Analyst Conference Summary

biotechnology

conference date: August 3, 2023 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2023 (second quarter, Q2 2023)

Forward-looking statements

Overview: Revenue down 93% y/y. Hoping for Covid vaccine revival this fall.

Basic data (GAAP):

Revenue was $344 billion, down 82% sequentially from $1.86 billion, and down 93% from $4.75 billion year-earlier.

Net income was negative $1.28 billion, down sequentially from $79 million, and down from $2.20 billion year-earlier.

EPS (diluted) was negative $3.62, down sequentially from $0.19, and down from $5.24 year-earlier.

Guidance:

Expects 2023 revenue between $6 and $8 billion, with bulk of remaining sales in Q4. $4 billion is cofirmed sales to nations, $2 to $4 billion depends on additional uptake in the U.S., Japan and EU. More on Slide 28

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "Second quarter sales were on target, given the seasonal nature of Covid. I am pleased with the progress our U.S. commercial team has made to get new contracts in place for fall 2023. We are on track to deliver 2023 sales between $6 billion to $8 billion, depending on Covid vaccination rates in the U.S. Our late-stage clinical pipeline is firing on all cylinders with four infectious disease vaccines in Phase 3, including RSV which was recently submitted to regulators for approval. Our individualized neoantigen therapy is now in Phase 3 for melanoma and our lead rare disease program for PA is in dose confirmation. We believe that all these products should launch in 2024, 2025 or 2026, and we are continuing to invest in scaling Moderna to bring forward an unprecedented number of innovative mRNA medicines for patients" The XBB.1.5 covid vaccine variant has been selected for fall sales.

Moderna plans to file for regulatory approval for mRNA-1345, Moderna's investigational RSV vaccine for older adults, in the first half of 2023. In Q4 2022 the Phase 3 trial met its primary endpoint. A pediatric trial is fully enrolled.

In Q1 2023 Flu (mRNA-1010) interim analysis from Phase 3 P301 immunogenicity and safety trial demonstrated mRNA-1010 achieved superiority on seroconversion rates for A/H3N2 and A/H1N1, superiority on geometric mean titer ratios for A/H3N2, and non-inferiority on geometric mean titer ratios for A/H1N1. Non-inferiority was not met for seroconversion rates, and geometric mean titer ratios for the influenza B/Victoria- and B/Yamagata-lineage strains. mRNA-1010 was found to be generally well-tolerated. The Phase 3 P302 trial is ongoing, which focusses on influenza A.

Moderna submitted its RSV vaccine to regulators; potential 2024 launch.

The personalized cancer vaccine (PCV) Phase 3 study evaluating mRNA-4157/V940 in combination with Keytruda as adjuvant treatment for patients began in Q2 2023. The Phase 2 primary efficacy analysis showed a 44% reduction in recurrence of death. On October 12, 2022, Merck exercised its option to jointly develop and commercialize mRNA-4157/V940 pursuant to the terms of its existing Collaboration and License Agreement.

Enrollment completed in the Phase 3 immunogenicity trial (P303) for an enhanced formulation of mRNA-1010 for flu. This updated formulation could generate an improved immune response to influenza B strains and is intended to enable licensure of mRNA-1010 through accelerated approval.

Moderna currently has 48 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. There are 3 other indications in Phase 3.

Cash ended the quarter at $14.6 billion, down sequentially from $16.4 billion. Operating cash flow negative $2.14 billion. $0.2 billion capital expense. $0.6 billion was used to repurchase 4.4 million shares of stock in the quarter.

Operating expense (GAAP) of $2.21 billon consisted of $731 million for cost of sales, $1.15 billion for R&D, and $332 million for SG&A. Operating loss was $1.87 billion. $104 million interest income; $14 million other income. Income tax benefit $369 million.

Q&A Selective Summary:

Expected sales, factors in? Key factor is how many Americans come in to get their shot. We are confident about our market share. We met with nations for advanced purchase agreements and are confident in the $2 billion second-half range.

True annual booster demand with APAs in 2024? Do not believe first half 2023 sales will repeat going forward as systems move to fall shots. Fall sales depend on the disease burden. We do have minimum volume commitments in most of our U.S. contracts for 2023.

We do expect a gradual uptake of the new RSV vaccines that have been approved. We hope for expanded uptake over time.

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