Analyst Conference Summary



conference date: February 25, 2021 @ 5:00 AM Pacific Time
for quarter ending: December 31, 2020 (fourth quarter, Q4 2020)

Forward-looking statements

Overview: Continued to develop clinical-stage pipeline. Began shipping its Covid vaccine, which got emergency approval from the FDA in January.

Basic data (GAAP):

Revenue was $571 million, up sequentially from $158 million, and up from $14 million year-earlier.

Net income was negative $272 million, down sequentially from negative $233 million, and down from negative $123 million year-earlier.

EPS (diluted) was negative $0.69, down sequentially from negative $0.59, and down from negative $0.37 year-earlier.


For 2021 Moderna has advance purchase agreements in place for $18.4 billion. Cost of sales estimate 20% of sales. Expenses in Q1 up low-double digit % over Q4, continue to rise through the year. Tax rate in mid-teens. Cap ex for 2021 $350 to $400 million.

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "2020 was a historic year for Moderna. The team rose to the challenge to address the devastating COVID-19 pandemic in less than one year with our authorized vaccine. It is encouraging and humbling that more than 32 million doses of our vaccine have been administered in the U.S. and that millions of people around the world have been vaccinated with our vaccine to date. 2020 demonstrated the power of harnessing mRNA to make medicines and also demonstrated the speed and scalability of the Moderna platform that we have built over the last 10 years. I believe that 2021 will be an inflection year for Moderna. We previously believed that mRNA would lead to approved medicines, and we were limited in our ambitions by the need for regular capital raises and keeping several years of cash to manage financing risk. We now know that mRNA vaccines can be highly efficacious and authorized for use, and we are a cash-flow generating commercial company. We opened commercial subsidiaries in 8 countries in 2020 and plan to add Japan, South Korea and Australia in 2021. We plan to accelerate and significantly increase our investments in science and grow our development pipeline faster. By executing on our 2021 priorities, we will advance our mission of delivering on the promise of mRNA science to create a new generation of transformative medicines for patients."

Moderna created a global commercial network around mRNA-1273 during 2020.

Moderna currently has 24 mRNA candidates, with 13 now in clinical studies. The goal of the next phase of development is to submit multiple BLAs to the FDA. Other than the Covid vaccine, the most advanced candidate is preparing for a Phase 3 trial.

The FDA granted an emergency use authorization of COVID-19 vaccine candidate mRNA-1273 on December 18, 2020. Since then received emergency/conditional approval in Canada, Israel, European Union, United Kingdom, Switzerland, Singapore, Qatar, plus, total 37 countries. Raised lower end of global manufacturing plan for 2021 to 700 million doses; making capital investments to increase capacity up to 1.4 billion doses in 2022. Studies in adolescents and young children are underway. Next generation 1283 developed.

The first cohort in the Phase 1 study of hMPV/PIV3 vaccine candidate (mRNA-1653) has been fully enrolled.

First 3 cohorts in age de-escalation study of RSV vaccine candidate (mRNA-1345) for the pediatric population fully enrolled. Also plans a study in elder patients.

In Q4 $30 million of revenue was from collaborations, $341 million from grants, and $200 million from product sales.

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.

Moderna is planning to begin a Phase 1 study of mRNA-1189 for Epstein-Barr virus in 2021. There is no approved vaccine for EBV.

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).

Numerous other vaccines are at various stages of development.

Cash ended the quarter at $5.25 billion, up sequentially from $3.97 billion. Liabilities listed as $4.78 billion.

Operating expense (GAAP) of $846 millon consisted of $8 million for cost of sales, $759 million for R&D, and $79 million for SG&A. Operating income was negative $275 million. $4 million interest income; $0 million other expense. Income tax $1.5 million.

Q&A selective summary:

Dosing strategy for boosting? 50mg would be a third dose, so a lower dose likely is necessary because the immune system has been primed. Earlier data supports this. We think that 50mg could suffice even for priming.

Delivery of additional doses? We have been cautious in projections because this is a first for mass manufacturing mRNA. There are many unknowns, but we felt we could up the base case given what we know now.

$200 million in Q4 revenue, how many doses for that? Was 17 million deliveries to the government in the U.S.

Pricing strategy for 2022? Not disclosing yet. We have a high-efficacy vaccine, being compared to other companies' vaccine. Will share more as time progresses.

Time to approval for a variant vaccine? Clinical program would be pretty straightforward, patients in the hundreds. So relatively quickly.

Believes adeno vector based vaccines not likely to produce the boost provided by mRNA vaccines.

Discussions with governments have shown they are aware of the differences between vaccines, we wish we had planned for more capacity last year.

We should eventually be able to use our new manufacturing for therapies that are further down the pipeline, starting with the CMV vaccine.

Any raw material constraints seen for Moderna? We do need consumables, we can't make a product unless we have all of them. We planned and executed well on this in 2020, when we ordered some supplies at quantities of 1000x or more of our 2019 orders. So we had to pay upfront and buy what they needed to increase production. We have the occasional sleepness night, but so far to good.

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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 2021 William P. Meyers