Analyst Conference Summary



conference date: October 29, 2020 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2020 (third quarter, Q3 2020)

Forward-looking statements

Overview: Continues to develop clinical-stage pipeline, including the Covid vaccine.

Basic data (GAAP):

Revenue was $158 million, up sequentially from $66 million, and up from $17 million year-earlier. All revenue is from collaborations and grants.

Net income was negative $233 million, down sequentially from negative $117 million, and down from negative $123 million year-earlier.

EPS (diluted) was negative $0.59, down sequentially from negative $0.31, and up from negative $0.37 year-earlier.


Moderna now expects positive net cash provided by operating activities and used for purchases of property and equipment to be between $0.1 billion and $0.3 billion, driven by customer deposits of approximately $1.2 billion received as of September 30, 2020.

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "The Moderna team continued to execute on our plan in the third quarter. We now have four programs in Phase 2 studies, in addition to the Phase 3 study of our COVID-19 vaccine, mRNA-1273, which is fully enrolled. Our CMV vaccine showed positive interim Phase 2 data and we are now preparing for the Phase 3 start in 2021. We are actively preparing for the launch of mRNA-1273 and we have signed a number of supply agreements with governments around the world. Moderna is committed to the highest data quality standards and rigorous scientific research as we continue to work with regulators to advance mRNA-1273. I believe that if we launch our COVID-19 vaccine, 2021 could be the most important inflection year in Moderna's history. We will have the resources to scale Moderna to maximize the impact we can have on patients in the next 10 years through numerous new medicines."

Moderna currently has 21 mRNA candidates, with 13 now in clinical studies. The goal of the next phase of development is to submit multiple BLAs to the FDA.

The Phase 3 COVE study of COVID-19 vaccine candidate (mRNA-1273) conducted in collaboration with NIH and BARDA is fully enrolled with 30,000 participants, including 37% from diverse communities. The first interim analysis is due in November. Customer deposits for mRNA-1273 will be recorded as deferred revenue. Moderna made vaccine supply agreements with the U.S., Canada, EU and other countries. Announced a 50 million dose order from Japan and a partnership with Takeda.

Slide 25 shows key accounting issues related to the covid vaccine. Phase 3 study of mRNA-1273 is being conducted in collaboration with NIH and BARDA on track to complete enrollment in September 2020. Working on creating manufacturing capacity for one million doses per year, with a partner working on expanding that to 1 billion per year. Barda award (up to $483 million) for development is not cash up front, but will reimburse expenses. Has another $180 million in grant funding.

Moderna joined the NASDAQ-100 Index on July 20, 2020.

$12 million of revenue was from collaborations, $146 million from grants, but Moderna received much more in grants from the U.S. government that were not recorded as income.

Cytomegalovirus (CMV) vaccine mRNA-1647 Phase 2 study announced positive interim data in Q3 2020. The Phase 3 chart should start in 2021. Estimates annual peak sales would be $2 to $5 billion if the vaccine is approved and adopted globally.

Three new vaccines were announced in February 2020: mRNA-1345 for pediatric RSV; mRNA-1189 for EBV; and mRNA-1273 for SARS-CoV-2.

The OX40L (mRNA-2416) Phase 2 expansion cohort in ovarian cancer will focus only on the combination with durvalumab (Imfinzi). Interim Phase 1/2 data was positive, as reported at AACR.

On September 16, Moderna and Vertex announced a new strategic research collaboration and licensing agreement aimed at the discovery and development of therapeutics that leverage Moderna's lipid nanoparticles and mRNA platform to deliver gene-editing therapies for the treatment of cystic fibrosis. The three-year research collaboration initially will focus on delviery to cells in the lungs, enabling functional cystic fibrosis transmembrane conductance regulator (CFTR) protein to be produced.

On September 16, Moderna and Chiesi Group announced a mRNA therapeutics for the treatment of pulmonary arterial hypertension (PAH).

First patient enrolled in Phase 1/2 MMA (mRNA-3704) study; actively recruiting patients at U.S. sites following a protocol amendment expanding the first cohort eligibility criteria to patients 8 years and older. The FDA previously granted Fast Track designation for mRNA-3704 for MMA (Methylmalonic Acidemia).

Cash ended the quarter at $3.97 billion.

Operating expense (GAAP) of $393 millon consisted of $344 million for R&D and $49 million for SG&A. Operating income was negative $235 million. $6 million interest income; $3 million other expense. Income tax $1 million.

Q&A selective summary:

Advisory Committee vaccine comments, plans for unblinding, EUA? We feel the study participants should be able to benefit from an EUA. We are in a period of increasing transmission, so we have to find the balance of time to collect blinded data, then post blinding and still on trial. We are conversing with the FDA. We expect additional cases in December and beyond, so we will cross the threshold for determining efficacy.

Attack rate in study v. general population? My sense is the attack rates of our trial participants mirror the rates reported in their zipcodes. On par with expectations. Attack rate is not slowing down. That is worse for subjects, but gives data quicker. On the whole, the timeline is likely to stay on track.

Pricing? Not disclosing. Will differ in low income and high income countries.

Not hitting efficacy on the first interim would not show the vaccine does not work. In either case the trial will continue blinded, for a period of time, giving us better data.

Safety? We see the totality in the blinded fashion. The same DSMB sees blinded and unblinded data for all these trials.

Timing of second interim after first is likely weeks, not months, but depends on transmission rates.

Futility boundary? It would be showing it is going the wrong way, it is up to the board's judgement.

1647 global organization? We have not slowed down the rest of the pipeline. We have been hiring so we can scale the non-covid pipeline. We have hired a head of marketing for CMV.

We believe that post pandemic, there will be an endemic phase. We do not know how long the vaccines will work for, we have no way to know that, but we expect to give boosters.

Flu program? Last month we announced we would look at seasonal influenza. No timeline on moving into the clinic. We think our platform could offer an improvement on current vaccines.

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Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2020 William P. Meyers