Analyst Conference Summary

biotechnology

conference date: August 7, 2019
for quarter ending: June 30, 2019 (second quarter, Q2 2019)

Forward-looking statements

Overview: Clinical stage mRNA company continues to advance its pipeline. Moderna had its initial public stock offering in December 2018. Moderna has lots of cash, but is burning through it quickly.

Basic data (GAAP):

Revenue was $13.1 million, down sequentially from down from $16.0 million, and down from $28.9 million year-earlier. All revenue is from collaboration and grants.

Net income was negative $135.1 million, up sequentially from negative $132.7 million, and down from negative $90.6 million year-earlier.

EPS was not stated, sequentially from not stated, and down from not stated year-earlier.

Guidance:

Moderna reiterated its expectation for cash, cash equivalents and investments at December 31, 2019 to be in the range of $1.15 billion to $1.20 billion

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "We believer mRNA has the potential to be a new platform of medicines. . . Since our last quarterly update, our personalized cancer vaccine program with Merck has advanced into Phase 2, the cytomegalovirus vaccine Phase 1 study has completed enrollment and four new Phase 1 trials in immuno-oncology and infectious diseases have begun. We are pleased by the advancement of our programs and look forward to sharing new clinical data in the near term. Additionally, we are excited that Vertex extended our research collaboration based on the teams' progress to date. Our balance sheet remains strong, and we continue to deploy our capital toward the advancement and expansion of our development pipeline and the creation of potential new modalities."

Moderna currently has 21 mRNA candidates, with 13 now in clinical studies

Working on vaccines first was part of a risk management strategy and continues to prioritize risk management.

Vertex Pharmaceuticals extended the companies’ research collaboration in cystic fibrosis.

The first subject was dosed in the Phase 1, mRNA-1172 or Merck V172, RSV vaccine (Respiratory syncytial virus ) study. As a result, further development of mRNA-1777 has been paused and next steps will be determined based on data from the new mRNA-1172 Phase 1 study.

We have four vaccines in the clinic for diseases with major unmet medical needs.

Moderna's Phase 1 study of mRNA-1647, Cytomegalovirus (CMV) vaccine, is fully enrolled. The study is randomized, observer-blind and placebo-controlled. 25,000 newborns infected in US each year, has proven difficult to vaccinate against. 6 RNA sequences are included in 1647.

The second planned interim analysis of Phase 1 hMPV and PIV3 vaccine (mRNA-1653) study showed antibody titers remained above baseline at all dose levels at seven months. mRNA-1653 is designed to protect against human Metapneumovirus (hMPV) and Parainfluenza Virus Type 3 (PIV3), that cause respiratory illnesses. Moderna plans to advance mRNA-1653 into a Phase 1b study of pediatric subjects.

Moderna's follow-on Zika vaccine candidate, mRNA-1893, continues to progress toward an IND filing. There will be no further development of Moderna's first Zika candidate, mRNA-1325. The Biomedical Advanced Research and Development Authority remains committed to its grant of up to approximately $125 million for development.

The first subject consented for the randomized Phase 2 study to assess whether post-operative adjuvant therapy with mRNA-4157, in combination with Merck's Keytruda, improves recurrence-free survival in adjuvant cutaneous melanoma compared to Keytruda alone. The Phase 2 patients are at 34 neoantigens, more than the Phase 1 trial used.

The first subject was dosed in the Phase 1 Zika vaccine (mRNA-1893) study.

The first patient was dosed in a Phase 1 KRAS cancer vaccine (mRNA-5671 or Merck V941) study. About 20% of human cancers are driven by mutated KRAS. 5671 codes for the most common mutations.

The first patient wasdosed in a Phase 1 study of mRNA encoding IL12 (MEDI1191) injected intratumorally. Collaborator is AstraZeneca

mRNA-2752 finished dosing of the first cohort of patients in the Phase 1 study and has begun dosing of a second cohort. mRNA-2752, also known as the Triplet, is an intratumoral injection comprising three mRNAs encoding for OX40L + IL23 + IL36 for the treatment of advanced or metastatic solid tumor malignancies or lymphoma. mRNA-2416, OX40L only, amendment filed for Phase 2 cohort, had 2 patients with some regression in ovarian cancer in Phase 1.

Moderna has selected a new development candidate for the rare inherited metabolic disease GSD1a. GSD1a results in a buildup of glycogen in tissues and an inability to regulate glucose, leading to life-threatening hypoglycemia and long-term liver and kidney damage. mRNA-3745 is an IV-administered mRNA encoding G6Pase enzyme, designed to restore deficient or defective intracellular enzyme activity.

Three clinical trial sites are open and actively recruiting patients for the Phase 1/2 open-label, dose escalation study evaluating mRNA-3704 for the treatment of MMA, or Methylmalonic acidemia.

Moderna announced the publication of data from a Phase 1a/b study in Nature Communications showing the potential of mRNA encoding for VEGF-A (vascular endothelial growth factor A) as a regenerative therapeutic. The data supported advancement of AZD8601, which now is in an ongoing Phase 2a study led by AstraZeneca.

Dosing of the third Chikungunya Virus cohort was ongoing in Moderna's Phase 1 study evaluating the safety and tolerability of escalating doses of mRNA-1944 via intravenous infusion in healthy adults.

(mRNA-3704): The FDA has granted Fast Track designation for mRNA-3704 for MMA (Methylmalonic Acidemia). Moderna now has an open IND and is preparing to begin a Phase 1/2 open-label, multi-center, multiple ascending dose study of mRNA-3704 in pediatric patients with isolated MMA due to MUT enzyme deficiency.

Cash ended the quarter at $1.44 billion, down sequentially from $1.55 billion. Cash used in operations was $256 million. Capital expense was $18 million.

Operating expense (GAAP) of $ millon consisted of $128 million for R&D and $29 million for SG&A. Operating income was negative $144 million. $10 million interest income; $2 million other expense. Income tax benefit $0.3 million.

Q&A summary:

KRAS vaccine v. competition? Happy to see therapies emerging for the KRAS mutation. It is early days, we don't know how active therapies will be against various mutations. Our vaccine is different from emerging inhibitors, we are hoping for something more durable or even a cure.

MMA program, rollover from natural history study? We had 71 national history patients, we have not yet enrolled in the new study, but re-enrolling is a possibility.

Safety in chikungunya? Trial is ongoing, healthy volunteers, need to wait fo the data.

Triple safety? We are looking at the safety in traditional way, plus the known safety signals known from immunotherpies. It is hard to predict adverse reactions that aren't frequent, you just have to be vigilant.

Cystic Fibrosis collaboration? We do look at a range of delivery modalities. The focus is on the pulmonary disease and delivery.

CMV commercial strategy? Will talk at length about at R&D day. We want the largest label and treatable population possible.

Commercial manufacturing plan? The current facility can be brought up to commercial readiness, but will not build that out until the first product is approved. mRNA vaccine doses are very tiny.

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