Moderna, Inc Q2 2023 Earnings Conference Call Insights

Key highlights from Moderna, Inc (MRNA) Q2 2023 Earnings Concall

Management Update:

• [00:16:30] MRNA’s COVID sales expectations for 2023 are in the range of $6-8 billion, with the key variable being vaccination rates in the United States.

• [00:19:29] MRNA is continuing to prepare for potential 2024 launch of its RSV vaccine and is excited about the opportunity in front of the company.

• [00:28:51] The company anticipates multiple product launches across its vaccine and therapeutic portfolio in the next three years, from 2024 to 2026.

Q&A Highlights:

• [00:30:38] Salveen Richter of Goldman Sachs asked what factors could impact additional sales range for 2H deliveries, and will contracts be pushed to 2024. Arpa Garay CCO said the key factor in reaching the higher end of the $6-8 billion sales range is the vaccination rate in the US. MRNA is confident in its market share and progress with commercial contracts in the US. Outside of the US, MRNA confirmed deliveries for 2H23 with all countries except for the $1 billion that was pushed into 2024.

• [00:32:13] Tyler Van Buren at TD Cowen enquired how the $6-8 billion expected COVID-19 vaccine sales for the year in terms of real demand for the eventual COVID-19 vaccine franchise tail be interpreted. Arpa Garay CCO replied that MRNA expects $4-6 billion in COVID-19 vaccine sales in 2024. A portion of this volume is not expected to be recurring, but the remainder is expected to remain and eventually increase as COVID vaccination rates trend towards flu vaccination rates.

• [00:34:16] Gina Wang with Barclays asked if there are any definitive initial stocking orders for the COVID-US commercial contract, and what are the learnings from Pfizer and GSK’s RSV vaccine launch for Moderna’s approval and launch prep. Arpa Garay CCO said that MRNA has minimum volume commitments in most of its commercial contracts for COVID-19 vaccines. The RSV vaccine is expected to have a more gradual uptake due to the ACIP recommendation for a shared clinical decision making. However, more data from clinical trials could lead to an updated recommendation and a broader uptake of the RSV vaccines.

• [00:36:17] Dina at Jefferies asked about any updates on the timeline for the efficacy study from the second infection, and will MRNA share those updates in 3Q. Stephen Hoge President said MRNA has two ongoing Phase III flu vaccine studies, one efficacy study and one immunogenicity study. The company will be providing updates on both studies this quarter, including an end-of-season update on the efficacy study.

• [00:38:26] Sera with UBS asked for more color on expectations for COVID-19 vaccine sales in the first half of 2023 and 2024? Arpa Garay CCO said MRNA expects the majority of its COVID-19 vaccine sales to come in 2H23, as the northern hemisphere enters its fall vaccine campaign. However, the company also expects some sales in the first half of the year from the southern hemisphere and from spring booster campaigns in high-risk populations.

• [00:38:45] Sera with UBS also asked about the expectations for the timeline of enrollment and data readout for the CMV vaccine, and are there any preliminary insights on the event rate based on blinded data? Stephen Hoge President replied that MRNA has made significant progress in CMV enrollment, surpassing 80%, and expect to complete enrollment soon. With full enrollment, MRNA will begin accumulating cases and conducting an event-driven interim analysis of efficacy. The exact timing cannot be predicted.

• [00:41:03] Luke at RBC Capital asked about the reasons behind the change in gross margin from the prior guidance of 60-65% to the current midpoint of 47%. James Mock CFO replied that MRNA’s previous guidance for margins was 60-65%, but it’s now expecting 47% due to volume-related factors, including the pushout of $1 billion in revenue to 2024. This shift is driven by changes in product mix and market conditions.

• [00:43:00] Edward Tenthoff of Piper Sandler enquired about MRNAs plan for combining COVID-19, flu, and RSV vaccines from a regulatory and commercial standpoint. Stephen Hoge President said MRNA plans to complete the work to move towards approval of the three monovalent vaccines, then quickly progress into the pivotal Phase IIIs for at least one and multiple combos. The goal is to launch those in 2025 and beyond.

• [00:47:25] Alice with Bank of America enquired about the potential indications for the I&T vaccine and how will MRNA decide which to pursue first. Stephen Hoge President clarified that MRNA is moving forward with its I&T vaccine in melanoma and non-small cell lung cancer. The company is also considering other indications where PD-1 antibodies have been successful, but where there is still room for improvement. Moderna plans to start these studies in short order.

• [00:47:45] Alice with Bank of America also asked what commercial hurdle MRNA expect for flu and RSV given competition and new entrants. Arpa Garay CCO said that MRNA is confident in its RSV vaccine, which is the third to be launched in the market. The company is also optimistic about its flu vaccine 1010, which could give MRNA an opportunity for better strain matching in the future. The company sees good interest in combination vaccines, both from patients and healthcare systems.