Moderna, Inc. (MRNA) September 2026 Conference Transcript

Thanks for joining us, everybody. I'm Terrence Flynn, Morgan Stanley's U.S. Biopharm Analyst. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com backslash research disclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Very pleased to be hosting Moderna this morning. From the company, we have Stephen Hogue, the company's president. Stephen, thanks so much for being here. Really, really enjoy an opportunity to get to speak with you today. I guess first what I wanted to start off with is the INT program is front and center, and congratulations on the positive phase three adjuvant melanoma data. So maybe just talk to us about the implications of that data for the broader strategy at Moderna in terms of what does this mean for additional indications, what does this mean for leaning in on the program, just high level before we dig into some of the data questions that I have. Yes, of course. Well, first, thank you again for having us. Always a pleasure to be here.

So, look, we're obviously thrilled by the results that were announced. It's the idea of a T-cell priming approach, a vaccine, if you will, approach to treating cancer has been long promised, but this is the first time that we've been able to see a statistically significant and clinically meaningful result, as we said in our press release. It was also the first time anybody's ever achieved that kind of benefit over Keytruda in the adjuvant setting in melanoma. And that's not because there wasn't a lot of attempts. And so we think it bodes really well for the hypothesis, the scientific hypothesis that we've been working on ourselves for over 10 years, which is if you can prime T cells to see the tumor, are they able to mobilize a substantial response? And not just, you know, in combination with Keytruda, which helps with T-cell exhaustion, but actually against new and more diverse sets of tumors. And so the phase two results that we had from five years ago were exciting. We recently provided some scientific updates at ASCO, and we're looking forward to sharing more, and we're quite optimistic about the large book of work we've got with ongoing studies right now.

Great. Do these data at all change the investment opportunities? So as you ramp investments, are you guys going to lean in? Does that change the breakeven target at all? Because I imagine you have a certain number of indications you're already looking at. But how do you think about a broader rollout of this in the future?

Look, I think we are still targeting breakeven in 2028. And that has been based on the strength of our infectious disease vaccines business. We now have five products approved. I'm sure we'll talk more about it. But with approval of our flu product in the United States, our combination product outside the United States and Europe, So we're looking forward to building that franchise. And we have been investing in INT, in Kismarin, underneath that. And so, you know, we currently have a very large book of work with our partner, Merck, that includes nine ongoing clinical trials, multiple phase 3s, in fact, three randomized phase 3s in lung cancer, as well as melanoma, as well as studies we may talk about in renal cell carcinoma and bladder cancer, both muscle-invasive and non-muscle-invasive. So all of that is actually investments we've really made over the last few years, and it is baked into that perspective. The caveat becomes then, well, as this data comes out from INT, how do we respond to it? And in particular, where are the places we might go next? And those include looking at, you know, monotherapy opportunities, earlier stage disease, stage one. And, of course, where the data directs us, we'll want to be in a position to make those investments. And we're in a strong financial position thanks to the convertible debt we recently put in that we'll have more than enough on our balance sheet if the data directs us to make those investments. But we want to be responsible about it. So we're going to wait and look for data and then respond to that as we go forward.

Okay. Makes sense. Maybe we'll dig into the melanoma data a little bit here. But just wondering, I think there's an expectation we could see the full Phase III data at ESMO. Do you think that's a fair venue for this type of data? You know how these things go.

We look forward to sharing in an upcoming medical meeting, and that medical meeting will determine when they want to announce.

We hosted a KOL a couple weeks ago, and he stated that he'd consider a hazard ratio less than 0.75. 0.75 is exciting, but ideally looking for 0.65, and so as we think about that, do you think that's a fair characterization from what clinically meaningful is for this data We would agree with that.

I think those are reasonable. Again, I'd kind of come back to, you know, this is, Keytruda itself, in the adjuvant melanoma setting, is a very effective drug, and, you know, obviously Nobel Prize winning innovation, but a product that has had a huge impact on how we treat cancer. And so it's really what we compare ourselves against in this phase three trial. And so it's a very active comparator. We would want to provide a meaningful benefit, and as ourselves and Merck put out in the press release, we think we have provided a clinically meaningful benefit based on this first interim analysis. But ultimately we look for the field to sort of look at that data and make their own determinations. We also hope that that data matures. We look forward to it over time. If you think about that Phase II result from five years ago, we saw continued maturation over the full five years, and so we'll look forward to that. But can't wait to get the first round of this data out there so that PECAPOOL can start responding to that directly.

Okay. We're looking forward to it. The other question we get a lot is just read-through potential from this trial to other tumor types. And so I know you and Merck have a broad program, as you mentioned. But what are some of the other data points we should look for in this Phase III presentation that will give us insights into likelihood of success in these other tumor types that you're conducting right now?

So, look, when we share the data, the things that people want to look at is to what extent do they reproduce or look like what's happening in the phase two? And to what extent do the things that we look at new populations look similar or different? So stage of disease, you know, we have some stage two population in the phase three trial. You know, what does that look like? How does that compare against later stage, metastatic or otherwise? The shape of those curves, you know, we will look forward to understanding what's the, at what point, you know, do the curves separate? You know they separate because it was a significant result. And how does that separation shape look like over time? You know, median follow-up of a couple years now. You start to get a sense, but really maybe try to predict the future. And then, obviously, all the subgroup analyses and just understanding what we can take from it. We're, you know, based on the totality of clinical data we put out there as well as what we understand of the Phase III so far, we think it's a really exciting new space to do T-cell priming that really creating T-cell populations that can see tumors, can see these mutations specifically, does look like something that is powerful and incremental to the checkpoint inhibitors like PD-1, like Keytruda. And that's exciting because I don't think we've ever really been there. There are lots of combinations that were tried, lots of IO-IO combinations tried in the adjuvant setting around T-cell exhaustion. Think of all the other checkpoint inhibitors we saw. And we never got to something like this, even just in the top line, you know, press release we already put out. So we're looking forward to exploring all the ways in which that translates across other indications. So lung cancer is a big one. We, you know, talked about bladder and renal cell. And then, you know, for me personally, I get very excited about the stage one and early stage disease because one of the features of the product that we're proudest of, again, think about the publication that's already out on the phase two, is its safety profile. Any cancer drug is a benefit-risk calculation, but when your safety profile really isn't adding significant grade three events, grade three to five events, it really speaks to an opportunity to treat a much broader population much earlier.

And how do we think about hot versus cold tumor types? I know that's another debate. There's another competitor of yours who kind of focused more on some of the colder tumor types like pancreatic and colorectal. You guys seem to lean more into kind of the hotter tumor types. So how do you think about the read-through from hot to maybe cold or medium tumors?

So, you know, I think first what I can speak to is the data that we've already put out there, which is, you know, in melanoma, when we looked at that phase two result, all the translational data and the subsequent analyses, again, posters at ASCO and other publications, you know, a few things jumped out. We saw a favorable hazard ratio, regardless of tumor mutational burden, regardless of PD-1 status, and so favorable hazard ratios in both situations. And then there was a tumor inflammation scoring version of the same, again, where we saw an opportunity to improve upon Keytruda regardless of the background tumor inflammatory status. I think it was a couple of years ago in a poster at ASCO. And so if you take the totality of those, you kind of have to pull back and say, it doesn't feel like it's following the rules of a checkpoint inhibitor. That would make sense. It's not a checkpoint inhibitor. You know, this is T-cell priming, not T-cell exhaustion. It's, you know, it should be pioneering its own rules. I just don't know how far that goes, Terrence. Like, you know, does it, do we see that many of the other features about the tumor inflammation don't matter? We've got to go explore, you know, the stage of disease that, you know, clearly will matter. I think we feel strongly that adjuvant and earlier are places that are the most fruitful to look because you want to get down to really minimally residual disease, and then what you're trying to do is prevent a recurrence, a relapse, and ultimately lead to long-term survival. And so that's where we're focusing our energy. But I think the rules are to be discovered, and the limits around it are to be discovered. As far as other experiences, bio-intechs or others, We do such different things technologically, including the way that we're delivering at the dosing regimen, the lipid nanoparticle that we use versus their approaches, and algorithmically that I'm not sure how to compare them. I understand that it's worthwhile looking at them, but I don't think I know yet how to read through it.

The next two readouts, I think, are phase two for bladder cancer, kidney cancer. So maybe just remind us kind of design features of those studies you mentioned going early. So these are adjuvant, combo with Keytruda, but any other design features that you think are important? And then frame for us, I know you're not going to put a number on it, but just likelihood of success. Like, where's your confidence highest amongst these next, you know, set of readouts?

Look, so I think across the, there's this, what I would describe as the phase threes in lung, which are going to take a little bit more time to read out, but we're quite enthusiastic to see. Obviously, for all the reasons not small cell lung cancer, there's a huge opportunity there to continue to improve, but PD-1s have shown a great benefit. And I would highlight those as ones that were, you know, were actively working hard to enroll those phase 3s, then will be event-driven analyses. But we've really covered the gamut from a couple of adjuvant studies looking at adjuvant and neoadjuvant interventions, a stage one study, which is really going early and I think is a place even looking at monotherapy. And then we have a phase two study looking at metastatic at frontline, which will be interesting. But that's only a phase two. So we're all clearly long on lung when you look across those three phase threes and a large randomized phase two. I think if you're looking more proximally in terms of, you know, coming readouts, which I think was your question, we've highlighted RCC, renal cell carcinoma, and muscle-invasive bladder cancer as ones that are fully enrolled in event-driven trials. There is also a non-muscle-invasive bladder cancer study that's not yet fully enrolled, but all three of them are essentially approximately 300 patients randomized one-to-one against the standard of care, and particularly the muscle-invasive bladder cancer and the renal cell carcinoma, that's against Ketria. You mentioned it, but just to underscore, it's the adjuvant setting. And those are both places where PD-1, Ketria particularly, has shown a meaningful benefit. And so we know an immune therapy can work. The real question is just like we have shown in melanoma, can an alternative approach to immunotherapy in cancer, not checkpoint combinations, but something completely different, add again on top of that? And I think those are the two that I wouldn't want to characterize optimism or pessimism, but that I'm most scientifically curious about because they are essentially fully enrolled, randomized against the gold standard of care. MIBC has had some evolution in that standard of care since we've completed the study. But the readout, the value of that will still be there. And I, you know, I think on both, I'm keen to understand do we continue to add a benefit. RCC has a lower tumor mutational burden, and so many folks point to that one as the other extreme from melanoma in the current portfolio and book of work, and so we're hopeful for that. But I think we'll learn a lot from the MIBC study as well. And then I wouldn't lose sight of the non-muscle invasive bladder cancer study. That's a monotherapy study. It really gets to this idea of can you intervene early and with INT alone, which will also be event-driven, and also a phase two that could read out in the near term. So lots of data coming, and, you know, I just would tip of the hat to our team, but also Merck as a partner, the approach they've taken, we've taken for the last four or five years is to set this up as not a melanoma and then we get started, but a melanoma, and then every, you know, six months you're seeing waves of clinical data, first RCC, MIBC, the non-muscle invasive bladder cancer, several lung cancer studies, and other things coming. So it's many years of looking forward to clinical data in the program right now.

Definitely going to be an exciting period of readouts. The one follow-up on RCC before I go to some commercial questions is just, you know, I think there's been this debate about, you said lower tumor mutational burden, but maybe higher rate of indel mutations. So is that the counterpoint to that, where that maybe puts a higher likelihood of success potentially? Yeah.

I mean, they all present antigens, right? They all will be non-native antigens that your immune system or a patient's immune system will be able to use to specifically identify the cancer. And so frameshifts, indels, all those sorts of things create novel opportunities for presentation. We know that PD-1 antibodies work in the RCC context. And so you kind of know the immune system is ready. The question is, can we get it more focused on those things and the right things? So there's, yeah, it's an interesting tumor in many respects. And then frame shifts are something that we're obviously curious about more broadly. Okay, great.

These two trials, the Phase II MIBC and RCC, if, let's say, the melanoma data support an approval, does that increase the likelihood that you think FDA will be more willing to lean in on these phase two trials as registration enabling and some kind of accelerated approval pathway? I know you guys were optimistic back in the day around the phase two original melanoma data. Obviously need to generate the phase three, but how do you think about registration enablement of these phase twos in light of, let's say you do get approval on the phase three melanoma data?

So many of the aspects, so the core technology in manufacturing, and if you think of it as sort of the modules of the BLA, you know, it's common between them, right? So if melanoma is approved, you have worked out a lot of the CMC and manufacturing questions and ultimately also the safety profile of the product in large respect because it's, again, the same combination of partners. And so what you're left with is clinical evidence of, substantial evidence of effectiveness. I think that will boil down to the data, and any good regulator, but also any company should sit here and say that, right, Which is, if there's a strong benefit, you know, hopefully one that's even statistically significant, then there's really no reason why the studies can and shouldn't be registrational. They're adequate, they're well-controlled, they're against their standard of care. If they're statistically significant in terms of benefit, you've got all this other safety and manufacturing data. You know, it can and should be. Now, the question is if there's, you know, if it's taking more time for those events to accrue, if there's some reason why the study doesn't quite get to a statistical threshold. And then at that point, I think it's probably harder to believe it's registrational, but there are other pathways forward that obviously putting the data out there might allow practice to sort of begin to adopt it. But these are all data dependent, and so I think we're all just waiting for these event-driven studies to hit their analyses.

Okay, great. Maybe just moving over to the commercial side, You know, a question we get a lot from investors is just, you know, manufacturer readiness, turnaround time, scalability. A lot of chatter out there like, oh, this is going to be like CAR-T therapy. It's so individualized. You know, it's going to be very complicated. I know you guys have done a ton of work here over the last years to kind of improve that, you know, vein-to-vein time. So maybe just talk to us about where you stand from a commercial readiness standpoint and your view on scalability in the event that more indications read out positive and there's greater demand for this product?

So I think we are extremely well-positioned for it. We have not broken out a lot of the investment we were doing over the last few years. And obviously there was questions about breakeven along the way. You know that we faced. But a huge portion of that investment was building capability in INT and then running these nine global trials. As a reference point, we've treated about 3,000 patients. In the last 18 months alone, it's probably closer to 1,500 to 2,000, all delivered from a purpose-built manufacturing system, and that's in 40-odd countries. That is commercial scale because we're enrolling three Phase 3s in lung cancer and running the melanoma and five other studies in Phase 2b that we were just talking about. So we're already kind of operating at commercial scale across histologies and globally, and that's because we built in Marlboro, and I think we're going to host folks there at some point, would love to have you there, a completely new manufacturing system. It's highly automated. It is unlike anything else that maybe people have seen in the manufacturing space, and it has actually already been supplying into the clinical trials. So that facility that we have there, we are confident can supply launch. And as we bring people in, you'll see within about 12 months of lead time, we can take that facility's capacity up another sevenfold. In fact, one of seven ballrooms is built out. All the technology is licensed. All of it's built out. It's sitting in that facility. It's being used in clinical trials now. And within 12 months, we can essentially double that every time we need to. So we're very confident that we don't need more. certainly for the first few years of launch. If things really take off on us, then we'll want to talk about a second facility at some point. But this isn't, you know, we believe we can get there. We are already operating at commercial scales globally in our large global clinical trial program. And I think it's where people are different than CAR-T. I mean, you were talking about treating 100 patients in a clinical trial versus 3,000 globally in 42 countries. I mean, we're already kind of having to do something very different.

Yeah. Is that 1,500 to 2,000, is that kind of the steady-state number for that suite one, or there's more room? Much more room. There's more room in that suite one. Much more room.

We think that suite one of seven, and we'll figure out what we're comfortable disclosing in the future, but we actually don't think we need suite two for launch and still supporting the clinical trials. So we have capacity. Okay. Great. And what you'll see when you get there is there's a beautiful automation that's been built into the system. So we took everything, all of the pain and difficulty that we had, all of the engineering know-how that we learned from scaling COVID from we'd never sold a dose to a billion doses a year in 21, 22. We then pivoted in 23, 24, 25 into establishing something completely opposite in some ways, but equally technologically a marvel. and that's now paid for. It's been established. And so, again, coming from that break-even question that you asked at the beginning, we've already kind of built it all.

We were doing that over the last few years. Okay, great. I know Stefan has made some comments about potential price points of INT. So maybe just anything you can elaborate on there and then what does that mean for kind of the margins of this kind of product? Because that's another question that we get from investors is just, again, going back to the individualized nature of this therapy, does that necessarily mean a lower gross margin profile for the product?

Yeah. So it's premature to talk about pricing, notwithstanding anything Stefan might have said, because ultimately we're going to price to value, and we need to get the data out there and then have conversations with payers about that value. Obviously, the stronger the impact, the more value you create for a healthcare system, and obviously that impacts pricing. So let's get the data out, and we'll sort of talk through the specifics of it. But suffice it to say, We do believe that there's a clinically meaningful benefit here. And we have already, again, I would come back to, you know, you've seen our operations on top of everything we've been doing, scaling of respiratory vaccines business, has been baked into our P&L over the last few years. So what people probably don't fully conceptualize is the degree to which we are already doing all of this and paying for that in terms of the P&L perspective. And so as we move forward, we're pretty confident about that margin profile. Now, everything will be scale dependent. And, you know, pacing when we build out capacity and bring it online versus when there's demand there will sort of, you know, be a bit of an art in the first few years of launch as it is for any product. But if you want to talk about steady state for INT, yes, it is individualized. But the actual manufacturing technology and the actual chemical matter that goes in the vial at the end of the day is essentially the same across all of the patients. The sequence, the information is different, but that isn't the biggest driver of cost for us. And so it is not taking cells from a patient and engineering them and all the things that kind of went into CAR-T. It is much more like a traditional complex biologic, but not a cell therapy. And so we hope over time that the margins are, you know, very competitive with other complex biologics, but not cell therapy.

Okay, great. The other one that goes to, you know, it's a good segue to one of the other ones we get is just the antigen selection process. I know that's something proprietary. You guys have spent a lot of time perfecting that. Talk to us about if you do make changes to that down the road because of additional learning, let's say, and other tumor types, what that means from a kind of FDA approval process. Is this something where it's kind of like a flu-like change where you can just kind of like roll that out or do you need a whole clinical program? So that's kind of the first part. And then somewhat related is retreatment potential. You talked about metastatic. Obviously, the field has focused more on adjuvant given some of the data, but you guys still do have some metastatic trials. So let's say theoretically in a future use scenario you have a patient that received, you know, one INT for an adjuvant setting, but then unfortunately the disease relapses and metastasizes down the road, is there some reason to think that they could get retreated with a different INT product or something like that? So, again, kind of a somewhat related but two-part question.

So maybe I'll take the second part first because we – I think so. We don't have any data on it, so I don't want to create expectations. but if you ask me from a hypothesis perspective or us from a hypothesis perspective if you have a relapse and it's because the mutations that went into your INT were essentially removed from the tumor the cells that expressed those mutations were killed by your immune system then there's no reason why you shouldn't then take the new mutations and create a new product against it and so retreatment with the exact same product, probably not but retreatment with a product that reflects your tumor as it has changed to relapse? For sure. In fact, you could almost just argue that's a different cancer, even if it kind of came clonally in its distance path. And in that sense, you know, we would, you know, I look forward to the day when we have that data. I really can't come up with a reason why it wouldn't actually benefit. Again, this is about unmasking your tumor, and if it puts on a mask or loses those features that your INT was targeting, it should be valid. The first part about it, I forgot, Terrence.

So the FDA approval process for a new, like if you make, let's say, let's put it in two categories. Like one is like minor changes to the antigen selection process, but the other would be, again, I'm assuming if you're making major changes, it's definitely a totally new product.

This is the most exciting part of the field. And so we, if I, again, scientifically, we have put out at ASCO some of the data on T-cell clonality and actually showing in individual patients what are the T-cell clones that are really associated with their not having a relapse or not. And then across the population, I think there was like, you know, seven patients. We went very deep on that. But more broadly, across the population, can we start to show what's, you know, what's the mechanism of action? What's the root cause? Now, what you start to be able to do is say, now, how do I predict that clunality? And how do I, you know, that was on a phase two where we had 100 patients treated. We've got, you know, several thousand now. And in the melanoma study, you know, about 800 patients. you're going to massively expand your ability to say at a population level what are the features of these T cell clones that predict survival and we're in the early stages of looking at that but if you got to the ability to say well no actually among these hundred options there are a few here that are going to have a higher propensity to predict survival which is something we'll look very closely at with our partner Merck then you might want to do maybe a more substantive update, right? At that point, the real question, and we've been working with the FDA closely with EMA and other regulators because software is a part of the drug, to define what kinds of software updates constitute a major change and require an SPLA versus more just kind of a process change, a prior approval supplement type approach. And the basic answer won't surprise you. The more you expect a meaningful improvement in clinical outcomes, the more it starts to look like a new product, a new version of a product. That doesn't necessarily mean that you need a new clinical trial, right? And you can imagine how you use the flu example, how there's lots of instances where you change a product to make it more relevant for today, but where you don't have to go back because your product is still, you're able to look at translational biomarkers and data like I was just describing and say, look, I'm going to get you all that benefit and then some. And so we're pretty excited about that because it's a space where we think with continued improvement and ultimately the flywheel we have with more data coming in from our translational data and more opportunities to drive those improvements, that we're going to have an opportunity, again, with that proprietary data set, to really advance the field pretty dramatically and maybe even ultimately advance the label.

Okay, great. Maybe just in the last few minutes, and, you know, pretty amazing, and you've gone half an hour without talking about your vaccines portfolio. But, again, obviously a key part of the commercial business, the break-even plans, you guys now have three vaccines in the portfolio. So just talk through what that scale means as we think about the forward outlook for this. How much of an advantage does that give you versus when you were kind of a single product vaccine company?

It's transformational. We've come a long way. So you go back sort of three years ago, we were pursuing our first approval at a COVID vaccine and dreaming of a day where we would have a more diverse portfolio because flu and RSV are the other sort of big respiratory threats and then opportunities for combination that could be differentiating. So you said three products. It's actually five now product approvals that we've achieved. Obviously, COVID, flu, and RSV, of the first combination product and then a second generation COVID that has really shown in the real world as well as in its clinical trials, phase three trial and next spike, we think superior performance. And so we're excited by that. And so that just gives us, it's a completely different conversation. Most respiratory vaccines contracting is at a portfolio level. Portfolio of one is substantially inferior to a portfolio of five. that you know internationally we've established through strategic partnerships with UK Canada Australia other governments coming online the ability to offer them flexibility across that portfolio it's the big flu year you can buy more flu it's a big COVID year if you want some combo and that allows a completely different conversation with those governments and then within the United States with health care systems with pharmacies portfolio based contracting is obviously an advantage for us. So we're having our first taste of that in some ways this year. And in the years ahead, we look forward to taking full advantage of it.

Any early insights you can give us as we think through to next year in terms of how you said you've had some early learnings from that scalability. So just any insight in terms of how that's going or how to think about it? It seems like we should be more optimistic for kind of a growth, more meaningful growth inflection. I don't want to raise expectations anymore.

So our guidance for now is up to 10% growth on the top line for this year. And as we look forward towards breakeven, we kind of have retained that. We think that's the right sort of mental model for us. I think we're, you know, across the board, what we're seeing is enthusiasm for that portfolio. What's great for us is we don't need more commercial infrastructure. We don't need different manufacturing infrastructure. It's all basically, you know, diversification of our sources of revenue and gives us new products to sell into customers that are already familiar with us from COVID. I do think there are a couple of features that we're really excited to bring to the market. So flu is one and fluceva, our approved product in the United States. It is the first really enhanced efficacy profile for seniors that comes without egg-based manufacturing. You know, and 95% of flu vaccines are currently made in eggs. That matters because eggs lead to antigen drift and mismatch in, you know, in more than half of years. You know, so about half the time you'll have one of the three strains with an egg adaptation mismatch. And that was talked about at the FDA at VRBPAC. It's been talked about for decades in CDC and WHO. And we finally have a solution to that because mRNA allows us to make a perfect match to what they're targeting. So we're excited to bring that innovation into flu because we think it will add a lot of value. In Europe this year, we're launching a combo, a flu-COVID combo. So one shot, more protection. And so we're pretty excited to bring that as a way for health care systems to improve their public health outcomes without adding the cost of having to store two shots of paying for two administration fees. So there are lots of places where we think we are positively disrupting the system and hopefully will add a lot of value. Great. Well, I think we're up against time, but thank you so much, Stephen. Always a pleasure. All right. Thank you, Terrence.