Analyst Conference Summary

biotechnology

conference date: February 22, 2024 @ 5:00 AM Pacific Time
for quarter ending: December 31, 2023 (fourth quarter, Q4 2023)

Forward-looking statements

Overview: Expects to lose money in 2024.

Basic data (GAAP):

Revenue was $2.81 billion, up 54% sequentially from $1.83 billion, and down 45% from $5.08 billion year-earlier.

Net income was $217 million, up sequentially from negative $3.36 billion, and down 85% from $1.47 billion year-earlier.

EPS (diluted) was $0.55, up sequentially from negative $9.53, and down 85% from $3.61 year-earlier.

Guidance:

2024 product sales of $4 billion. Expects to end the year with $9 billion in cash. R&D and SG&A combinded expense $5.8 billion. Cap ex $0.9 billion.

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "2023 was a year of transition for Moderna as we adapted to the endemic market. At the same time, our development team made significant pipeline advancements across infectious diseases, oncology and rare diseases, while our commercial team increased our COVID-19 market share in the U.S. We look forward to the anticipated approvals of our RSV vaccine beginning in the first half of the year. With multiple upcoming Phase 3 data readouts in 2024, we remain focused on commercial execution and continued investment in our pipeline with financial discipline." 2023 sales were at low end of guidance. Vaccination rate for 2023 in U.S. was lower than in 2022, partially compensated for by gaining market share. Downsized manufacturing footprint.

In Q3 2023 Moderna submitted its RSV vaccine mRNA-1345 to regulators; potential 1H 2024 approval (PDUFA May 12, 2023) and later 2024 launch. In Q4 2022 the Phase 3 trial met its primary endpoint. A pediatric trial is fully enrolled. Believes global RSV market is a $10 billion opportunity. Sales by competitors were about $2.5 billion in 2023. Believes single-dose prefilled syringe will give Moderna a market advantage.

In Q4 Spikevax sales were $2.8 billion. $0.8 billion was from the U.S., $2.0 billion was ex-US. Believes had 48% of Covid vaccine market share.

Six programs are now in Phase 3. By end of 2025 expects commercial sales of Covid, Flu, RSV, and Covid/Flu combo vaccines. Then a whole bunch of approvala in 2026, including in cancer and rare diseases. Next up should be flu (mRNA-1010), with three Phase 3 trials completed and intent to file with FDA in 2024.

Moderna's CMV (cytomegalovirus) vaccine (mRNA-1647) has fully enrolled its Phase 3 trial, with data expected before the end of 2024.

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.

Cash ended the quarter at $13.3 billion, up sequentially from $12.8 billion.

Operating expense (GAAP) of $2.81 billon consisted of $929 million for cost of sales, $1.41 billion for R&D, and $470 million for SG&A. Operating income was $6 million. $103 million interest income; $39 million other loss. Income tax benefit $147 million.

Q&A Selective Summary:

RSV data, competition, sales? We cannot contract until the product is approved, but we have been sharing our Phase 3 great data. In big retail pharmacies ease of administration is attractive so we have had meaningful discussions.

Possible upside/downside to 2024 revenue guidance? Upside could be Covid in Europe, where doctors want more Moderna vaccine availability. Also convincing more people to take the vaccine in the U.S. Downside would be a lower vaccination rate, and negative public health decisions ex-U.S.

CMV vaccine? No vaccine currently. Any statistically significant reduction in rate of infection would be terrific. Anything above 49.5% efficacy would meet our goal. Believes benefits for sero-positive patients, but not exploring in this Phase 3 study. Hopes label will include both because then no prior testing is needed. Will do an interim analysis, could stop them if effective enough.

Melanoma possible accelerated approval? Data so far is exciting. Saw durability. Must enroll confirmation Phase 3 study. Must establish manufacturing capability. If all three, could get accelerated. Making progress on all three.

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