Analyst Conference Summary

biotechnology

conference date: May 4, 2022 @ 5:00 AM Pacific Time
for quarter ending: March 31, 2022 (first quarter, Q1 2022)

Forward-looking statements

Overview: Revenue declining post-pandemic.

Basic data (GAAP):

Revenue was $6.07 billion, down 16% sequentially from $7.21 billion, and up 213% from $1.94 billion year-earlier.

Net income was $3.66 billion, down 25% sequentially from $4.87 billion, and up 200% from $1.22 billion year-earlier.

EPS (diluted) was $8.58, down 24% sequentially from $11.29, and up 202% from $2.84 year-earlier.

Guidance:

Has advanced purchase agreements for 2022 of $21 billion. R&D and SG&A expenses about $4 billion. Cap ex $0.6 to $0.8 billion Tax rate mid-teens.

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "Today, we are reiterating our signed advanced purchase agreements for 2022 of $21 billion. In the second quarter, we expect to have four programs in late-stage Phase 3 studies including our Omicron-containing bivalent COVID booster, seasonal flu, RSV and CMV vaccine candidates. Beginning in the fall of 2022, our robust Phase 3 pipeline could lead to three respiratory commercial launches over the next two to three years. We also look forward to advancing our therapeutic programs and sharing proof-of-concept readouts on our rare genetic disease programs for propionic acidemia and methylmalonic acidemia, and on our personalized cancer vaccine program this year." Focus now is to bring more products to market, and expand the pipeline, so as to not be dependent on the Covid revenue.

In Q1 2022 Moderna submitted a EUA request to the FDA for a 25 µg two-dose primary series of Covid mRNA-1273 in children 6 months to under 6 years of age; similar requests underway with international regulatory authorities.

In Q1 2022 Moderna reported positive Phase 2 interim analysis of seasonal flu vaccine candidate mRNA-1010. The Phase 3 study in the Southern Hemisphere expected to begin in the second quarter

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 is from COVID-19 vaccine mRNA-1273 (Spikevax). million doses were delivered in Q4 2021. 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. Advanced Purchase Agreements for 2022 are $21 billion.

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.

In Q1 $5.93 billion of revenue was from product sales, $126 million from grants, and $15 million from collaborations.

Initiated an HIV vaccine Phase 1 trial in Q1 2022.

Numerous other vaccines are at various stages of development.

Cash ended the quarter at $19.3 billion, up sequentially from $17.6 billion. But $ billion is deposits for future vaccine sales. Operating cash flow $2.8 billion. $132 million capital expense. Total liabilities listed as $ billion. $623 million was used to repurchase stock in the quarter.

Operating expense (GAAP) of $1.84 billon consisted of $1.02 billion for cost of sales, $554 million for R&D, and $268 million for SG&A. Operating income was $4.23 billion. $15 million interest income; $13 million other expense. Income tax $572 million.

Q&A very selective summary:

Covid annual boosting? Bivalent platform, including omicron, is most exciting. Aim is to provide at least 6 months of protection. It would be seasonal, given in the fall in the northern hemisphere and in (our) spring in the southern hemisphere. So once a year, and of course the strain targetted could strange.

Business development? We have four programs in Phase 3, many more in earlier development. Now that we have capital we are accelerating our development, including cancer and autoimmune, including with partner Vertex. For M&A we are looking at a lot of opportunities around the world. Another priority is to buy back shares.

Upside and downside to Covid revenue this year? In the $21 billion there are orders that are not yet confirmed, that is the main cause of uncertainty, especially in timing. But we also are in discussions with nations not included in the $21 billion. There is also the question of variants addressed.

For flu, we believe there is a potential path to accelerated approval, at least in some matters. We will need to generate the data and have discussions with regulators. We will eventually need full approval in any case, so we are planning a Phase 3 study in the northern hemisphere in 2022.

Prices going forward, by region? Disclosed range in 2021, that continued for 2022. Net price is impacted by the customer mix. Prices are lower in undeveloped countries. As the market moves from public to private, prices tend to increase.

Q2 2022 is likely to be the lowpoint in 2022 for Covid revenue, believes will be higher in the second half.

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