Moderna at Bernstein Conference: Strategic Diversification Plans

On Thursday, 29 May 2025, Moderna Inc. (NASDAQ:MRNA) presented at the Bernstein 41st Annual Strategic Decisions Conference 2025. The discussion, led by CEO Stephane Bancel, highlighted Moderna’s efforts to diversify beyond COVID-19 vaccines, aiming to expand into areas like RSV, cancer, and rare diseases. The company is also focusing on cost reduction and navigating regulatory changes, while expressing optimism about the future market for high-risk COVID-19 vaccinations.

Key Takeaways

• Moderna aims to cut cash costs from $9 billion to $4 billion by 2027.
• Revenue guidance for 2025 is set between $1.5 billion and $2.5 billion.
• The company is expanding its product portfolio to include RSV and cancer treatments.
• AI integration is being pursued to enhance productivity and innovation.
• Moderna is optimistic about the potential of its flu-COVID combo vaccine.

Financial Results

• Cost Reduction:

- Achieved a 20% cost reduction in Q1 2025 compared to Q1 2024.

- Targeting $4 billion in cash costs by 2027.

• Revenue Guidance:

- Projected revenue for 2025 is between $1.5 billion and $2.5 billion.

- Guidance does not account for revenue from new product launches.

• Cash Position:

- Moderna holds $8.5 billion in cash.

Operational Updates

• Product Portfolio Diversification:

- Expanding into RSV, cancer, rare diseases, and autoimmune diseases.

- Plans to launch up to 10 new products in the coming years.

• COVID and RSV Sales:

- Focusing on stabilizing and growing the COVID and RSV vaccine markets.

- Emphasizing pharmacy channels to boost booster uptake.

• Manufacturing and Supply Chain:

- U.S. drug substance manufactured domestically.

- Exploring year-round infrastructure use with non-seasonal products like CMV and norovirus.

• Flu-COVID Combo Vaccine:

- Developing a flu-COVID combo vaccine with ongoing phase three studies.

- The U.S. flu vaccine market is three times larger than the COVID market.

• Oncology Portfolio:

- Increasing efficacy of checkpoint inhibitors.

- Exploring individualized neoantigen therapy for stage one cancers.

Future Outlook

• Growth Strategy:

- Stabilize and grow the COVID vaccine market, focusing on high-risk groups.

- Expand sales outside the U.S. with contracts in Canada, the UK, and Australia.

• Potential Risks and Opportunities:

- Navigating uncertainties in policy and perceptions of mRNA technology.

- Potential revenue from new products like RSV and flu-COVID combo vaccine.

• AI Integration:

- Partnering with OpenAI to enhance business productivity.

- Aiming for product launches without increasing headcount.

• Cash Management:

- Aiming for breakeven and positive cash flow without raising more equity.

- Considering strategic partnerships and project financing.

Q&A Highlights

• Regulatory Landscape:

- Minimal impact expected from PBM reforms, tariffs, and Medicaid changes.

- Monitoring FDA and CDC roles in vaccine recommendations.

• COVID Vaccine Recommendations:

- Positive view on FDA’s focus on high-risk populations.

- Assessing market size for healthy adults to determine efficacy study needs.

• BARDA Funding Revocation:

- Surprise at BARDA’s withdrawal of bird flu study funding.

- Emphasized extensive testing and usage of mRNA vaccines.

• Competition:

- Keeping an eye on competitors like Pfizer and Novavax.

For a more detailed understanding, please refer to the full transcript below.

Full transcript - Bernstein 41st Annual Strategic Decisions Conference 2025:

Stephane Bancel, CEO, Moderna: Sure.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Fantastic. So I am thrilled to be here today with Stephane Pansell from Moderna. My name is Courtney Breen. I am The U. S.

Biopharma Analyst here at Bernstein. Before we dive into the Q and A, I will give Stephane the opportunity to give us some context to where Moderna is at, and then we’ll dive in. I’ve got a long, long list of questions, and we I’m sure we won’t get through all. For as a reminder, and I think if you have already come through, we do have the pigeonhole function. So please do feel free to add questions through throughout, and we’ll integrate them into the conversation.

So over to you, Stephane, for a bit of an intro.

Stephane Bancel, CEO, Moderna: Well, thank you, Kotnik. Good morning. I would say at the high level, we are trying to build, a lot of products coming impacting patients using mRNA technology. We are trying to diversify the company by having a very broad portfolio between infectious disease, cancer, but also rare disease product, and we are working on autoimmune disease as one of the next frontier for Moderna. Our priorities for the year are pretty clear, I hope.

One is to drive sales with the two products that we have approved, COVID and RSV. The second priority is to drive new product launches to diversify the top line and to grow the top line. We have up to 10 launches for the next few years. We’ve already several BLAs filed and more BLAs coming this year. And the third one is, of course, to resize the company from a cost standpoint because of COVID sales as we move from pandemic to endemic.

If I just point a number, we have delivered 20% cost reduction in Q1 twenty twenty five versus Q1 twenty twenty four. And if you look at what we announced on our Q1 earning calls, the 2027 target of around $4,000,000,000 of cash cost compared to $9,000,000,000 2 years ago, it gives you a good sense of how we are resizing the business across the entire P and L. We are slowing down the pace of new products getting to the clinic. We have fourteen hours, which is a lot, and five phase free without coming. We are also reducing manufacturing footprint Mhmm.

And also on the SG and A side. So I would say every line of the P and L. And because we have a platform, CapEx also is coming down tremendously because we can launch new products using existing infrastructure. Because we have a seasonal business right now, as you can imagine, the teams are very busy in q two, q ’3. But in q four and q one, there’s not as much capacity utilization.

We use it for clinical trial manufacturing. Mhmm. But you could see us launching ready this product, non, seasonal product like CMV, norovirus, and so on that you can make off season and help leverage the infrastructure without adding cost, both CapEx and also OpEx.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Fantastic. Very, very helpful. And there’s a lot going on in the industry and the sector, and I think we all wake up to a tweet or a news blast every morning. So I’d love to touch on some of those bigger pieces before before we dive in. And as I think about it, there are lots of different kind of elements to this.

There’s tariffs. There’s MFN or international reference pricing. There’s Medicaid cuts potentially on the horizon. There’s PBM reform. There’s HHS changes, including kind of strategy but also organizational cuts.

Some of those are really relevant for Moderna, and some of them are less relevant compared to the rest of the industry. Can you talk us a little bit through kind of the relative impact and size of that the risk that you see with those various factors?

Stephane Bancel, CEO, Moderna: Sure. So indeed, Moderna has a quite different profile than most of us of industry that I will articulate, in the next minutes. So let’s start by the easy things I would say. First, PBMs, there’s most probably PBM reforms coming. For some companies, it might be good.

For some company, it might be a question mark. The good news for Moderna is we do not use PBM because we are selling vaccines today. If you look at the vaccine business across the industry in The US, they are directly contracted between the manufacturer and the pharmacy chain. So Moderna has had for several years an annual contract with CVS and Walmart and Albertson and all the different players in pharmacies. There’s no PBM in between.

Mhmm. So whatever happens there will have no impact on us. The other one is tariffs. We make product drug substance for The US market in The US in our Manchester plant. So so compared to companies that have, you know, most of our product made in Ireland or Singapore or somewhere else, we don’t have that thing to worry about, which is which is great.

Medicaid, for us is a very, very little impact. Even if there’s a huge reform on Medicaid, because if you look at the government side of the house for us, it’s mostly Medicare for the elderly, which as far as we know in the current set setup of a new, tax reform is not impacted. Medicaid is very, very small, impact. I think the the the biggest impact for us, and I’m sure we’ll talk a lot about it, is what’s happening with the agency, with the FDA Mhmm. And the CDC

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: And the respective roles that seems to be changing a little bit compared to before. But the rest, I think, is actually not really impacting us.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Makes makes a lot of sense. And and I think kind of with all these uncertainties around, everyone’s trying to find anchors Yes. To to to hold on to, and so it’s useful to put that in context. As we think about the agency, there’s a there’s a few pieces that we’ve learned recently. Kind of in the last week or so, we’ve seen an update to the COVID expectations in terms of, number one, who is recommended to get COVID vaccines, but also number two, what is the evidentiary requirement for the boosters?

And then overnight, we’ve also heard, some more information, more broadly in terms of mRNA vaccine perceptions and and bird flu. But perhaps we just start with the the COVID details. Can you give us a bit of context as to how you see those announcements in the context of your business and in the context of, new clinical trials that you have up and running?

Stephane Bancel, CEO, Moderna: Sure. So indeed last week, we were actually quite pleased to see a written policy by the FDA commissioner and the head of CBER, in the New England Journal of Medicine, because as you know, there was a lot of speculation, including people saying there will be COVID vaccine next year in The US Mhmm. As I say, fall fall of twenty five, which we never thought was a realistic scenario given the high burden of disease. But, of course, you could never put zero probability to some scenarios. And I think the framework was very helpful.

If you look at what they are trying to do is, to really focus on people at high risk, which is they define as the elderly, 65, and adult with, high risk. If you look at the list of high risk, which is on the second page of that policy article, it’s actually quite long. People that are physically inactive are considered high risk. People that have smoked before are considered high risk. Of course, all the traditions of people with cancer, people with asthma, and of the East, so the list was actually surprisingly long, which is good.

And if you look at the table on the third page, they actually describe in their own assessment that those two population, the elderly and the adults with higher risk, are around one hundred million Americans. If you look at the market of COVID for the 2425 season, the season I just finished a few weeks ago, it actually was around 40,000,000 doses, four zero. Mhmm. So if you think about it, if this administration is going to really try to push a vaccination for people at high risk, I’m

Courtney Breen, U.S. Biopharma Analyst, Bernstein: in. Mhmm.

Stephane Bancel, CEO, Moderna: Because this is potentially a larger market than some of the confusion we have seen in the past and some of the skepticism that we have seen in the past. I think you can see I think it’s positive to see, the commissioner saying that people at high risk defined by age or comorbidity factors need COVID protection. And so we are quite pleased that we don’t go into a very dark scenario. And, actually, this scenario has potentially upside for us. Again, it’s still early days.

It’s only a week old. Mhmm. So we will have to process it and so on. But I’ve read it several times personally, and I know my team has done the same. And and it’s actually pretty clear in the what they are trying to achieve, which I think is a net positive.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Absolutely. And so as you look at that guidance, there is kind of been a suggestion that if you do want to go into those other patient populations for boosters, there’s been a requirement for efficacy studies. Can you talk about kind of does this impact your development plans or perhaps who you include in your studies going forward? Or would you initiate any sort of efficacy studies to try and expand beyond that 100,000,000 patients?

Stephane Bancel, CEO, Moderna: Yes. It’s a it’s a good question that, again, we are processing as we speak with a team because, again, it’s literally a week old, is if you look at the data of who got vaccinated, let’s say, in the last couple of seasons as we are moving from pandemic to endemic, it is mostly the population that they are looking into. Of course, there were some healthy people that got vaccinated because they didn’t want to get sick. They don’t want to have a loved one at home or parents getting sick. They didn’t want to get the risk of long COVID Mhmm.

Because long COVID is still scientifically a thing. Mhmm. And so as you start to see things apart, what’s gonna be interesting to really figure out is how big is the market, and that’s why the team, given the guidance is very new, are trying to analyze this as we speak. How big is really the market right now of healthy adults that do not have risk factors? Because if we have to run a study to access this market, but that’s a couple million doses, the math doesn’t work financially, and it’s a very bad return on investment to invest in such a study.

And so the fact that there’s clear guidelines for what we always focused on, and if you look at Moderna strategy for the last several years, we’ve said respiratory vaccine strategy is about people at high risk, which are defined by the elderly and adult with comorbidity factor faces. There’s nothing new for us. And as I said, if this is where they want to push in terms of the use of vaccination in that high risk segment, it could actually be a net benefit compared to what we have seen in the last few years where there was a lot of confusion.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm. And perhaps the parallel for that is as we think about RSV and the change the change to, the inclusion criteria and making that more vague has kind of caused some confusion in the environment compared to that being quite an explicit recommendation for the particular groups.

Stephane Bancel, CEO, Moderna: Yes. And you build on even further on the RSV analogy. RSV initially was 65 plus, and then you can see the going down in age, there’s a discussion at the last ACIP meeting for potential vote at the June ACIP meeting of about the 18 to 49 year old adults because he was 65. Now it’s down 50 plus. Mhmm.

And there’s potentially an 18 plus high risk.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: So you’ve got to start to see this convergence, which, again, you go back to a medical need. The medical need for those COVID flu RSV respiratory vaccine is in those two population. And so if this administration wants to say, let’s stop vaccinating everybody. Let’s stop recommending everybody, but let’s really go after those population. Again, I will take a hundred million time Mhmm.

Any any day of your week.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Totally fair. Hundred million is quite compelling.

Stephane Bancel, CEO, Moderna: Much better than 40.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: And and so the the other thing that you kind of alluded to in in one of your initial comments was perhaps the changing relationship within the agency and the changing roles of the different parts of the agency. And I think we saw that now just in the last couple of days with the announcement from RFK Junior, specifically highlighting the pregnant female Yeah. Kind of options when it comes to boosters, and now no longer there’s a recommendation there and the same for children. Can you talk a little bit about perhaps your interaction, and how you’re working to ensure that there’s appropriate understanding and appropriate access?

Stephane Bancel, CEO, Moderna: Yes. So, again, for those that might not be as familiar because I know we have some generalists in the room, historically, in The US, the FDA will review the clinical data and approve a product for use by medic health care professional. And then the CDC will look at the data of the manufacturers, but also every year we look at the real world data to make recommendations. And those recommendations are important, not only because it’s what a lot of doctors and health care professionals use, but also for a lot of those things, very important for reimbursement. And so, traditionally, this is the respective role of the two agencies.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: What we have seen recently, and it’s really hard to have a judgment, is it an exception or is it what’s gonna be the rule moving forward? Is do you see FDA having more of a role in recommendation

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: Of use of products that they approve or not approve? And, again, I think it’s just too early. We’re talking about what happened literally in the last week Mhmm. And it’s an equal one, so I think it’s hard to make a rule out of something recent and such a small sample set, or are we gonna really go into a direction where the role of CDC is gonna reduce tremendously?

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: Because that was its really its key role based, of course, the surveillance road. But if you look at the public health level, the recommendation, of, the CDC was historically really important. So I think it’s gonna be interesting for our industry to see is that something that changes over time or not.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Absolutely. Absolutely. And then we’ve had a question come through, and I’d I’d thrown it into my notes this morning because we all woke up to new news Yes. This morning as well with, kind of the the revocation of the of the BARDA funding for the phase three for the the bursal influenza study that, or program that Moderna was engaged in with, with the administration. And I think specifically in the commentary that we saw from the HHS director was language around kind of the fact that the mRNA technology remains under tested and that they’re they are done with repeating the mistakes of the past administration, which concealed the legitimate safety concerns, which to me sounds like very pointed language is probably a very kind way of describing that language.

And so I would love to hear kind of how you are reacting to that information. Does this require more education? Because, I mean, mRNA has been tested and used in in millions of people around the Yeah. And so I would love to hear kind of how do you go about making sure that the right people and the administration understand this and your reaction to to to this in a

Stephane Bancel, CEO, Moderna: from an

Courtney Breen, U.S. Biopharma Analyst, Bernstein: immediate way.

Stephane Bancel, CEO, Moderna: So I think there’s there’s a lot of of of questions, here. First is, as you say, what’s interesting in the quote that we saw from the spokesman of the agency, is the fact that the technology isn’t tested given that, you know, we run the 30,000 people study placebo control, which I think is what this administration is trying to, aim at, placebo control. And then as you said, the vaccine has been used in several billion people. There’s never been in the history of vaccines, vaccines that in their lifetime have this type of exposure to so many people. And as you know, the way the regulation is set, which is we as manufacturers have to report any complaint from any countries to all the regulators.

So FDA not only sees what’s happening in The US, but in real time, companies like ours, but Pfizer or or or Merck or anybody who has a vaccine has to report to the regulators for their product complaints from all the countries in which you provide the product. The other interesting things about this quote, which I don’t know if it was, you know, validated by leadership or just a spokesman. It happened in companies as you all know too, because it was kind of a real time thing. We literally got the notice yesterday afternoon, and as after market closed, we issued a press release, is that it’s actually the Trump administration under Trump one who funded for BARDA, not only, the Moderna vaccine phase three, but also a lot of our product. And as we know, Operation Varspeed was an amazing success, and it’s The US and the US government who took out of the pandemic the world.

We don’t have a European vaccine coming and saving us. We don’t have, you know, a Chinese vaccine or a Japanese vaccine. So that’s also quite interesting. So I think it’s really hard to know when you see spokesman’s, you know, comment, does he represent what the leadership thinks?

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: I don’t know if the head of FDA thinks that or not. In the interactions we’re having, we’re having a very science based database discussion. Again, the guidelines coming from FDA commissioner last week, I don’t think made any insinuation or comment about safety. Actually, if you look at it carefully, which is why for those who care about the field, I will suggest if you have not done it, read it and read it a couple times. There is some language on MMR that’s quite interesting.

At the bottom of the first page, the comment is that there’s been clearly demonstration of safety and efficacy of MMR vaccines. It’s coming from the FDA commissioner. They didn’t have to include that. The title of a paper is COVID nineteen policy, and they decided to include it, which is, I think, also quite interesting given a lot of, previous statements by different player in the administration. And so I think that’s that’s a bit where we are, which is focusing on the data Mhmm.

Having discussions with the teams, especially at the FDA. And as we said on a quarterly call, at every level, we’re having regular discussion, normal discussions with the team, and the files are advancing as you would expect.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Fantastic. Thank you very much for that. And and I’m sure there’s gonna continue to be lots of conversations because every morning, we’ll continue to wake up to new news from this administration. Perhaps trying to dive a little bit into your business and and perhaps starting with kind of where we’re at right now. It feels like this year is perhaps kind of a foundational year for COVID and RSV, kind of setting what the view of that endemic kind of population might look like going forward.

And then we’ve got upcoming readouts that perhaps begin to send the signals for where the future might go. What is it that you’re really focused on this year in terms of stabilizing and achieving that at least 1,500,000,000 or to the 2,500,000,000 of revenue that you’ve guided to?

Stephane Bancel, CEO, Moderna: Sure. So I think it goes back to some of things we started talking about, which is last year, the good news is in the elderly setting, 65. In The US, the market went down 2% compared to the year before. So you start to see a stabilization of people that we call the hardcore vaccinees, which are people, if you look at the claims data

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: They are on schedule to all of our vaccines. Those are elderly that are up to date on Shingrix, on flu, on all their COVID boosters since the first one of a pandemic, that we all got, you know, in in in in q one or q two thousand twenty one. On the pneumococcal vaccine, just all the vaccine, they’re up to date. And so that segment is a very important segment for us because there are people that care about being protected. They don’t wanna be sick.

The other piece we’re working with a pharmacist because, as I said, the pharmacy chains are really the channels we’re working with. And if you think about the pharmacy, it’s quite interesting. They have all the data of the drugs you use. And so they have a quite a sophisticated system actually to reach out via text message. I’m sure some of you get those, text message or emails to make sure that you are aware of the guidelines.

Mhmm. Mhmm. And so if you look at, for example, in the spring booster, which as you know, it is recommended for the elderly to get the COVID spring booster, the volume is actually pretty similar to last year

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: Despite having had no CDC promotional campaign this year because those budgets have been cut. So despite the cut of promotion, just even to remind people, go get your booster, The pharmacy channel has been pulling a lot of people reminding themselves not for a campaign, but sending a text to, you know, 70 year old saying, hey. You have not come for your COVID booster. Do you know it is recommended, and you should come get it? And same thing with comorbidity.

They have an amazing ability to know that you have asthma because you take an asthma drug or you have autoimmune disease or you have, you know, cardiac risk and so on, just based on the drug you buy from them to be able to reach out to you. So I think those are already the market going back to what we talked about. The policy paper from the FDA is spot on strategy. And so our focus in The US is to make sure we stabilize the COVID market, that we get some RSV sales because last year, because of timing of contracting, we are mostly excluded from the contract, but from small kind of independent pharmacy and so on. And then it’s what we’re also doing outside The US.

We should always remember, like you guys do with stock, the best way to manage risk is to diversify. Right? Mhmm. And so the good news is we have sales also outside The US. Roughly half a company sells are in The US.

Half a company sells are outside The US. We are very pleased about the contract that we have in Canada, in The UK, in Australia, where we set up ten years agreements with the governments in, investing in the countries and building a local plant Mhmm. Giving them pandemic readiness in national soil. They gave us basically ten years contract. And so those contracts are gonna start kicking off this year because our plants are coming online this year.

We won’t have a full year impact. But in ’26, you’re gonna have a full year impact and de facto just mechanical growth outside The US. As you know, in Europe, there was this, contract between Pfizer and Europe that went without the tender, which is against European law for which we’re getting back into getting some sales in Europe. And so same thing, if you look at ’25, ’20 ’6, ’20 ’7, you’re gonna see a reacceleration of Moderna sales in Europe. We’re still doing some good business in Taiwan, South Korea.

We have some tenders also in Latin America and so on. So I think this is what we’re trying to do is really getting COVID and RSV, as I said, priority company number one, is get this business stable and go back into growth. The policy in The US might be a growth driver this year if we get into a focus on people at high risk and clarity that if you’re at high risk, you should get those vaccines. And then the next leg of growth, of course, is coming from the new products.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm. Absolutely. And so maybe just to zoom into this year because you’ve kind of guided to that 1.5 to 2.5, and you’ve spoken a lot about kind of what what needs to go right or wrong

Stephane Bancel, CEO, Moderna: Yeah.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: To to sit between those ranges. Can you perhaps clarify for the audience kind of where where that bottom end of the range, what is expected to happen in the environment or what must happen in the environment to achieve 1.5, and if there’s anything in the environment that’s happening now that perhaps adds any more risk in that scenario.

Stephane Bancel, CEO, Moderna: So when we did the forecast, we took a lot of assumption on risk to look at the low end of the guidance. So if you look at the low end of the guidance, 1.5, to give you a sense just to calibrate, if you look at the sales of last year, US One Point Seven, you take out the basically returns that makes 1.5 net, that’s the number of last year. So you assume either all the business outside The US goes away Mhmm. Which as I described, it doesn’t look like it. It’s actually almost the reverse.

Or in The US, you know, you get the business more than halved, which again, I don’t think if you look at price and or market share and or time, it’s really hard to get there. So as we’ve said on the call a couple of weeks ago for q one, we still confirm the the guidance. It still has a broad range. We are still in the process of contracting in The US with a pharmacy chain, so it’s a bit too early to tighten the guidance. And because there’s so much uncertainty, we thought it was not appropriate to tighten it.

We will at the right time.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: But we just reaffirm that the guidance we feel that we can deliver the low end of the guidance.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Fantastic. That’s that’s helpful to understand to to kind of get that context and ensure that there is kind of certainty for investors and and thinking

Stephane Bancel, CEO, Moderna: end of remind people that in the guidance, there’s no new product baked in. Mhmm. Because that was one of the lesson of a mistake we made, and I take accountability for it last year where we had put the RSV in the guidance. Mhmm. And, of course, we missed it partly because of RSV.

And so what we said last September based on that lesson that in guidance for the year of launch, we put zero. Mhmm. So for example, should we get to already free approved, which we’re working actively toward, those sales basically come on on top of the guidance, and they’re not in the guidance.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Fantastic. That’s that’s helpful. And and jumping into that flu combo, there has been a slight change in the filing strategy, and so you announced announced that again in the last couple of weeks. Can you just talk about what that change represents, if there’s an impact to timing or potential for probability of success, and what that means in terms of kind of how flu is gonna play a role in in your Sure.

Stephane Bancel, CEO, Moderna: So it goes it boils down to the flu and what the FDA has been saying and how they evolved their position around flu. Flu historically, you have seen approvals in The US by the FDA of new flu products based on antibody levels. And so based on that precedent, we designed the phase three study initially on antibody levels, but it’s faster and cheaper. As the phase three was ongoing, the FDA started to ask question, hey, why not show? Maybe for a new technology we showed and when we pointed them to new flu technology where they did not, want efficacy study.

And so what became clear very recently with the FDA at the working team level Mhmm. Is that they’ve kind of made up their mind that they really wanted efficacy data, especially because they are, like you would expect, like us monitoring the season. We started, last fall a very large phase three efficacy study, which we will have to do anyway.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: Because when you get the proline antibody, then you have to demonstrate efficacy in a follow on study. That study is funded by our Blackstone partnership Mhmm. 100%. And so because as you know, the flu season was was pretty hard last year. And so because of that, a lot of cases accumulated in the study.

We announced on the earning call that we exceeded the number of cases needed for a readout, which is why we say we should have a readout this summer. Well, as you can imagine, FDA follow the cases as well. And there was discussion at the working team level between our regulatory team and the FDA team Mhmm. Reviewing the file saying, hey. You guys are gonna get efficacy data anyway.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: So given we know we’re gonna get it, we want that data before we finish our assessment of the flu COVID combo, which was filed last October. And so, what happened is, we had discussion with them. Do you want us to file an amendment?

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: Or do you want us to withdraw a file at the team after the internal FDA deliberation communicated to us last week that they wanted us to withdraw a file and we file a complete file with both Mhmm. The COVID data, which we have efficacy for

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: And the flu data to review the flu COVID combo Mhmm. Which is what we said last week we will do this year.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Fantastic. And so if you give us how does that then translate to a potential launch date

Stephane Bancel, CEO, Moderna: for the flu? So it will, of course, depend precisely when do we file Mhmm. Based on when do we get the data. We said this summer for flu, and then we need to prepare the BLA and all the filing and Mhmm. Quality controlling all the subject.

Because as you know, in the in The US, you have to set all the raw data unlike other regulatory agencies, so it takes a bit more time to prepare. So based on when we file and do we use a voucher or not

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: It will it will depend, I think, of our internal choice. We still have one voucher Mhmm. To decide do we want to use it or not because it’s still, you know, hundred plus million dollars, so we make those decisions hopefully, carefully, and thoughtfully Mhmm. To see, can it help you in term of a contracting season or not? Mhmm.

So I think it’s a bit too early to know. Is it the ’26 launch, which will not be a full launch? Is it a ’27 full launch? But do you have some sales in ’26? So that’s a piece that I think it’s just too early to know with just too many variable on time lines.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Got it. That’s super helpful. And then I think one of the big questions when it comes to flu and COVID is, does this add to your potential revenue purely by adding extra price because you’re adding extra kind of impact to those patients that were already getting a COVID vaccine. Now they’re also getting protected from flu, or does this expand the market Mhmm. That you have in in any way, shape, or form?

And can you talk about how you think about that internally?

Stephane Bancel, CEO, Moderna: Sure. I think it’s actually both, and for the following reason. As we talked about a few minutes ago, the COVID market last year was 40,000,000 doses in The US. The flu market was 50,000,000 doses. To just give you a sense that you have it by round by numbers, you have around a three x bigger market for flu.

Mhmm. And if you look at the data, going back again to people at high risk, which is our focus, excuse me, the people at high risk, what you see is basically, seventy plus percent of those people getting flu COVID the same day. Again, if you look at the claim data, people person by person in The US, of course, we were looking at people’s name and ID, you you see that actually seventy percent of people going to a CVS or Walmart will get both shots the same day. And because nobody really likes needles too much, the fact that those people are willing the same day to get both shots in each arm Mhmm. Makes us believe that actually there’s a pretty large market, enough target market of people at high risk who want a combo product.

And this is not a new concept combo product exists for the pediatric setting. If you think about it, the the pneumonia market, whether you have a Pfizer product or Merck, those are multistrain products. Mhmm. And so it just makes sense if you think about it. Even, you know, in our lifetime, many of us have been getting a flu shot pre pandemic and saying, you know, because we’re sick, the the shot didn’t work.

Well, actually, you don’t know until you do a test because you might have an RSV infection or another no virus infection. There’s even old coronavirus, that still circulates in New York every year Mhmm. Causing around ten percent of hospitalization linked to hundred plus year old coronaviruses that are still separated that came from what was called the the Russian flu, which was actually a corona pandemic Mhmm. In 8017. At the time, there was no PCR testing, so nobody knew.

But scientists have been able to go back through, looking at at deceased bodies and so on and testing to realize that? And so I’m saying all that, which is if you had the magic wand, what you would want is a respiratory virus vaccine Mhmm. Where all the respiratory virus are taken care of by a combo vaccine that has all those components. You could see in the future even the elderly wanting a COVID flu RSV combo. Mhmm.

As you know, we have shown data about such a product. And so I think this is where the market is going because it’s just convenience. Mhmm. To you, when your question of price for us is not only there’s this ability to go into a much larger market three times the size, but then the high dose flu shot is around $70. So adding just even if you assume some of the part in terms of pricing, adding another $70 for the same cost of good because the thing that is really interesting about mRNA is the cost of filling the prefilled syringe is actually higher than the cost of the mRNA in the prefilled syringe.

To just tell you the sense of the manufacturing scale that we have with mRNA, because what most people forget with mRNA is one copy of mRNA in your body makes around a thousand protein copies. So you get a free log amplification by nature as a gift Mhmm. Which is why if you visit the Monarch factory, you see hundred liter reactor. If you go see a Sanofi factory, you see 20,000 liter reactor. And so when you look at those things, it’s actually quite interesting for us.

You get a bigger volume. You get the added price on your COVID price if you assume no premium despite the convenience. Mhmm. But the cost of good is almost the same by a couple pennies. Mhmm.

So we think it’s actually really interesting for us, which is why we are deploying a lot of capital, toward COVID flu combo. If you look at the market, it is quite strange to us that Pfizer has shared no data or the clinical data on the 65, which is clearly where the medical need is. They’ve shared data in the young adults that are healthy. They have not shared data in the elderly Mhmm. Which I will assume from their side that the data might not look so

Courtney Breen, U.S. Biopharma Analyst, Bernstein: good Mhmm.

Stephane Bancel, CEO, Moderna: Because they know that the market is is in the elderly and people are at high risk, obviously. Then there’s, of course, Novavax with a combo, but it’s also not clear at this stage what will data will look like. Mhmm. The good news is we have phase three data showing non inferiority to Fluzone HD, the gold standard in the elderly for flu. We have, shown much improvement because we use twelve eighty three in the combo Mhmm.

The next gen higher efficacy COVID vaccine. So looking at those things together, we are quite excited.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Fantastic. That’s really helpful. Perhaps pivoting to kind of something that’s upcoming this weekend, we’ve got ASCO Yes.

Stephane Bancel, CEO, Moderna: Kind of

Courtney Breen, U.S. Biopharma Analyst, Bernstein: one of the biggest oncology conferences. And as I think about kind of some of the messaging and and kind of work you guys have been doing, there’s been a bit more active highlighting of your oncology portfolio over the last few months. Can you give us Mhmm. A a really brief overview? Sure.

And and certainly kind of on the INT, which I think is obviously nearest and and dearest to to to my heart given my immunology, immuno oncology background, how derisked would you describe that phase three melanoma trial as being given the data we’ve seen so far?

Stephane Bancel, CEO, Moderna: Good. So let me maybe step back a minute to understand the role of oncology in our strategy, which is what we’re trying to do because we knew with the COVID pandemic that our vaccine work is to develop pretty quickly in over a few years a respiratory portfolio that can become a massive cash cow for Moderna. Why? Because we pay the phase three only once. Mhmm.

And we already build manufacturing Mhmm. And use all the same infrastructure for all of our product because we have a platform. So if you think about it, if we could build a $4.05, $6.07, $8,000,000,000 respiratory business with a pretty high gross margin and no r and d and the same sales and marketing team, which is very tiny in The US with a 50 people in commercial. Why? It’s massively concentrated market.

You have CVS as a big one. You have Walgreens as a number two. Then you have a few large food retailer like Walmart, Albertson, Kroger, and so on. And then you have a long tail, but you go at them through, you know, purchasing agreement for, like, independent pharmacy network and so on. So you could add you could launch RSV and flu and flu COVID combo all with same Salesforce.

Mhmm. So if you think about it on a couple year basis at the p and l level, I love that business. Mhmm. I know right now vaccines are not very popular, but the virus are not leaving the planet. Mhmm.

People are still getting sick. We have more and more older people around the world. So we are playing a multi year game. We’re not playing a couple quarter game. And so the way we think about this business is that we’re gonna create a massive cash cow business that allows us to fund the platform and all the products coming out of the platform.

So a big next chapter of Moderna is oncology. And if you think about what we’re trying to do in oncology, we’re trying to to go after a lot of things because with INT, the individualized neoantigen therapy combined with KEYTRUDA, we are trying to increase the efficacy of ketidra or checkpoints that they demonstrated alone and as we know, those products have changed the life of so many people. They have generated incredible turnover for those companies and cash flows and and and market value as a consequence. And so we think that if you like we’ve shown with INT, in melanoma, you can have two out of three people that three years after surgery have no distant metastases Mhmm. And as we know, people die from metastases most of the time or no death compared to ketogluarone.

That’s a pretty significant clinical impact. Right? And so we want to improve efficacy of checkpoints by adding INT to patient in stage two and stage three of a cancer. We want to go in monotherapy early because the checkpoint, as we all know, are not used in stage one because the side effect is terrible. As you know, when you look at the list of side effect on the label, it’s basically who’s who of autoimmune disease, which again, as an immunologist, you’re not surprised, you push your immune system, so that’s what happens when you push your immune system, but it’s better to have type one diabetes or lupus than being dead, obviously.

But think about INT, it’s the same technology as our vaccine. So the safety profile of this technology is remarkable. As you saw in the clinical study, the safety profile of a combo was the same as ketodriolone.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: And when you look at the science, it’s like that. It’s the same chemistry. It’s the same lipid. It’s the same manufacturing process than we use for the COVID or the RSV vaccine, and we know the safety profile of those products. And so we think the monotherapy is gonna be a very interesting market because it’s very large, and you don’t have a competition that you have in the stage two and stage three with checkpoints where you have a long list of checkpoints and soon, generic checkpoints or biosimilar coming, many of them out of China and so on in the coming years.

So we feel excited about that. We also, are quite excited about the products we mentioned more recently, but we already highlighted last year at ASCO, which we call the checkpoint product for us, which is basically a vaccine with PD L1 and IDO coded into it. So, again, same technology as COVID vaccine against safety profile wise. We have shared at our earning call, and we’ve had data coming last year of a phase one a at ESMO, the European smaller Mhmm. Kid of ASCO or sister or brother of ASCO.

Some quite interesting early data as we’re doing dose finding. We’ve announced that we’ll present more data later this year, but we’ve had some quite interesting response in people in metastatic setting. And I’ve seen personally cases of patients, so think about a 72 year old woman that has melanoma and has failed on ketidra and then failed on Opdivo and then failed on the third one and the fourth one, and then you give that person with cancer progressing, of course, a couple years after because if you look at the, you know, number of treatment for all those checkpoints and in between a couple years after with a much worse disease, you give them our product and they respond to it. Mhmm. So, of course, it’s a still small signal.

So we have announced we are expanding into a significant phase two that product to be able to get a much stronger signal. But so it’s the first time we’re making a foray into a metastatic setting, so I said that we are phase two, three, we’re phase three going from melanoma. We’re gonna go into monotherapy Mhmm. Stage one cancer. We’re into metastatic setting with this checkpoint product.

We’ve also if you look at clinicaltrial.gov and what we announced at ASCO last year when Rose, our head of R and D, gave a bit of an overview. We’re also working on trispecific for multiple myeloma, which were not in liquid tumors before. So there’s just a lot of things going on in Moderna. I think people should expect up to 10 oncology programs in the next twelve months in the clinic.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: Because, again, when the platform is going, it’s going as we’ve been able to show in vaccine, where we’re able to do based on the learning on a vaccine infectious disease and our learning on INT in cancer. We’ve launched some virtual last few years Mhmm. That we’re able to design very quickly and pivot very quickly as we showed during COVID where we designed the COVID vaccine over weekend. Mhmm. Can with this technology because you design everything in silico on the computer.

You can invent new drugs very quickly based on what you learn in the clinic. And so this next wave of product in oncology is I think what is super exciting to us, and that’s gonna be funded by this cash cow that we’re building with, respiratory vaccine franchise.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Fantastic. We’ve had a couple of questions come through on that cash cow kind of question. And and and the angle of the questions is kind of two two themes. One theme is it sounds like you’ve got these long term international For vaccines.

Is there any reason on the vaccine respiratory vaccine side of the equation that that couldn’t become more like 75% of your overall contribution to to cash? That’s kinda one part of Yeah. Of question, or is there a margin reason why why international is less appealing than than The US? And then the other theme that we’ve we’ve had come through on this is, is there a risk to your cash generation and the spend rate? And, therefore, is there any potential that Moderna would need to raise equity, over this horizon as we head towards kind of that longer term future in in oncology and other places?

Stephane Bancel, CEO, Moderna: Great. So on the first point, what is quite interesting is the pricing on the vaccine between The US and outside The US is very similar. Unlike what you see in therapeutic where sometimes you see a two x, a three x, a four x pricing difference. In the vaccine, the price is very similar, and, actually, there are even countries where price is even a bit higher than The US. But then if you look at volume, in terms of volume of people vaccinated just based on population, you have actually a much larger opportunity outside The US than you have in The US.

So because the price differential is not what you see in drugs, right, in drugs because of price differential, even with smaller population, you see The US market being very important. If you look at vaccine, you realize actually a lot of vaccine actually have more sales outside The US than they have in The US. So we think it’s quite an interesting opportunity there. In term of the burn, what I think we have done last year and this year and again earlier, this month with the cash cost target for 2027 is to be very clear, which is we will adjust our cost by basically not taking more drugs into phase three Mhmm. And being very disciplined about prioritizing the assets to get back to, breakeven and cash flow positive for the company, which is we’re not gonna raise more equity.

We have a lot of levers that we are doing. We are going after the entire P and L. As I said, we were around $9,000,000,000 of of cost a couple of years ago. We are at around 5 now. If you look at the current spend, we are going down to 4.

As at the same time that we are launching products, we’re gonna have new revenues coming on. As I said, the policy guidance on COVID last week might actually be a plus in some of the time in The US, and The US market has been stabilizing. But we will continue to monitor that very carefully. We also, because the latent portfolio is basically what is not being funded right now for phase three

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm.

Stephane Bancel, CEO, Moderna: Because our focus is really on oncology as we just talked about. Mhmm. And so we are having quite a number of discussion. We have strategic partners. As you know, historically, we have done several deals with AstraZeneca, several deals with Merck, deals with Vertex.

And so I think this team is willing and able to execute deals. Mhmm. We’ve also done deals with, project financing Mhmm. Like the deal with Blackstone last year. Mhmm.

We know the key players in the project financing world. Last time I checked, there’s a lot of capital to develop in private equity, and they like that it is not correlated to market Mhmm. Because it’s a multi years project investment, that they can do either on a project by project basis or portfolio of project. You know, we have a very exciting EBV vaccine. You remember the clinical data in phase two, an HSV vaccine for herpes.

There’s no product on market as well. VZV vaccine that actually showed non inferiority to Shingrix even on T cell, a log better T cell than Shingrix out of phase two. So if you look at what’s happening there, I wish we could fund it, but we are being disciplined. We’re not funding it. But if a partner is willing to go participate in the shingles market Mhmm.

We think it’s a great opportunity because it’s already a $5,000,000,000 market. There’s only GSK right now. If you look at the recent data, there’s some interesting epidemiology data linking vaccination against shingles and less level of dementia. Mhmm. It’s purely epidemiology.

Now there’s a big study being run by GSK with NHS in The UK to try to demonstrate it, but think about what this 5,000,000,000 market could become if you had the reduction of risk of dementia, which is not surprising as a scientific hypothesis because those viruses rest in your immune system, as you know, and as you age, of course, there’s reactivation of those viruses creating inflammation and a lot of those disease, cancer, autoimmune disease, degeneration of a brain, have, inflammatory mechanism underlying. And so we think that’s quite interesting. So think about the scenario where you say to a private equity partner or a pharma partner, what if we develop together because it’s ready for phase three, a shingles product? And let’s imagine when we take 20% market share, it’s a billion dollar Mhmm. Of the current market, which is growing as aging population with this huge upside on dementia.

And we take a billion dollar. You don’t have to invest a a dollar of CapEx Mhmm. Because the factory is already here. It’s not seasonal. We could make the product in q one and use existing Salesforce to go sell those things in a retail.

70% of Shingrix sales are done in retail channel in The US, the CVS of this world and so on. So you could think about the you don’t have to be genius in math to realize quickly. That’s actually a pretty attractive opportunity. You pay once a phase free study and you have forever because, again, VDV is not leaving the planet. It’s gonna be with humans forever.

So I think that’s just an interesting set of assets that we have right now. And, again, we have a willingness, and we have a BD team who has been able to do deals in the past. So so we are we are actively having many discussion on those things.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Fantastic. So lots of opportunities to to ensure that cash continues to come into the business. One other topic that I think has been elevated, and we touched on it before we jumped on the stage, and come up in conversation. And yesterday, the keynote speaker at lunch was, about all of the topic was all about AI and AI integration into businesses. We just had a question come through as well here in in terms of your tech adoption strategy.

Yes. And I know you’ve connected the dots between kind of HR and technology. And this particular question is also asking, do you have any CapEx spend investment spend estimates, sorry, that you can share, with us in terms of kind of how big is this investment you’re going after, and and what can it do for Moderna?

Stephane Bancel, CEO, Moderna: Yeah. So in our case, because we don’t build data center, it’s not CapEx. It’s OpEx working with partners and having access to their tools. So it’s public and has been well documented. We have a very important partnership with OpenAI.

We’re actually the company helping them in the pharma space develop GPT enterprise for b to b clients because, of course, the last thing we wanted is to upload scientific data and help everybody else learn from our own data. What we believe is AI is gonna really change work in a very profound way. So I think there’s a productivity element of the company. It includes development, manufacturing, SG and A. And so we have a very large effort, where we’re trying to look at key business processes end to end across the enterprise and to ask a question, how would you do it in an AI world versus before with IT system and people?

Mhmm. And there’s already a lot of impact. We have reached three thousands of GPTs that have been written at the company from HR GPTs to legal GPTs to finding the clinical dose of a drug using GPTs. And then there’s a huge chapter around innovation in terms of finding new molecule, finding new lipid to allow mRNA to go into a new cell type to open the aperture of all the things the platform can do. This also is something that has been going on for actually a long time at Moderna.

In 02/2016 is when I really got religion on AI personally because our scientific team invented a new molecule, an enzyme that does not exist in nature, that did exactly the job that it was designed to do in the larger in the system that we believe was machine learning. It was not long large language model. But this this day really was a very profound moment for me Mhmm. Where a system was optimized to for chemical formula. Most of my scientists at the time pooh poohed it that this most probably would not work.

Somebody was crazy enough to make with their bare hands the protein and test it. He was doing exactly what it was designed for. He came out of a computer. Mhmm. And so we started to invest a lot in term of training our employees, and there’s a training called modern AI Academy where every employee is required to go to that multiday training.

And then now with GPT that we have accelerated that and are just trying to reinvent the whole enterprise. Mhmm. And it’s gonna be important for us as we launch all those products because I think we could launch an enterprise, actually, with flat headcount, maybe even headcount down. If you look at the last few months, headcount is actually down, by a couple hundred people already. And if you think about where we’re going, where we’re launch 10 products, the change I have for our team is how do we launch those 10 products without adding headcounts.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Mhmm. Mhmm. That’s really quite gonna

Stephane Bancel, CEO, Moderna: be quite a fascinating journey. Yeah. We’re quite lucky with the timing.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Absolutely. It’s a it’s there’s lots of opportunities and things to look forward to in the future. There’s a few bumps potentially along the way as we think about the policy and politic political environment you’re in at the moment and kind of skepticism around mRNA and vaccines, but it certainly looks like there’s lots of, bright lights or sparks in the future.

Stephane Bancel, CEO, Moderna: Yeah. We have a great portfolio, 8,500,000,000 of cash, a very dedicated team. We’re putting our head down. We’re doing the work, and science is science, and the virus are still hurting people, and cancer is still killing people.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: Absolutely. Thank you so much.

Stephane Bancel, CEO, Moderna: Thank you.

Courtney Breen, U.S. Biopharma Analyst, Bernstein: My pleasure.

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