Analyst Conference Summary

biotechnology

conference date: November 4, 2021 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2020 (third quarter, Q3 2021)

Forward-looking statements

Overview: Astonishing increase in revenue, but still below expectations.

Basic data (GAAP):

Revenue was $5.0 billion, up sequentially from $4.35 billion, and up from $157 million year-earlier.

Net income was $3.33 billion, up sequentially from $2.78 billion, and up from negative $233 million year-earlier.

EPS (diluted) was $7.70, up sequentially from $6.46, and up from negative $0.59 year-earlier.

Guidance:

Full 2021 product revenue is now expected between $15 billion and $18 billion.

For 2022, Moderna has already signed $17 billion of advanced purchase agreements, with total revenue as high as $22 billion.

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "We are humbled to have helped hundreds of millions of people around the world with our COVID-19 vaccine and yet we know our work is not done. We will not rest until our vaccine is available to anyone who needs it, and we are working hard to ensure our vaccine is available in low-income countries with approximately 10% of our 2021 volume and significantly more of our 2022 volume going to low-income countries. It is promising to see the real-world evidence showing that the Moderna COVID-19 vaccine shows sustainably high, durable efficacy."

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.

All product revenue, $4.81 billion, is from COVID-19 vaccine mRNA-1273. 208 million doses were delivered in Q3 2021. Interim data in the ages 6 to 12 study showed 100% efficacy. The FDA, EMA, and other health agencies around the world have authorized a booster dose of the Moderna COVID-19 vaccine at the 50 µg dose level in Q3 or early Q4 2021.

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 trial started in Q3 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 $15.35 billion, up sequentially from $12.2 billion. But $6.7 billion is deposits for future vaccine sales. Operating cash flow $3.3 billion. $99 million capital expense. Total liabilities listed as $10.8 billion. No share repurchases in Q3, but $1 billion authorized.

Operating expense (GAAP) of $ billon consisted of $722 million for cost of sales, $521 million for R&D, and $168 million for SG&A. Operating income was $3.56 billion. $4 million interest income; $10 million other expense. Income tax $219 million.

Q&A very selective summary:

2022 supply aspects? Short term we can fix our supply issues. They come from scaling so fast. Future issue is shipping to countries with difficult infrastructures. Could make up to 3 billion doses in 2022. Drug substance will not be an issue, so there could be upside to those numbers. Most people on earth have not received their first dose yet. Then we may also have to react to variants.

Myocarditis, why your vaccine more than Pfizer's? FDA has asked for more time to review emerging data. Pfizer was authorized for adolescents before the risk was known. Both mRNA vaccines may have some risk of myocarditis for 18 to 24 year old males. So the difference is a function of timing. We have not seen an increased rate in our vaccine for 12 to 17 year olds.

Flu vaccine efficacy v. traditional vaccines? We will continue to try to identify the optimal dose. We have high expectations. Our stategy is to combine flu and covid boosters and RST in a single dose.

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