Analyst Conference Summary

biotechnology

conference date: February 24, 2022 @ 5:00 AM Pacific Time
for quarter ending: December 31, 2021 (fourth quarter, Q4 2022)

Forward-looking statements

Overview: Phenomenal cash generation, but what is post-pandemic?

Basic data (GAAP):

Revenue was $7.21 billion, up 44% sequentially from $5.0 billion, and way up from $571 million year-earlier.

Net income was $4.87 billion, up 46% sequentially from $3.33 billion, and up from negative $272 million year-earlier.

EPS (diluted) was $11.29, up sequentially from $7.70, and up from negative $0.69 year-earlier.

Guidance:

Moderna has signed 2022 Advanced Purchase Agreements (APAs) for product sales of approximately $19 billion and approximately $3 billion in options, including for potential updated COVID-19 vaccine booster candidates. Moderna believes that the SARS-CoV-2 virus will evolve to an endemic phase in 2022 and as a result, the Company expects sales to be larger in the second half of 2022 than in the first half.

Full year 2022 cost of sales low-to-mid 20s % range. Operating expenses about $4 billion. Tax rate mid-teens %. Cap ex $0.6 to $0.8 billion.

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "Spikevax is now approved in more than 70 countries around the world protecting hundreds of millions of people and real-world evidence from multiple independent studies has confirmed its strong effectiveness. In 2021, we delivered 807 million doses with approximately 25% of those doses going to low- and middle-income countries, and we will continue to scale in 2022 to help end the COVID-19 pandemic." Moderna has been expanding its international commercial network, and will continue that in 2022.

A new $3 billion share repurchase program was announced.

Moderna currently has 44 mRNA candidates now in development. 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, $6.9 billion, is from COVID-19 vaccine mRNA-1273 (Spikevax). 297 million doses were delivered in Q4 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.

Believes a Fall Covid booster will be needed [WPM: many scientists disagree]. This should include a specific Omicron component. Also planning to study a combined flue and Covid vaccine starting later in 2022.

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 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.

Initiated an HIV vaccine Phase 1 trial in Q1 2022.

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 $17.6 billion, up sequentially from $15.35 billion. But $6 billion is deposits for future vaccine sales. Operating cash flow $na billion. $na million capital expense. Total liabilities listed as $10.5 billion. Completed prior $1 billion share repurchase program in Q4.

Operating expense (GAAP) of $1.8 billon consisted of $952 million for cost of sales, $648 million for R&D, and $201 million for SG&A. Operating income was $5.41 billion. $7 million interest income; $7 million other expense. Income tax $542 million.

Q&A very selective summary:

Rare disease regulatory path? These are Phase 1/2 studies. Looking at safety of chronic dosing first, then efficacy. Because they are small trials, need to be careful interpreting efficacy data. Will look at biomarkers and incident, hospitalization, and death reduction.

Cancer vaccine proof of concept? Vaccine with Keytruda v. Keytruda alone, should have data before year end.

We do not believe the Phase 2 flu data would, by itself, be fileable. The question is what kind of Phase 3 study is advisable. Will also look at Accelerated Approval pathway. Hopes to start Phase 3 studies this year.

Evaluating a lower Covid vaccine dose for pediatric use. Preparing a 100mg EUA filing for immune-compromised adolescents.

Emerging countries are having trouble dealing with vaccine they are receiving, but believe Q4 will be stronger than Q3 as booster becomes usable.

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