about 25% being clinically meaningful as you look at. Relative risk reduction in major decomposition events here and

Salveen Richter: at relative risk reduction in major decomposition events here and what the translateability is from that to MMA and GSD1 and an OTC, your overall rare disease franchise. And then a second question for COGS: how are you thinking about beyond 2023, and in the context of your assumed market share of the respiratory franchise revenue as you look out to 2027, which you noted, how do you think about profitability in the context of this OPEC spend, including 10% of your R&D and SGNA Outlook? Thank you. Thank you for the questions.

what the translatability is from that to MMA and GSD1 and OTC, your overall rare disease franchise. And then a second question for COGS, how are you thinking about beyond 2023? And in the context of your assumed market share of the respiratory franchise revenue as you look out to 2027, which you noted, how do you think about profitability in the context of this OPEX spend, including kind of your R&D and SG&A outlook?

the translatability is from that to MMA and GSD1 and OTC, your overall rare disease franchise. And then a second question for COGS, how are you thinking about beyond 2023? And in the context of your assumed market share of the respiratory franchise revenue as you look out to 2027, which you noted, how do you think about profitability in the context of this OPEX spending, including kind of your R&D and SG&A outlook? Thank you.

from that to MMA and GSD1 and OTC, your overall rare disease franchise. And then a second question, for COGS, how are you thinking about beyond 2023? And in the context of your assumed market share of the respiratory franchise revenue as you look out to 2027, which you noted, how do you think about profitability in the context of this OPEX spend, including kind of your R&D and SG&A outlook? Thank you. Thank you.

Stephen Hoge: I'll take the rare disease portion of that on PA first. And so, as we shared last September, we did a data cutoff from the PA study last September after a couple of dose levels, and we were seeing a slightly more than 50% reduction in the rate of metabolic decompensations. These are the severe events that really, we believe, will ultimately be the end point that we're measuring for this drug in terms of benefit. And what we're going to be sharing at ASGCT is a further update on that. And so this will be a March data cutoff. It's about six more months.

Thank you for the question. So I'll take the rare disease portion of that on PA first. And so, as we shared last September , we did a data cut off from the PA study last September after a couple of dose levels. And we were seeing a slightly more than 50% reduction in the rate of metabolic decompensation. These are the severe events that really we believe will ultimately be the end point that we're measuring for this drug. In terms of benefit. And what we're going to be sharing at ASGCT is the further update to that. And so this will be a March data cut off. It's about six more months.

Stephen Hoge: And that will also include at least six months at the third dose level, 0.5 MPK, and some other emerging data at the next dose level. Again, I don't want to get ahead of sharing what that data is, but of course, we will be looking for the strength of that benefit. As we go up in dose, we would hope that we would improve from that 50% reduction in the rates of MDE, an approximately 50% reduction.

And that will also include at least six months at the third dose level 0.5 MPK and some other emerging data data at the next level. Again, I don't want to get ahead of sharing what that data is, but of course, we will be looking for the strength of that benefit as we go up and dose. We would hope that we would improve from that 50% reduction in the rates of MDS. Approximately 50% reduction in MDS. And we'd also want to obviously see that the

Stephen Hoge: and we'd also want to obviously see that the drug continues to be very well tolerated with no safety concerns in that patient population. We'll also see much more follow-up time in terms of total time on the drug across the entire study, which will help to build that case moving forward. Now, on the point of relationship to other programs, proprionic epidemia, PA, is a sister disease to methylmalonic acidemia, MMA.A.

the drug continues to be very well tolerated with no safety concerns in that patient population. We'll also see much more follow-up time in terms of total time on drug across the entire study, which will help to build that case moving forward. Now, on the point of relationship to other programs, Programic FEDEMIA PA is a sister disease to methylmolonic FEDEMIA MMA. And as we get more and more confident, hopefully, about the...

Stephen Hoge: And as we get more and more confident, hopefully, about the dose level at which we're expanding the PA program and the data we're seeing there, we do believe that reads through very directly into the data that we expect to see shortly in MMA. We have started to see some of that data from phase two, phase one to study in populations. I'll remind you that MMA is also chronically dosed in patients and escalated through dose levels.

The dose level in which we're expanding the PA program and the data we're seeing there, we do believe that reads through very directly into the data that we expect to see shortly in MMA. We have started to see some of that data from that phase 1, 2 study in populations. I'll remind you that MMA is also chronically dosing in patients and escalating through dose levels. And at the right moment, we will obviously want to provide an update on that.

Stephen Hoge: And at the right moment, we will obviously want to provide an update on that data as well in terms of MMA, but we do believe that the PA data range really positively through that. And generally, I'd say that's true for our liver metabolic rare disease programs, including OTC and the others that you recognize. And so maybe I'll take the Cox question.

data as well in terms of MMA, but we do believe that the PA data really positively through that. And generally, I'd say that's true for our liver metabolic rare disease programs, including OTC and the others that you referenced. And Shafi, maybe I'll take the Cox question. So to reiterate, this year is 35 to 40% of sales. And as you mentioned, we'll go to 20 to 25% by 2027. So

James M. Mock: So to reiterate, this year is 35 to 40% of sales, and as you mentioned, we'll go to 20 to 25% by 2027. So I'm not sure it's a perfectly straight line, but let me just give you the factors that will improve that over time. First, volume, so increasing volume over time as we add new products to our overall manufacturing footprint should give us better leverage. I think predictability helps that. So this is a highly unknown season this year.

I'm not sure it's a perfectly straight line, but let me just give you the factors that will improve that over time. First is volume. So increasing volume over time is we have new products. Our overall manufacturing footprint should give us better leverage. I think predictability helps that. So this is a highly unknown seed in this year. It'll be the first time we're transitioning to an endemic, so that'll become more predictable over time. ASP I think will continue to go up as well. What might offset that a little bit is a greater single dose file or a PFAS presentation over time.

James M. Mock: It'll be the first time we're transitioning to an endemic, so that'll become more predictable over time. ASP, I think, will continue to go up as well. What might offset that a little bit is a greater single-dose file or PFS presentation over time, and we've got some of that budgeted for 2023. So overall, we feel confident in converting our... inventory levels down and overall decreasing our cost as a percent of sales. As it relates to the 2027 P&L, and what that means for overall company profitability, we have an issue. Any guidance on that, I would say to reiterate for those that heard my prepared remarks, the respiratory vaccine business should generate $4 to $9 billion, which we laid out on a page there. And then we'll just have to see, to be honest. We've got to have an exciting pipeline, and we'll have to understand what's happening with I&T. We're quite excited by that. Rare diseases, and latent diseases as well.

generate $4 to $9 billion, which we laid out on a page there. And then we'll just have to see, to be honest. We've got an exciting pipeline. We'll have to understand what's happening with INT. We're quite excited by that. Rare diseases, latent diseases as well. And we'll do what's best for all of our stakeholders.

James M. Mock: And we'll do what's best for all of our stakeholders. So if it makes sense to continue to reinvest some of those profits back into the business, we'll do that.

Operator: Thank you one moment for our next question.

Tyler Van Buren: Our next question comes from Tyler Van Buren with Cowan. Your line is open.

Tara A. Bancroft: Hi guys, this is Tara on for Tyler.

Tara A. Bancroft: So I know you mentioned a little bit about timing, but specifically, what we're wondering is once the COVID strain is selected for the fall and winter season next month, how long approximately do you think it will take to finalize the commercial contracts in the U.S. and abroad? separately outside of the U.S. Does the recent announcement regarding the ongoing negotiations with Pfizer and Europe actually create an opportunity for you guys to perhaps strike a larger contract in Europe than previously anticipated?

with Cowan, your line is open. Hi guys, this is Tara on for Tire. So I know you mentioned a little bit about timing, but.

Specifically, what we're wondering is once the COVID strain is selected for the fall and winter season next month, how long approximately do you think it will take to finalize the commercial contracts in the U.S. and abroad? And then... Umm...

separately outside of the U.S. Does the recent announcement regarding the ongoing negotiation with Pfizer and Europe actually create an opportunity for you guys to perhaps strike a larger contract in Europe than previously anticipated?

Arpa Garay: Thank you for the question. Your first question concerns the timing of contracting in the U.S.

Arpa Garay: While we are waiting for the final variant strain to be selected in the middle of June, we have already initiated contracting conversations based on an FDA-selected variant. So, as I mentioned previously, we do anticipate seeing some of these contracts being signed over the next several weeks leading into the third quarter. So it will be sort of an evolving timeline based on the next. on the customer.

Thank you for the question. Your first question around timing of contracting in the U.S. While we are waiting for the final variant strain to be selected in the middle of June , we have already initiated contracting conversations based on an FDA-selected variant. So, as I mentioned previously, we do anticipate seeing some of these contracts being signed over the next...

Arpa Garay: From an EU perspective, we're encouraged by the news that the EU is in negotiations with Pfizer. For us, this signals that the EU likely does not want to rely on one sole supplier. And we are also encouraged that the EU does recognize the value of the effectiveness and safety of our COVID-19 vaccine. So we continue to work with them to see how we can help protect the 140 million people in the EU who are at high risk of COVID infection. And as we get updates on EU negotiations, we will be sharing those as well. Thank you.

want to rely on one-souls supplier. And we also are encouraged that the EU does recognize the value of the effectiveness and safety of our COVID-19 vaccine.

So we continue to work with them to see how we can help protect the 140 million people or so in the EU who are at high risk of COVID infection. And as we get updates on EU negotiations, we will be sharing those as well.

Arpa Garay: One one one before our next question. Our next question comes from Michael Ye with Jeffrey. Your line is over. Hey guys, good morning.

Thank you. We'll move on to the next question.

Our next question comes from Michael Yee with Jeff Rees, your line is open.

Michael Yee: Thanks for the questions; two areas I wanted to ask about PCV or, shall I say, I and T cancer therapy. Stephen, you've talked and mentioned there in the slides around prime as well as breakthrough designation, and I think you mentioned that you do have a discussion with FDA around your recent data. Can you just talk about the scenarios around a potential accelerated approval, the argument that you have to bring this to patients sooner, or do we really have to wait years to run phase three? Talk a little bit about how you feel about that this year.

Hey guys, good morning. Thanks for the questions. Two areas I wanted to ask on PC viewers, LSA, I&T Cancer Therapy. This, Steven, you've talked and mentioned there in the slides around crime as well as break the designation. And I think you mentioned that you do have a...

Discussion with FDA around your recent data. Can you just talk to the scenarios around a potential accelerated approval? The argument that you have to bring this to patients sooner, or do we really have to wait years to run the phase 3 talk a little bit about how you feel about that this year. And then the 2nd question I think is also important with regards to RSV.

Michael Yee: And then the second question, I think, is also important with regard to RSV. Obviously, we'd love to see a diversification of revenues. This could be coming next year. How do you see your revenue opportunity in 2024? As I'm in a payer battle, there are a couple of competitors out there, but what is your advantage, and how do you see yourself with market share and revenues next year? Thank you. Great. Thank you, Mike, for the question. I'll take the I and T one.

Obviously, we'd love to see a diversification of revenues. This could be coming next year. How do you see your revenue opportunity in 2024? Is that a payer battle? There are a couple of competitors out there. Where is your advantage and how do you see yourself with market share and revenues next year? And thanks for funding.

Stephen Hoge: So, look, I think it's obviously still early in this discussion about what it will take to bring this medicine forward to patients. And even in the phase two study, you know, while the data is really exciting, it's probably premature to say that it's sufficient at this point to proceed directly to accelerate approval. But there are conditions we think over the next couple years that could lead to that being an appropriate thing for us and regulators to consider. In the short term, look, the data is still maturing. We still haven't published the disin metastasase-free survival data, but we're going to be doing that at ASCO.

Thank you, Mike, for the question. I'll take the INT one. Look, I think it's obviously still early in this discussion about what it will take to bring this medicine forward to patients. Even in the phase two study, while the data is really exciting, it's probably premature.

to say, you know, that it's sufficient for, at this point, for proceeding directly to accelerate approval. But there are conditions, we think, over the next couple years that could lead to that being an appropriate thing for us and regulators to consider. In the short term, look, the data is still mature.

Stephen Hoge: We're obviously excited to share that data, and it starts to just build that more complete picture. And DMFS, because it looks at visceral lesions, does start to look towards perhaps some of those more severe relapses that are happening. We have additional biomarker data that's coming through in that ASCO presentation as well, and both of those data sets are dealing with the initial analysis, which was 40 events. I'll remind you, we have an analysis at 51 events, which we think will be when these curves are substantially more mature. And obviously, we haven't crossed that yet.

We still haven't put out the distant metastasis free survival data. We're going to be doing that at ASCO. We're obviously excited to share that data and it starts to just build that more complete picture and DMFS because it looks at visceral lesions does start to look towards perhaps some of those more the severity of those relapses that are happening. We have additional biomarker data that's coming through in that ASCO presentation as well.

Stephen Hoge: And when we do trigger that 51 event analysis, we will update the RFS curves. We'll update the DMFS curves. We'll obviously look at statistics around that. And it will be a point in time for us to understand, let's say, with more than two and a half, maybe three and a half years of follow-up in total median follow-up on that study. What do the overall curves look like?

we will update the RFS curves, we'll update the DMFS curves. Well, obviously look at statistics around that. And it will be a point in time for us to understand, let's say, with more than two and a half, maybe three and a half years of follow-up in total median follow-up on that study, what do the overall curves look like? What are the hazard ratios? What do the statistics look around that? And then what more have we learned about the MOA from all of the ongoing biomarker work?

Stephen Hoge: What are the hazard ratios? What are the statistics around that? And then what more have we learned about the MOA from all of the ongoing biomarker work that we've done? So that richer data set, I think, is really what we are waiting for. There's a second piece of this, too, though, which is that any consideration of an accelerator approval, whether it's for INT or just more generically, is increasingly going to depend upon whether or not you have initiated the confirmatory studies.

Stephen Hoge: And that's appropriate because we've all seen how initiating substantially enrolling the confirmatory studies actually helps make sure that that answer comes quickly and that the accelerator approval can either be converted to a full approval or be adjusted as a result of those confirmatory results. And we're very attuned to that.

because we've all seen how initiating substantially enrolling the confirmatory studies actually helps make sure that that answer comes quickly and that accelerated approval can either be converted to a full approval or be adjusted as a result of those confirmatory results. And we're very attuned to that. And so our primary focus right now, while we're waiting for the data to mature from the Phase II, is to make sure that we stand up that Phase III study and enroll it as fast as possible.

Stephen Hoge: And so our primary focus right now, while we're waiting for the the data to mature from the phase two is to make sure that we stand up that phase three study and enroll it as fast as possible. I think the conditions under which we might consider, you know, in partnership and discussion with regulators pursuing accelerated approval, would really be at some point in the future when that phase three study is well on the path towards being enrolled, obviously not read read out yet, but well on the path towards being enrolled, and where a lot of the other data I had described had matured and continued to show a really compelling face for the potential best benefit here, perhaps even in patient populations.

I think the conditions under which we might consider, you know, in partnership and discussion with regulators pursuing an accelerated approval would really be at some point in the future when that Phase III study is well on the path towards being enrolled, obviously not read out yet, but well on the path toward being enrolled, and where a lot of the other data I had described had matured.

Stephen Hoge: They're at higher risk from a restratification perspective, as we were sharing some of the data today, and those that complement the factors would trigger an opportunity to say, it's time to bring this medicine to patients in an accelerated way while waiting for the confirmatory and study to read out. It's still premature. All of those things still have to happen. So that's why right now, our focus is to get that phase three started, get it enrolled, and continue to follow this really intriguing story in the randomized phase two study.

time to bring this medicine to patients in the accelerated way while waiting for the confirmed stress readout. Still premature, all of those things don't have to happen. So that's why right now our focus is get that phase three started, get it enrolled, and continue to follow this really intriguing story in the randomized phase two study. Very great. Not in a sense).

Stephen Hoge: Very good

Arpa Garay: And I can take the RSV question. We continue to be very excited about our opportunity to increase the RSV. The profile of our vaccine, as we look at the phase three data for tolerability as well as effectiveness, positions us at the high end of the competitive landscape. From a safety perspective, to date, we have not seen any neuro adverse events, and our serious adverse events were balanced in both arms as well.

And I can take the R and V question. We continue to be very excited about our opportunity to be. The profile of our vaccine as we look at the phase 3 data for our ability as well as effectiveness position us at the high end of the competitive landscape from a safety perspective to date. We have not seen any neuro adverse events and our.

Arpa Garay: What this means for 2024 is that as we look at R&VRRFARMS, and our serious events were balanced in both arms as well. It is more of a seasonal business. We do anticipate that negotiations will be happening every year in the United States, repairs will have an opportunity to continue to review the data across multiple players, and we will be working actively to position ourselves in the U.S. commercial Thank you. One more before.

serious adverse events were balanced in both arms as well. What this means for 2024 is as we look at RNC and more of a seasonal business, we do anticipate that negotiations will be happening every year in the United States. Their payers will have an opportunity to continue to review the data across multiple fires and we will be working actively to position ourselves in the US commercial market.

Arpa Garay: Thank you. Please take a moment for our next question.

Operator: Our next question comes from Terence Flynn with Morgan Stanley. Your line is all right. Great.

Thank you. One moment for our next question. Our next question comes from Terrence Flynn with Morgan Stanley . Your line is open.

Terence Flynn: Thanks so much for taking the question. I was just wondering about I&T if you could comment at all about the design of the phase three and lung there. And then just what's driving that confidence to move forward at this point? Can you just remind us of any data you have at this point on that front? Thanks so much.

Thanks so much for taking the question. I was just wondering on INT if you can comment at all about the design of the Phase III and Long there and then just what's driving that confidence to move forward at this point. Can you just remind us of any data you have at this point on that front? Thanks so much.

Stephen Hoge: Yeah, so there are a couple of things. So first, we did look in phase one at non-small cell lung cancers. There were patients in that, those were not adjuvant patients, but nonetheless, we do have some data, biomarker data, and other clinical histories, again, not from a controlled study in phase one. I think the other piece of confidence is the strength of the mechanism of action that we're seeing and the translation across risk strata in the phase two study that we've already run.

Yeah, so it's a couple of things. So first, we did look into phase one at non-small cell lung cancers. There were patients in that. Those were not adjuvant patients, but nonetheless, we do have some data, biomarker data, and other clinical histories, again, not from a controlled study, in the phase one. I think the other piece of confidence is the strength of the mechanism of action that we're seeing.

Stephen Hoge: Really, we think sets. up well as you look at adjuvant indications more broadly and that's where adjuvant non-small cell lung cancer or even neo-adjuvant non-small cell lung cancer make a lot of sense from a translatability perspective and so it's a combination of a little bit of data from that phase one the breadth and strength of performance we're seeing in the phase two for melanoma and obviously what's been learned with PD1 PD1 therapy in adjuvant settings more broadly, Thank you, one moment for our next question.

And so it's a combination of a little bit of data from that phase one, the breadth and strength of performance we're seeing in the phase two for melanoma, and obviously what's been learned with PD-1, PD-L1 therapy in adjuvant settings more broadly.

Stephen Hoge: Our next question comes from Jessica Fott with Jafi Morgan. You're

Thank you one moment for our next question. Our next question comes from Jessica. I would say if you were working, the light is open. Thank you.

Jessica Fye: Great, good morning, guys. Thanks for taking my question. A couple follow-ups on some of the questions that have been asked already. First, on the U.S. COVID contracts for the fall, should we expect updates as those are finalized in real time, or more like a combined status report, for example, with two key results early in the third quarter? Second, with the shift to an endemic phase for COVID, do you see any opportunity for an improved price for COVID vaccines outside the U.S., for example, in Europe? And lastly, on RSV, how soon do you believe RSV needs to be approved for you to participate in Congress?

Good morning, guys. Thanks for taking my question. A couple follow-ups on some of the questions that have been asked already. First, on the U.S. COVID contracts for the fall, should we expect updates as those are finalized in real time or more like a combined sort of status report, for example, with 2Q results early on in the third quarter?

Second, with the shift to an endemic phase for COVID, do you see any opportunity for improved price for COVID vaccines outside the U.S., for example, in Europe ? And lastly, on RSV, how soon do you believe RSV needs to be approved for you to participate in contracting for 2024?

Jessica Fye: RSV needs to be approved for you to participate in contracting for 2024. Thank you.

Thank you. Thank you. In terms of your first question on providing updates for U.S. commercial contracts, we are not currently committing to real-time updates per contract, but at a minimum, we will be providing updates at our quarterly calls in terms of where we are.

Arpa Garay: In terms of your first question on providing updates for U.S. commercial contracts, we are not currently committing to real-time updates per contract, but at a minimum, we will be providing updates at our quarterly calls in terms of where we are with U.S. commercial contracts. The second question around XUS pricing: we do not comment on our pricing, but what I can tell you is that for the majority of countries outside the U.S., we are still primarily in a centralized government procurement model.

Arpa Garay: So we have not set endemic or more traditional commercial pricing yet for most of the markets outside of the U.S. And the last question, I believe, is on RSEV contracting. We are targeting a 2024 launch for RSV. We continue to work through the details of the contracting for the U.S. market, in particular. But assuming a 2020 launch per our current assumptions, we do believe we will be in time for contracting to launch in 2024 on the U.S. market. Thank you. Thank you.

or more traditional commercial pricing yet for most of the markets out of the U.S. And the last question I believe was on RSV contracting. We are targeting a 2024 launch for RSV. We continue to work through the details of the contracting for the U.S. market in particular. But assuming a 2024 launch per our current assumptions, we will continue to work through the details of the contracting for the U.S. We continue to work through the details of the contracting for the U.S. We continue to work through the details of the contracting for the U.S.

Operator: Thank you. Thank you. Please allow one moment for our next question.

We do believe we will be in time for contracting to launch in 2024 in the US market. Thank you. Thank you one moment for our next question.

Ellie Merle: Our next question comes from Ellie Merle with UBS. Your line is open. Thanks so much for taking the question.

Our next question comes from Ellie Murrell with UBS. Your line is open.

Ellie Merle: Hey guys, thanks so much for taking the time to answer the question. Maybe you could just elaborate a little bit on your confidence in the updated formulation targeting the B strains of influenza. And if you can comment on the dose level, if this is studying a higher absolute dose, and just maybe just in terms of this compound, but also just broader in terms of the flu platform as you add additional antigens, just your thoughts on reactogenicity here and then, you know, with the additional valency of these comments. And then second, just in RSV, just a bit of housekeeping, I guess. Do you still plan to file this quarter?

Hey guys, thanks so much for taking the question. Maybe if you could just elaborate a little bit on your competence in the updated formulation targeting the B-strands in influenza. And if you can comment on the dose level, if this is studying a higher absolute dose, and just maybe just in terms of this.

compound but also just broader in terms of the flu platform as you add additional antigen, just for thoughts on reactive ethnicity here and then broadly, you know, with the additional valency of these compounds. And then second, just in RSV, just a bit of housekeeping, I guess, do you still plan to file this quarter? Thanks.

Stephen Hoge: Yeah, thank you for both those. So first on the flu question. So we obviously have the immunogenicity data that already came out of the P-302 study that shows that we've met non-inferiority, or would have been considered with non-affirmity for the B strains, even in the Northern Hemisphere study that's ongoing. And so I think our confidence of being able to clear that bar is high and supported by that data, even before we make the improvements in the B-strain. Update for the current phase three study.

Yeah, thank you for both of those. So first on the flu question, so we obviously have the immunogenicity data that already came out of the P302 study that showed that we've met non-imferiority or would have been considered with non-imferiority for the B strains.

even in the northern hemisphere study that's ongoing. And so I think our confidence of being able to clear that bar is high and supported by that data, even before we made the improvements in the B strain update for the current phase three study. We obviously have a preclinical data. We have a lot of experience with updating our antigens and vaccines now with COVID and others. And so we'll look forward to that data in future.

Stephen Hoge: We obviously have pre-clinical data, and we have a lot of experience with updating our antigens and vaccines now with COVID and others. And so we'll look forward to that data in P-303, but I think we will, believe we will do even better than we did in the P-302 study with non-inferiority, and we hope to see that we'll be achieving something perhaps trending towards superiority, but that's not the goal specifically for the study.

Stephen Hoge: In terms of reactogenicity and dose, I'll just say that we are not changing the dose for this 1010 P-30 study. It's still 50 micrograms, so it's not a change in dose level. And in general, as we think about reactogenicity across our respiratory pipeline, we have a large number of candidates and vaccines where we've gone to doses substantially higher than 50 micrograms. Even in the flu study, we did that up to 100 micrograms in data we shared before.

so it's not a change in dose level. And in general, as we think about reactogenicity across our respiratory pipeline, we have a large number of candidates and vaccines where we've gone to doses substantially higher than 50 microns. Even in the flu study, we did that up to 100 microns of data we shared before. And we believe that there are populations for whom that works well. And in fact, there are vaccines like our RSV vaccines.

Stephen Hoge: And we believe that there are populations for whom that works well. In fact, there are vaccines, like our RSV vaccine, where 50 micrograms is extremely well-tolerated. We were very pleased by that profile to date, and so we actually think it's going to be a vaccine-by-faxine case. You can't look at the dose and decide. And as we start going into combinations, we will be optimizing the reactogenicity, the tolerability profile of that vaccine against the benefits in terms of high efficacy that we hope to deliver and often measured by immune responses in those combinations. Studies.

Stephen Hoge: So we currently don't believe that there's a limit to that, but in this specific P-303 study, we're continuing down a 50 microemdose level for 10-10. Now on the RSV, yes, we are working closely with regulators on filing globally, and that includes all of the markets in which we hope to commercialize that product and launch it next year. And, of course, we'll keep your praise as we move into that regulatory process in our normal quarterly process.

against the benefits in terms of high efficacy that we hope to deliver and often measured by immune responses in those combination studies. So we currently don't believe that there's a limit on that, but as in this specific P3SRI study, we're continuing down a 50 microMTOS level for 10-10. Now on the RSV, yes, we are working close to with regulators on...

Stephen Hoge: One move for our next question.

Luca Issi: Our next question comes from a look at Issy with RBC. Your line is open.

One moment for our next question.

Luca Issi: Oh, great. Thanks so much to take my question.

Our next question comes from Maluka Issey with RBC. Your line is open. Your line is open.

Luca Issi: IMP, I think you've been highlighting the opportunity adjuvant and the new adjuvant settings. However, I was wondering if you could comment on what the plan is for the metastatic settings, is there a place for I&T in the metastatic settings that may be related to it, or are you planning to update them?

Great. Thanks so much for taking my question. Maybe on IMT, I think you've been highlighting the opportunity adjuvant and neo-adjuvant settings. However, I'm wondering if you can comment on what's the plan in the metastatic settings. Is there a place for IMT in the metastatic settings that may be related to it? Are you planning to update the metastatic head and neck cancer data set that we have seen at CC 2021? Any call there, I'd much appreciate it. Thanks so much. Thank you.

Luca Issi: The better static had the neck cancer data set that we have seen at 60s,

Luca Issi: 2020. Any call there will be much appreciated. Thanks so much.

Luca Issi: Any call there? I would much appreciate it. Thanks so much.

Stephen Hoge: Great, thank you for this question. So I think we do think that I and T can go both earlier and later in terms of its use, and it's a challenging question about which one we prioritize in the short term. I think there's a huge opportunity we perceive, we believe, in Adjuvant. That is where you hear all of our current activity; that's our focus.

Great, thank you for this question. So I think we do think that INT can go both earlier and later in terms of its use. And it's a challenging question about which one do we prioritize in the short term. I think there's a huge opportunity we perceive, we believe, in adjuvant. That is where you hear all of our current activities. That's our focus. We're trying to move into pivotal studies very, very quickly.

Stephen Hoge: That's where we're trying to move into pivotal studies, very, very quickly, phase three studies. But if you look at Adjuvant, we do have adjuvant experience. You pointed to the head-neck data.

Stephen Hoge: We also have, you know, from our phase one, some adjuvant melanoma. There's actually some adjuvant, sorry, metastatic melanoma, metastatic non-small lung cancer. And I think those are situations where we think the burden of the tumor, the size of that tumor, is a little bit of a barrier to the potential active activity of any immune therapy. In fact, generally, immune therapies have struggled in later stage disease, and where the real power of the technology is safety-tolerable.

where we think the burden of the tumor, the size of that tumor, is a little bit of a barrier to the potential activity of any immune therapy. In fact, generally, immune therapies have struggled in later stage disease, and where the real power of the technology, its safety, tolerability profile, potential benefit probably is upstream.

Stephen Hoge: profile potential benefit probably is upstream. So while we are following closely in the metastatic space, and we did see some intriguing signs in the metastatic head and neck study that you referenced, we are right now waiting for a little more data to decide whether or not we want to go into those metastatic settings in the short term with our partner, Merck, of course. The other area that I referenced is the earlier stage, and so, you know, stage 3A, stage two, disease, where.

So while we are following closely the metastatic space and we did see some intriguing signs in the metastatic head and neck study that you referenced. We are right now waiting for a little more data to decide whether or not we want to go into those metastatic settings in the short term with our partner, of course. The other area that I referenced is the earlier stage. Stage 3A, Stage 2 disease, disease where immunotherapies are not traditionally...

Stephen Hoge: Immunotherapies are not traditionally used right now, but we believe a well-tolerated approach like INT, which does provide a boost of specific T-cell responses against the cancer, might have a unique benefit. And again, that's a place that we're eager to explore the I&T approach with our partner, Merck, in the very near term. We don't have, at the present, as substantial an effort going into those two areas, but we could pivot very quickly.

Stephen Hoge: So for now, what we're focusing on is the pivotal studies in adjuvant. We're watching very closely the evolution of our data in metastatic, and we're trying to think about how we could move, whether biomarker enabled or otherwise, into earlier-stage diseases. I'm sure we will find ways to explore all of those areas if there's a potential benefit for I&T in them. It's just now a matter of working out the opportunities as fast as we can.

two areas, but we could pivot very quickly. So for now what we're focusing on is the pivotal studies in adjuvant. We're watching very closely the evolution of our data in metastatic and we're trying to think about how we could move whether biomarkerally enabled or otherwise into earlier stage diseases. I'm sure we will find ways to explore all of those areas if there's a potential for benefit for INT in them. It's just now a matter of working down the opportunities.

Stephen Hoge: Fantastic. Maybe if you can follow up, which is the earliest that you can have the COVID plus flu combo potential on the market? Thanks.

as fast as we can. Fantastic, and maybe if I can follow up, when is the earliest that you can have the COVID plus flu combo potential in the market? Thanks so much.

we can. Fantastic. And maybe if I can follow up, what is the earliest that you can have the COVID plus flu combo potential in the market? Thanks so much.

Geoffrey Christopher Meacham: potential of the market. Thanks so much. So I'll comment on our program very quickly, but the combination vaccines, so the first point is we want to get, need to get the flu approved. I think on Vaccine Day, we talked about our expectations, our hope, to have the COVID flu combo approved and launched in 2025. Got it. One moment for our next question.

I'll I'll comment for for our very quickly, but the combination vaccine. So the 1st point is we want to get need to get the flu approved. I think in that vaccine's day, we talked about our, our expectations. Our hope are to have the flu combo approved and launched in 2025.

I'll I'll comment for very quickly, but the combination vaccines. So the 1st point is we want to get need to get the flu approved. I think in that vaccine today, we talked about our, our expectations. Our hope are to have the flu combo approved and launched in 2025. Thanks so much.

Alexandria Hammond: Our next question comes from Jeff Meacham with Bia. Your line is open.

One moment for our next question. Our next question comes from Jeff Meacham with B of A. Your line is open. Hi, this is Alex Hinnan for Jeff Meacham. Thank you for taking our question. So, given the breadth of your clinical pipeline and the potential opportunities for new vaccines, how does Moderna prioritize assets or indications to go after? And once Moderna has, let's say, proof of concept for its Lyme disease, what is the clinical strategy in terms of targeting additional bacterial indications?

Alexandria Hammond: Hi, this is Alex Hammond on behalf of Jeff Meach. Thank you.

Alexandria Hammond: for taking our question. So, given the breath of your clinical

Alexandria Hammond: With your clinical pipeline and the potential opportunities for new vaccines, how does Moderna prioritize assets or indications to go after? And once Deter has, let's say, proof of concept for its Lyme disease, what is its clinical strategy in terms of targeting additional bacterial indications? And then, just finally, how are you thinking about

Alexandria Hammond: And then, just finally, how are you thinking about capital deployment for the I&T program? Thank you.

Stephen Hoge: I'll take the first question, well, I'll take all three, I think, but I invite my colleagues to come in. So, first, what do we think about opportunities? It's a great challenge we have. You know, we're obviously seeing a very high success rate as we transition into patient populations or pivotal studies across our pipeline. And the short version of it is that we look for places where we think our technology, through its modalities, is well validated.

populations or pivotal studies across our pipeline. And the short version of it is we look for places where we think our technology through its modalities is well validated and so we have a high, hopefully differentiated probability success in that next indication and where there is a large unmet need in that indication. If there's a large unmet need medically, there is usually a large unmet need financially in terms of healthcare systems and that's ultimately the kind of

Stephen Hoge: And so we have a high, hopefully differentiated, probably differentiated, indication in that next indication where there is a large unmet need in that indication. If there's a large unmet need medically, there is usually a large unmet need financially in terms of health care systems, and that's ultimately the kind of value we want to deliver anyway. So that's how we approach it.

Stephen Hoge: That can be infectious diseases. That's how we think about expanding our respiratory franchise. That's how we're thinking about expanding our latent franchise as we establish POC there. And what you're going to be seeing us do in rare diseases, as we are already doing, is that same sort of expansion as we start to start to start to start. see proof of concept in the rare metabolic disease space. And then, of course, you asked the question about I&T.

Stephen Hoge: And maybe I'll just, you know, jump to the third part of your question, which is how do we think about capital allocation in terms of I&T? There are very few things that have a larger burden of disease, of social costs, of financial costs, of obviously morbidity, and mortality than cancer.

the question about INT. And maybe I'll just, you know, jump to the third part of your question, which is how do we think about capital allocation in terms of INT. There are very few things that have a larger burden of disease, of social costs, of financial costs, of obviously morbidity and mortality than cancer.