Analyst Conference Summary



conference date: August 5, 2021 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2020 (second quarter, Q2 2020)

Forward-looking statements

Overview: Profitable quarter on rapid Covid vaccine sales revenue.

Basic data (GAAP):

Revenue was $4.35 billion, up sequentially from $1.94 billion, and up from $67 million year-earlier.

Net income was $2.78 billion, up sequentially from $1.22 billion, and up from negative $117 million year-earlier.

EPS (diluted) was $6.46, up sequentially from $2.84, and down from negative $0.31 year-earlier.


2021 product sales of $20 billion, based on APAs. Cost of sales 18% to 20%. Effective tax rate 10%. $450 to $550 capital investments.

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "We now have mRNA candidates in clinical trials across five therapeutic areas including infectious diseases, cardiovascular, oncology, rare disease and autoimmune disorders. We are pleased that our COVID-19 vaccine is showing durable efficacy of 93% through six months, but recognize that the Delta variant is a significant new threat so we must remain vigilant. We have begun preparing late stage studies for our flu vaccine and RSV vaccine, which received fast track designation from the FDA a few days ago and are looking forward towards our vision of a single dose annual booster that provides protection against COVID-19, flu and RSV for adults. I look forward to the start of our Phase 3 trial for CMV this year and to clinical proof of concept data in the coming quarters from our therapeutics pipeline. We believe this is just the beginning." For 2022 has already made agreements (APAs) for sales of Covid vaccine for $12 billion plus $8 billion in options. Could supply between 2 and 3 billion doses, compared to less than 1 billion in 2021. Announced first share buy back plan, for $1 billion.

Moderna is ramping up its R&D spend. It also increased selling expense to ramp up vaccine sales in Q2.

Moderna currently has 12 mRNA candidates 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, for CMV, 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. Filed a BLA in May 2021. 199 million doses were delivered in Q2 2021. COVE study final analysis showed efficacy of 93%, with no deaths in the vaccine group and efficacy continuing through 6 months. Believes a booster dose will be necessary.

A single booster dose of 50 µg of mRNA-1273 or mRNA-1273.351 increased neutralizing titers against SARS-CoV-2 and two variants of concern (B.1.351, P.1) in previously vaccinated clinical trial participants. In the Phase 2/3 study in adolescents, results were positive. Now studying in Children under 11 years old.

In Q2 2021 initiated dosing in the Phase 1 study of mRNA-6231, an IL-2 program for autoimmune disorders.

First 3 cohorts in age de-escalation study of RSV vaccine candidate (mRNA-1345) for the pediatric population fully enrolled. Received Fast Track designation from the FDA in July 2021. In Q1 2021 reported positive interim Phase 1 data. Also plans a study in elder patients.

In Q2 $4.20 billion of revenue was from product sales, $139 million from grants, and $18 million from collaborations.

In Q1 2021 dosed first mRNA-3927 propionic acidemia patient.

Cytomegalovirus (CMV) vaccine mRNA-1647 Phase 2 study announced positive interim data in Q1 2021. 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.

Continued enrollment 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 $12.2 billion, up sequentially from $8.2 billion. But $6.8 billion is deposits for future vaccine sales. Operating cash flow $4.2 billion. $30 million capital expense. Liabilities listed as $9.45 billion.

As of July 2021, considering licensing and merger opportunites. Also announced $1 billion share repurchase program.

Operating expense (GAAP) of $1.29 billon consisted of $750 million for cost of sales, $421 million for R&D, and $121 million for SG&A. Operating income was $3.06 billion. $3 million interest income; $2 million other expense. Income tax $283 million. Releasing NOLs to reduce tax rate.

Q&A selective summary:

Dynamics for 2022 and beyond, and pricing? We are increasing our capacity as the pandemic is expected to continue well into 2022. Could become booster dependent. Starting to see some countries planning for 2023, early to have a good sense of how this will evolve. 3 pricing buckets now: first 100 million US doses at $15, then 500 million $16.50. High income international $32 to $37 per dose. Low and middle income countries have received prices considerably lower than the U.S. price. For 2022 the basic framework remains the same. Average price will depend on mix, so will decrease as we sell more to low income countries. Post pandemic, market forces would impact our price.

Gene editing, gene therapy with platform? We have watched the gene editing space, including considering how we could help convey gene editing cargoes. So we are looking for new payloads, etc.

CDC booster position? We will defer to public health officials on when to give a booster. We believe current vaccines we will see declines at 6 months to 1 year, which will lead to increasing breakthrough infections, including with delta strain. Hard to predict new variants of concern, but they will come.

Orphan disease pipeline speed? We want to move rapidly to pivotal studies. We are expanding our team in that area and are prepared to accelerate if we get positive early clinical signs.

Flu? No timeline guidance yet, need more talks with regulators. It is a well-understood market where known titres provide guidelines. But we would also need to show real-world efficacy.

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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