Good afternoon, everyone. Thank you so much for joining us. It's my pleasure to introduce Moderna. And with us, we have Jamie Mock, CFO. Jamie, thanks for joining us.

Thanks for having me.

So to start here, maybe frame for us how you see the company positioned today. There's been, you know, an evolution, I think, with regard to the growth outlook for the commercial business with COVID and combination flu plus COVID vaccines, where you've, you know, gone to the point, I think, here of a kind of returning to this positive revenue growth cycle. And you have an opportunity set with your late stage pipeline. So what are you most focused on when you look at this from a strategy and execution standpoint as we head into second half and beyond?

Yeah, great. Well, again, thanks for having me. Good to see you, Salvin. So, yeah, we're super excited. The last three years have been hard, but we've been hard at work really trying to build the next chapter of Moderna. And so that chapter, I think, is defined by growth, diversification, and really an improving financial profile as well. um and so from the growth and diversity perspective uh if you look at we're going to have market expansion across the globe with our commercial products as you just mentioned uh we will grow from a product diversity perspective and i'll kind of walk through some of these so we're i think we're really set up and i we think we started that at the beginning of this year and i'm sure we'll get into some of the financials and that kind of thing but we laid out 10 growth drivers a handful of months ago and over the course of 2026 through 2028 we think can be pretty substantial and so in 2026 we think that's amnex spike which is you know more have better relative vaccine efficacy versus spike facts had tremendous share last year for its first year was approved in june had 24 share in retail so we were excited by that and we hope to grow on that and then our international partnerships in the uk canada australia in 2027 and we can talk about it more we get europe opens up for us we have a flu padufa date this year that we hope to sell in 2027. We've announced some other market expansion opportunities, particularly in Latin America, but we're working across the globe as well. And then 2028, additional product expansion, hopefully with norovirus, which I'm sure we'll get into, as well as the combination vaccine in the U.S. And that's just infectious disease. Then we have INT, which I'm sure we'll talk about, 4359, as well as rare disease. So we're really set up for growth. I think underpinning that really, though, is really financial, is disciplined execution. And that's commercial, that's R&D, that's CMC, and I think that's really starting to show up in the financial profile, and I'll just mention a couple things. So first, over the last two years, we took out nearly $5 billion in cost and investment. So in 2023, we were at $8.9 billion. Last year, we were $4.3 billion, so over 50%. And we've been trying to really make sure we navigate this so that we can grow in this next chapter, that we still are investing. So that's the tricky balance. So, of course, you can find efficiencies, But we also wanted to make sure we were making the right investments for this next chapter, which is here, which is what we're so excited about. And we ended the year with $9 billion in cash and liquidity, which was ahead of our profile. So I think the execution has been terrific. We've set up this next chapter. We're in the midst of it right now. So and I think big picture strategy, what we're trying to do is build an infectious disease business that is leading in its place with various vaccines. that is a cash cow, generates a lot of cash and has a lot of growth over the next few years and then invests that into oncology. And so we hope to diversify and have additional therapeutic areas in the next couple of years and really a vastly improving financial profile. So that is what we are focused on. That's what we've been focused on for the last three years and we're in the midst of it.

On the 1Q earnings report, you reiterated expectations for up to 10% year-over-year revenue growth with guidance accounting for potential decline in U.S. COVID vaccinations. Now that the winter respiratory virus season has ended, do you have any more granularity on expectations around next season? And what are the puts and takes on the revenue guidance and where there could be upside?

So I think it's important to start with 2025. And in 2025, we had $1.2 billion of revenue in the U.S. and $700 million of revenue for U.S. And we said we were going to grow, we will grow up to 10%. We hope to beat that, but that's what our guidance is, so that's $2 to $2.1 billion. And we said we are going to be 50-50 geographically split U.S. versus OUS, so roughly a billion dollars each. And what are we thinking outside the United States? So in the United States, this year at some kind of midpoint here, that really takes into account a couple things. One is vaccination rate decline, and so you were just mentioning, you know, what happened in the winter season. So if you look at fall last year, it was down 27%, but fall was a wild time. There was many different reasons. I'm sure we can get into it if we want to. But if you look at the spring booster, it's actually improved quite a bit. So it's encouraging the trend in terms of it's a small sample size. So nonetheless, we've provided for vaccination rate declines again in the fall of 2026 and winter of 2027. So we've kind of sized that in to be prudent. What could offset that, though, is everything I talked about in terms of M-next spike. So if we can grow share, particularly in retail, we were 24% share overall last year. If we can grow that, that's great, number one. Number two, it comes at a higher value. So that's the U.S. dynamics. If it really comes down to the upside question, what happens to vaccination rates? We plan for a sizable decline, relatively speaking. And what happens to MNX bike share and how much penetration can we have? Outside the United States, we were $700 million last year. And I talked about these international strategic partnerships. And you saw that in the first half already this year. So in the first quarter, we had $400 million in revenue. We said there was $200 million in the U.K. That's just for the spring booster. We're going to have another fall campaign as well that we'll supply for. So that's substantial growth. Last year, we had next to no revenue in the U.K., and now all of a sudden we have $200 million in the first half alone. So when you step back, I just want to really simplify the math for people. So we guided to $450 million to $500 million in the first half. And last year we did $250, so that's up $200 to $250 million. On $1.9 billion, that's 10% plus by itself if we're just flat in the second half. So if you're just flat in the second half and how do you get to flat, that's if the U.S. comes down a couple hundred million dollars and U.K. backfills. Really simplify it. That's why we're so confident in growth this year. Up to 10%, and we hope to do better.

You're also still guiding to cash flow break even in 2028. Can you walk through what's needed from an OPEX and revenue standpoint to achieve it, Moderna's ability to be flexible on the spend side, and your confidence in meeting this goal?

So I've always said that this is both a revenue increase story and a cost decline story. And so I'll start with revenue. I already kind of laid out all the variables. But just to maybe emphasize just how big these are, because I said substantial. I mean, there's 10 variables for several hundred million dollars each. So if we have a 50% head rate, and it's a couple hundred million each, that's a $3 billion plus business. And so that's kind of the revenue side. You have to assume, what do you think these 10 things are going to do? If you've got a 50% head rate, you can be at least a $3 billion business. If you hit on all of them, it could be much more than that. And that's kind of the revenue side. We've kind of obviously got to grow over the next two years. On the cost side, we've already guided to 2027 because we have such clarity of what we want to do. And we guided the $3.5 to $3.9 billion of cash costs. So that's down another $400 to $800 million from last year, ending point. And so we're trying to manage what is that growth line and what is that cost line. And let me say one more thing about 2027. We know what we're going to take out. There's efficiencies that we're going to go have. There's phase three trials that are going to run off. So that's obvious to us. Then it comes down to this choice of, okay, how are we growing? How much are we going to invest? We're building the next chapter. How are the readouts happening? What investment level do you want to make? And, of course, you can always drive efficiency to some degree. But that becomes more of a choice come 2028, and that's why we haven't guided 2028, which is let's see where the revenue line is, let's do the things that we know will happen on the cost side, and then let's make a choice based upon the data that we're seeing on readouts, the execution on commercial sales. So that kind of paints the picture of, you know, what has to happen on it.

Perhaps we can pivot over to your pipeline. So, in TISMORAN data, you recently presented five-year follow-up data and adjuvant melanoma at ASCO. Just to level set, remind us the high-level takeaways here and the importance of the translational data that was presented.

Yeah, I'm glad, yeah. It's quite an exciting year for in TISMORAN, for both March and Moderna this year. And so, I think the key, there's two punchlines, but, you know, the headline, I would say, is that antizmoran continues to be a strong benefit, a meaningful benefit, a durable benefit. So we now have five years data that we're seeing the same recurrence-free survival rate at 49% improvement. We saw it at three years. We saw it at five years. So we're really encouraged by the consistency of that, point number one. You mentioned translational data, point number two. So now this is the first time we actually try to show what is the underlying biology and how is it affecting the clinical outcome here that we're seeing. And what we saw is that tumor-targeted immune responses are better within Tizmaran versus K-Trudel alone, and that's largely due to T-cell clonal expansion as well as the number of T-cell clonal types that you have. And we saw like a 2X-fold improvement on those patients that survived till five years or were recurrence-free till survive for five years versus just K-Trudel alone. So that gives us a lot of confidence in the underlying mechanism of action behind this overall program. And that's why Merck and ourselves have invested so much behind this program and various indications, and we're pretty excited by it.

What is your confidence level for success on the Phase III interim study that's reading out in the second half and maybe in the context of the Phase II results translating to Phase III but being able to get it on an interim versus a final analysis?

Yes, I won't assign a probability to it. I'll just say a few things. One is, obviously, we're super encouraged by the Phase II results. We're super encouraged by seeing some amount of translational data that, you know, supports the program. And I think this isn't a transient response now. This is now five years that we're seeing this kind of impact. That's a very long time. So, you know, it's a Phase II. It's 107 patients on INT versus just K-Trudeau alone. But that gives us a lot of confidence in what's going on. And, again, you know, we've continued to invest. Both Merck and ourselves have continued to invest. So I won't assign a probability to it, but we are quite encouraged. On the interim point, I mean, we've set up the Phase 3 to have numerous readouts. So I don't want to dwell on just the first interim analysis. Of course, we are hopeful and optimistic that it will be just as successful as, you know, what we've seen on the Phase 2. But there will be other data points, and we will look at the totality of the data in terms of DMFS and RFS and how long from a durability standpoint. So there's other things to look at, but hopefully, you know, the first interim analysis will be strong as well. If you had to speculate, what are the key risks here to the first interim, that phase three not working? oh geez uh i'm probably not the best person to speculate on the risks of uh why it wouldn't you know be that well but i mean you know we always talk about it that you never know in clinical development until you actually get the data so what we've seen is very strong very durable and very consistent and so that gives us a lot of confidence but you never know development being one and then you know it's the first interim like i just said you know uh but if you know if i step back, this trial was enrolled in very quickly. So I think that speaks to investigators and patients and just how encouraged they are and optimistic they are by this therapy.

The commercial opportunity here for this drug in adjuvant melanoma, but also lung and RCC, or where we have the best line of sight to data so far.

Sure. So all three of those are going to be multi-billion dollar opportunities. Merck and ourselves have not yet released what we think the addressable size will be, but they're quite sizable and we're really excited. And so we think overall, if this works across a lot of indications, it can be a very large product and platform that is, and very meaningful from a revenue standpoint, but we haven't given specific estimates yet.

How are you accounting for this asset with Merck? Will you recognize it as top-line revenue, and how will commercialization expenses be split?

Yeah, that's a great question. Yes, it will be top-line revenue for us. I'll come back to that because that's a little bit more complicated. But broadly, it is an overall we share the economics 50-50, split down the middle. So at the end of the day, the cash is reconciled to make sure that both partners are in on it or benefiting from it from a 50-50 standpoint. So the commercialization expenses are actually much easier. It will be 50% on Merck's P&L, 50% on our P&L. The reason why revenue and gross profit is a little bit more complicated is because we're manufacturing the products, we are selling it to Merck because they are the market authorization holder, and then they will sell it on to the end customer. And so we'll recognize whatever our COGs are with revenue because Merck will pay us for the COGs, and then that gross profit split, split 50-50, will be added on top of our COGS in revenue for extra revenue. So it won't be 100% of the revenue on behalf of Moderna. Merck will recognize 100% of the revenue. We will not recognize 100% of the revenue. We'll have something in between, and we will recognize the full COGS as well.

Is there any commercialization effort from your side, or is the sales force fully on the Merck side here?

There's an agreement to jointly commercialize in some areas to a small degree, but I would say the lion's share is certainly on Merck's side. Go ahead.

At your analyst day, you discussed a line-by-line expansion strategy for manufacturing. Can you touch on what this means and how it leads to efficiencies over time?

We're super excited, and the team did an amazing job. We have a facility just outside of Boston in Marlboro, Massachusetts, that is a standalone facility only for INT, and it was purchased and built in a matter of two years. And what, to your point, we said it's a line-by-line strategy. So the facility has the ability to have seven lines. We've only built one of those lines, and that was very intentional for two reasons. The first reason is, why invest if you don't have the demand for the second, third, fourth, fifth, sixth line? Don't spend the money yet, so that makes sense. It just keeps our overall cost down and a better return. But then more importantly is the ability to drive additional productivity. So we are continuous. We already have three phases of how we are going to manufacture this product from inception, you know, that we've been doing for our clinical trials. We have a second phase that is already in Marlboro right now, and then we already have vision for a third phase. And what do I mean by that? So what I mean by that is think the footprint of the boxes to manufacture these are much more automated, so therefore less labor, and much smaller footprint. So you can get a lot more throughput through the lines, and therefore your cost comes down as well. So as we have the demand, hopefully, for a second, third, fourth line, we'll be able to put in the latest technology. And therefore, the overall cost of goods sold will come down because it will be the latest technology on the second line. And we have already started to envision a fourth line, frankly. And so that's the key to making this as efficient as possible, and most importantly, to give it as much market access as possible across the globe. drive our cogs down.

And could you discuss the cost component here of manufacturing, noting it's a personalized product? How should we think about margins initially and longer term?

Yeah. So we're very confident that the initial margins will be solid and the long-term margins we have, based on what I just said, we have a lot of productivity roadway here. And I think that's natural in a product like this, and I've seen it in other industries as well, that you will continuously automate, take labor out, make it simpler, make it smaller, and so therefore the cost of goods sold should go down. To step back and just think on behalf of Moderna in terms of margins, they will start from a rate perspective smaller, but a revenue perspective higher, because you're selling at a cost of goods sold that's higher. So if you have to do that and then you split the gross profit on top of that, you actually have more revenue but less margins. Then as costs come down, you don't sell as much from that initial transaction with Merck, but then you get a greater portion of the gross profit split, so your margin rate goes up. But the revenue per patient comes down a little bit over time. So that's the way to think about it. But as the patient ramp goes up, that will more than offset the small decline on a revenue per patient basis, and the margins will improve over time.

What is the view from Moderna at this point on the read-through from INT and adjuvant melanoma to other distal tumors, like lung among others, and the confidence that this is going to translate beyond?

Yeah, we get that question a lot, rightfully so. So INT wasn't really made just for melanoma. So that's how we think about it is it wasn't designed for melanoma. It was designed for cancer, and it was designed to target specific neoantigens on a tumor cell and train the immune system to attack it. And so we're hopefully seeing that already in our phase two with melanoma. Should that work, and the biology is different to some degree, but the same premise should be there for other indications, albeit that biology can change and maybe you have different neoantigens and that kind of thing. So we are optimistic that that mechanism of action and what we just showed in terms of translational data at ASCO can apply to numerous indications. And again, that's why I think we have 10 trials going on right now. And us are confident that this could work and starting to invest aggressively behind it.

And we're on track to see phase 2 data on renal cell carcinoma and non-muscle invasive bladder cancer this year, too?

I don't think we've given an exact date. There's a chance, I mean, if you look at events and that kind of thing, but we have not said that specifically, that we would have renal cell data in 2026. neurovirus here.

So can you discuss the commercial opportunity for the phase three asset here and where you'll likely have data this year and your confidence here that this could be successful?

Yeah, this is an important product for us. And so as I said earlier in my initial remarks, you know, we want to build a leading vaccine franchise in infectious disease and we want to have various products to bring to patients and customers. And so having two COVID products, one RSV, flu, hopefully later this year, our combination vaccine was approved in Europe. Adding norovirus to it where there is no other vaccine is really a competitive advantage, and so we're quite encouraged by that. So maybe to speak to the commercial opportunity. The burden is pretty severe with norovirus. And I think there's 20 million cases a year. There's nearly 1,000 deaths. There's maybe 100,000 hospitalizations. So it's severe, and anybody that's had it, I think, knows that. And so the burden is obviously substantial. We think the patient population that we would target is a little over 150 million individuals in the United States. Think older adults that get dehydrated, and it really impacts, if you're in a hospital, it really impacts you even further. so older adults think occupational therapy, health care workers where it might spread but if we even got a fraction of that a fraction of $150 million from a vaccination perspective that would be a very sizable opportunity to which there is no competition so I say it's an important product I think it's very meaningful from a revenue perspective and so that's that and the second part was on the trial and our confidence around it so we'll see you know we'll see this year we know that we believe it'll happen this year that there will be enough events that it'll read out and oh from approval perspective you know what we see is where there is no other standard of care anything that has relative vaccine efficacy of 50% above versus placebo normally is encouraged and approved so that's kind of the limit that we're looking for is to be above that and we hope to bring it to market in the not-too-distant future, and we've said hopefully by 2028.

On the forward trajectory here for the COVID vaccine, given Pfizer's pandemic-era contract in the EU will expire this year, that geography could meaningfully contribute to your growth in 2027+, as you mentioned. Can you discuss the size of the market and your strategy here to gain greater share and what steps you can take now for success?

For sure. There is a lot of active work going on right there. So to cite the market, the flu market is about a billion dollars. These are our estimates in Europe in the year 2027. COVID market, again, in the year 2027, from an actual demand perspective, there might be greater sales going into it right now, but we think it's a $700 million market, and RSV is like a $100 million market. So a $1.8 billion market, pretty substantial, to which we have less than $100 million, is what we've said. So So even 20%, 30% share across that would be pretty substantial for us. So that's kind of the market size. In terms of where we are, so number one, I mentioned earlier, we got our flu plus COVID vaccine approved in Europe, so we're excited to bring that to market next year. We got MNEX spike approved as well. So we're kind of ready to go. And so what are the actions we're taking now? Europe is normally a single-payer system where you go tender by tender with countries that are the decision makers. So we are working with them right now to shape tenders. The second thing is you need to work with health authorities and NITAGs to make sure that you have the right recommendation, as well as reimbursement. So we're working with various countries across Europe to make sure that when the tenders come out at the beginning of 2027 or maybe even some of them come out late 2026, we have market access and we have two products approved that we can go compete in. So, yeah, I mean, 20%, $360 million versus less than 100, it's another couple hundred million dollar growth, maybe $300 million growth driver for us. So that's why I keep going back to you have to believe that, you know, if we get 50% of these hits, you know, we could be above $3 billion, and we've already motioned that where our cost, you know, could go at least in 2027.

And your flu-COVID combo vaccine, M-Combriax, was approved in April by the European Commission as the first COVID-flu combination. While not included in revenue guidance for 26, can you speak to the commercial launch preparation underway, the kind of education and patient access efforts needed, and your expectations for top-line contribution in 2027 plus and expectations on timing for approval in the U.S.?

I kind of sized the market in Europe already, flu being a billion, COVID being 700 million, so call it a 1.7 billion. And so first, you've got to shape tenders to actually allow for a combination vaccine as opposed to discreetly COVID or discreetly flu. So whether that is large in the first year or takes time to develop and maybe have additional competitors also, we'll see. But that's, you know, number one. And then it's the same things I just talked about in terms of reimbursement and getting recommendations and that kind of thing. So that's kind of the size and the tender process. I think what's unique, though, and what we're trying to educate on is it brings a lot of simplicity. It brings simplicity to the health care system because they don't have to run two campaigns. They don't have to run a flu and a COVID campaign. You can run one campaign, so that should simplify things and increase compliance, frankly, as well. And it's better for patients as well so that instead of going and having two vaccination appointments, you can have one vaccination. So that's really what we're trying to educate every country and every health authority in Europe right now. And I think it's resonating well. We'll see how much it can grow over time, but, you know, it could be a very substantial opportunity over time.

For flu itself, you have an August Fidufa date for the seasonal flu monotherapy vaccine, which you expect to start contributing to revenue in 2027. How big is the U.S. market for an mRNA flu vaccine? I mean, we know how big the flu market is, but what is the willingness to take an mRNA version?

Well, that remains to be seen. Yeah, so you know it's a sizable, enhanced dose market. That's what we'll play. What we think we're bringing is a lot of innovation to this space. And I think, actually, we got quite a bit of education on that over the recent history because of everything that transpired around this. So the fact that – and why do I say we're bringing innovation to the space? So we're bringing innovation to the space because the current flu vaccines take a long time to produce. And since they take a long time to produce, you have to pick the strain well in advance of the actual season. Whereas with mRNA, the innovation is you can be ready in 60 days. And so you can pick a strain that is more likely to circulate during the actual season and perhaps have a better impact and a better clinically meaningful impact to patients because it could be more effective. So I don't know exactly the consumer angle on that, but, I mean, you know, I think people recognize that a better strain-matched vaccine, if allowed, could be much more effective. And, you know, the burden of flu is still in the tens of millions of people in the United States. The hospitalizations are in the hundreds of thousands. The deaths are in the tens of thousands. And so it's very meaningful, but we have to continue to educate on what that can mean, and we're excited to bring the innovation to the flu market.

On the education front, in the context of just the use of mRNA during COVID and to the period now, how much education do you need to do on side effects and safety just to have people recalibrated to real-world data as it exists today?

So we've done a lot of that, and we publish everything. We're super transparent on our website to make sure every single, you know, in our view, myth that is out there. Look, last year we had 40% to 45% market share. So that tells you 40% to 45% of the people that are willing to get vaccinated are willing to get our vaccine. I get that, you know, our competitors also mRNA. But maybe then the better metric is look at COVID to flu. I mean, there's still over 30 million people that are getting a COVID vaccine that is mRNA right now. So hard to say we try to debunk it, you know, what will come of that. It's a journey, I would say, but we're we stand tall behind our science and we put it out there transparently. And there's still, you know, at least 30 million individuals that are willing to get an mRNA vaccine at this point. And hopefully if the flu vaccine is better or a combination vaccine is more effective, then maybe that will grow over time. and maybe the sentiment will change over time in the country and the world.

Jamie, as a last question, anything we didn't touch on that you want to highlight?

I think we touched on all the really pertinent stuff for the next three years, which is our next chapter, and that is what I know is on investors' mind, and rightfully so, particularly since the journey we've been through. That said, there is a lot going on behind the scenes for the chapter after that, so to speak, which is why we are having a science day on June 25th. But there's been conscious and disciplined investment around our science, around our platform, and around programs. We announced one this morning, or last night, I think. So there's more to come beyond this chapter, but we've got to get this chapter right for sure. That's what we're focused on. The only thing we didn't touch on is there still is a lot of great work going on for the next chapter as well.

With that, thank you so much. We appreciate the time.

Yeah, thank you, Selvin.