Moderna, Inc. (MRNA) 41st Annual J.P. Morgan Healthcare Conference (Transcript)

Moderna, Inc. (NASDAQ:MRNA) 41st Annual J.P. Morgan Healthcare Conference January 9, 2023 5:15 PM ET

Company Participants

Stephane Bancel – CEO

Conference Call Participants

Jessica Fye – J.P Morgan

Jessica Fye

Hey, good afternoon, everyone. My name is Jess Fye. I’m the large-cap biotech analyst at J.P. Morgan, and we’re delighted to be continuing the conference today with Moderna.

Good news this year. We don’t want to switch rooms for Q&A. So Stephane is going to give the presentation and then we’re going to go straight into Q&A after that. A couple of ways you can ask a question. There’s mic runners in the room, so if you want to raise your hand, we’ll try to get a mic to you or alternatively you can submit a question electronically and I’ll read it off the iPad out here.

So with that, let me pass it over to Moderna’s CEO, Stephane Bancel.

Stephane Bancel

Thank you, Jess. Good afternoon, everybody, and thank you so much for joining us today. It’s quite an impressive room for this presentation.

Before I start, let me remind you that we’ll be making forward-looking statements that investing in Moderna entail some risk that you can find on the SEC’s website or on our website.

So as you all know by now mRNA is like software. As you know, computers use a binary system to code any piece of software where live across species on the planet uses a quaternary system to code for any protein, that makes mRNA an information molecule. And this beliefs and this understanding that led us 10 years ago to build this company. We believe that the key main advantages of mRNA versus small or large molecule are very profound in what they can mean for patients and for creating value.

The first thing that’s very exciting to us is a very large product opportunity ahead of us, not only this year or next year, but in the next 10, 20 years, a very large white canvas to paint on. Of course, we can do secreted protein like the biotech industry, but what excites us the most is who can do transmembrane protein those proteins on the membrane of a cell, who can do intracellular protein, including protein inside compartment of cells, like one of our rare disease program is inside the mitochondria that were getting the protein in.

So a very large product opportunity. We can make very complex protein. In the transmembrane, you will see one of that is actually made of five protein, for which we make five mRNA that is actually in Phase 3 right now. So this is not science fiction. That’s something we know how to do and we can combine the mRNA. We are programmed when we have two, three, four, five, six mRNAs in pre-clinical and up to 15 mRNAs in one dose. So the flexibility we have to do the right biology to get the drug to work is very profound and very different from small or large molecules.

The other piece that has excited us since the beginning, and I mean a lot having been in large pharma before is the belief that this technology will lead to higher probability of technical success of drugs getting to the clinic and drugs getting to market. Why is that? It’s because we always use the same chemistry. What we inject in the human body is the same for every product. So we believe this is going to drive a massive impact in change of probability of technical success versus the industry average that a lot of people are using to assess asset’s chance to get to market.

The first piece that we believe that I think we have demonstrated a couple of times is the ability to go a very different speed in term of cycle time of development versus small or large molecule. And why is that? It’s because we always make the same product using the same processes.

Well, in large pharmaceuticals, you have to invent how to make the product every time, the team in the labs have a cool new molecules. Well, in our case, when the teams in the lab have a molecule they won’t take to the clinic, it’s the same manufacturing process than the overall molecule, allowing us to go really quickly sometime in 40, 60 days from a candidate to starting a clinical trial and filing an IND.

And last but not least, because we use the same manufacturing process for everything, we use the same factory with the same people in the same room using the same CapEx. Literally one week we can make a COVID-19 vaccine and the week after in the same room with the same machine, with same people, we can make a flu vaccine or rare disease drug or cardiology drug. So the flexibility that gives us the efficiency of capital is really profound. So based on those beliefs that we had ten years ago, we set up a very different vision and strategy for how to build this mRNA company. We kind of threw the biotech playbook by the window because it was a different science.

So we believe it was not the right way to build an mRNA company than it was done for the technologies. And so the way we thought about it is that if we invest in technology mRNA technology, delivery technology and for an application that we call modality, we can make the first drug work safely in human. Then the next drugs and the next, next drug in that same application is a copy and paste. Use the same chemistry for the mRNA, use the same lipid, the same administration, the same manufacturing process. You just change the order of a sequence. And here you go again. And you could do that across many applications. And that’s how we set up to build Moderna.

What is interesting is, inventing a new application, a new modality is difficult. It’s time consuming and is expensive. Why? Because you have to figure out how to deliver the mRNA into the new cell type that you want to have a biological effect. That’s hard. And then you need to deal with immunity. How do you make sure that the immune system doesn’t react in the way that you don’t want about your product. And then, of course, all the translation. But what is quite interesting in the last 10 years, but even more interesting now that we have $18 billion of cash and 4,000 people in the company is I believe that Moderna is uniquely positioned to continue to lead in the space of mRNA.

First, it’s all we do. Two, is what critical mass in science. We have digitalized the company to allow speed and we have the capital that can invest in science. So what we have done over the last 10 years and as you can imagine, we’ve been a bit distracted with the pandemic. We have developed seven modalities, seven application that you see on this slide that all have drugs in humans.

We have many more applications or modalities that our teams are working on in the lab that we hope to be able to introduce if the science is positive. I won’t have time today to walk you through all of our programs, there’s 48 of those through all the modalities, so I want to pick a few, and those I’m not going to cover are in the appendix of this deck that you can find on our website. So let me start by the first modality infectious disease vaccine. We think there’s an incredible opportunity to have a massive impact on human health through mRNA technology for vaccines. There are more than 200 viruses documented by scientists that hurts human. 200. And there vaccine against around 20 of those. That’s a lot of whitespace, so I won’t have time to cover everything. But let me start by the big vaccines that we have a very active pipeline on.

First, respiratory viruses. You are aware, of course, of SARS-CoV-2, of influenza, now RSV is becoming more popular because it’s doing a lot of damage. You can see on this slide some of the leading respiratory viruses that circulate in the US, in Europe, around the world every year. And you can see with the red, those viruses that do not have a vaccine approved on the market. And the vision for respiratory viruses is quite simple. We want to develop a vaccine against all of those viruses. We want to combine them so we don’t need three or four shots every fall and want to adapt them to the variant circulating in the country where you live. Not a single variant for the entire planet, which we believe some years doesn’t make scientific sense. So that’s a bit the opportunity we’re trying to address.

Let me say a couple of words on COVID. So we reported this morning $18.4 billion of sales for the year. Those are, of course, at this stage unaudited. We confirm that we have at least $5 billion of contract already signed or deferrals from ’22 into ’23 that we qualify kind of as a [indiscernible] in term of sales for the year. In this $5 billion number, you have some countries like Canada, UK and so on. But this number assumes no sales in the US. And of course we are working actively with channels in the US to provide the updated 2023 booster into US pharmacy hospitals and doctors. No new contract in Europe is assuming the $5 billion. No new contract in Japan, Middle East and many other parts of the world.

RSV, we are very excited about RSV because how much damage it does to the community area. We’ve announced that our Phase 3 study 36,000 participants is fully enrolled. This is a Phase 3 study that is a registration study looking at safety and vaccine efficacy. We announced this morning that we crossed the number of cases, it’s a case driven study, 64 confirmed cases. The requirement was 42 for the first interim analysis. So we should expect very soon and I’m talking weeks, not months, the vaccine efficacy coming out of this.

On flu, we are running two Phase 3 studies in the southern hemisphere fully enrolled, looking at immunogenicity because some countries told us that we use that for an approval. And in Northern Hemisphere efficacy study, 22,000 participants that could come as early as this winter given the number of cases that has been happening across the world in the fall and this winter.

Let me now pivot to another family of viruses, latent viruses. Those are viruses that once in our body never leave our bodies. And so they create short term health care damage. But some of them creates very important long term damage. I won’t go through the list. I don’t have time, but something on the right side, you can see all the vaccine — all the viruses for which there is no vaccine on the market.

And so CMV is currently in Phase 3. CMV Cytomegalovirus is the number one cause of birth defects in this country and around the world. One in 200 kids in the US is born every year with CMV disease. The Phase 3 is 40% enrolled and we are now seeing that, we are now also enrolling in Japan. We believe the CMV opportunity is $2 billion to $5 billion annual sales for this product, given there is nothing on the market. And as you can see, we believe that we can build a very important portfolio for patients and on the way to create value for investors across the different vaccines we have in the pipeline. CMV, EBV, Herpes, VGV and also HIV.

So that’s a quick run by vaccine. I wish I could spend more time on the vaccine. You guys can join us on the vaccine day in April to learn more. So now, modality number two, cancer vaccines. As many of you know, in December we’re very excited to share some positive data in our combination with KEYTRUDA with a personalized cancer vaccine. This study was powered. The control arm was KEYTRUDA monotherapy. The other arm was Moderna personalized cancer vaccine plus KEYTRUDA. We are very delighted to show a hazard ratio of 0.56, meaning a 44% reduction in risk of recurrence or death versus getting KEYTRUDA monotherapy. You can see the P value. It’s the first time with mRNA that any company has shown in a randomized clinical study positive outcome. And as you know, cancer vaccines have been for the last couple of decades a graveyard of candidates. And so we’re very excited about what this could mean for patients. Because the mechanism is teaching T-cell.

How to recognize the epitopes from the cancer of every individualized patients. We think it’s applicable to a lot of other tumor types. So with our colleagues at Merck, we’re actively preparing a Phase 3 study that could start as early as this year. And also planning several additional Phase 3s in indications where KEYTRUDA monotherapy works with the same belief that we could improve the response versus KEYTRUDA alone, combining KEYTRUDA and Moderna drugs and we’re going to be expanding and testing that technology in many, many tumor types and potentially also going much earlier in disease progression. So kind of watch this space, we’re going to be investing aggressively in that space.

I’m skipping a couple of modality for lack of time. Modality number five, we’re very happy to announce this morning a very exciting program in cardiology for chronic heart failure. As you know, it’s a massive medical program around the world. Just in US, 1 million hospitalizations every year. The molecule vaccine is really interesting because it’s a naturally occurring hormone in humans. It’s used actually by pregnant women during pregnancy. And we believe that we can code that molecule to help people with heart failure. We’ve announced this morning that we’ve initiated a Phase 1 study in patients and will share with you data as we learn more about this program. That could move pretty quickly if a Phase 1 was positive.

Another important modality. Modality number six is rare genetic disease in the liver. There are a couple of dozen rare genetic diseases in the liver that cannot be drug using small molecule or using recombinant. Why? Because the kids are missing a protein inside the hepatocyte of their liver. So we developed technology, IV injection, going into the liver, delivering it to what we believe is the hepatocyte, the mRNA molecule. We now have six patients years of experience on drugs. Some kids have been more than a year with dosage every two weeks. It’s generally well tolerated to date, and we’re already seeing at low dose a reduction in number of metabolic decomposition event, which the regulators have deemed is the endpoint for the pivotal study for this program. So we are monitoring this, we will update data as we have more. But we are very excited because if this works, it will unleash the entire modality, because as we all know, in rare genetic disease, the biology risk is very, very low.

The other one that we are very excited about, which took a few years to make work in the labs is the ability to deliver inhaled mRNA to patients. So we partnered with our colleagues in Boston, Vertex to work on developing CFTR mRNA program, coding for the entire CFTR GENE to help those kids that don’t respond to the standard treatment where Vertex has a massive impact on so many lives. But there are still several thousand kids that don’t respond to treatment. So what we believe is that, if we were able to give them a full length CFTR protein in their lungs, we could basically restore their lung function. And so we develop that technology. We are very excited that the R&D was opened by the FDA, that this got the Fast Track designation. And this morning our colleagues at Vertex announced that we’ve already started dosing in human in patients, of course. So this should be able to go very quickly because those kids have no hope. They have no option.

And if you think about it, if it works in this application, then we can open a brand new space, a new modality in lung disease. Think about all the lung disease that we could go after inhaled mRNA. That is extremely exciting for us. So this is a typical slide we use to just give you a quick summary of where we are as of January 2023. I want to read everything just to tell you, we have now 48 programs in development. 48. The company is close to 4,000 people and our budget calls for adding 2,000 employees this year, because we are scaling research, we are scaling development, we are scaling manufacturing and, of course, we are scaling commercial.

As of the end of the year, we had around $18 billion of cash. So how do we intend to deploy that capital? Our number one priority, and we have been saying that for a couple years, is to invest in the company. We spent 10 years to develop a platform that could scale. One of the biggest challenge for pharmaceutical companies is what is next in your pipeline? We have an information based molecule and we build the platform around it. And so we’ve the management team and the board of directors, we understand our science. We believe our ability to scale. And so what we announce this morning is the board approved budget for 2023 is actually $4.4 billion of R&D investments. Many Phase 3s. As I said in cancer vaccine, with our colleagues at Merck, which is a 50-50 cost share and profit share. We’re going to be very aggressive.

We’ve also announced we bought a priority review voucher, which now make — we have two of them and we have two Phase 3 that should read out flu and RSV this quarter. So those two can be handy to be able to move very quickly towards approval if the results are positive. In terms of partnership, we do not believe we are on everything being able to the best science in the world. We believe there is amazing science happening outside our walls of our labs. And so we want to tap that technology. And so what we have done last year, you can see the top line metagenomic charisma and already this year, actually last week announcing two new partnership, an acquisition in Japan and also a licensing agreement.

What are we trying to do with those partnerships? We’re trying to expand the size of our mRNA operating system. We want to provide our therapeutic area with more and more technologies to be able to do more and more drugs using mRNA. We believe there are so many things that we are still learning and exploring to keep expanding and expanding and expanding the mRNA operating system. OriCiro is a good example.

Small private company in Japan with amazing new technology. They figure out how to make plasmid, which is the raw material to all the mRNA we make without using E. coli, synthetic cell free enzymatic reaction. Huge impact in terms of speed, scalability and purity of products. That will help us across the company. Using that technology, we can go faster to the clinic for personalized cancer vaccine, which could have an impact on efficacy and more people responding because they are dying of a cancer. It can help us in the labs to go faster from ID to data to just expand the amount of operating system faster to get into the clinic faster.

Think about when there’s a new variant, the FDA told us on June 28th they wanted a BA.5 Omicron variant. It was in pharmacy on September 2nd. But we spent all of July waiting for the plasmids, GFP plasmids. This technology will allow us to shut that time by maybe half. So that’s going to mean a lot of impact for patients. And then the excess cash we will return to shareholder. So we already announced two share buybacks in 2022. We bought for $3.3 billion of stock at an average price of $1.43. There’s still $2.8 billion of remaining capacity in the current plan, and the board will continue to review, as appropriate, the use of cash between investing in the company, which is our number one priority, to win partnership, to expand the US and the excess to return to our shareholders.

What is exciting for me is other company is accelerating, because the biopharmaceutical world is an analog world where companies have drugs that are all different. But in our case, we have a platform. And so if you look at some of the historical data, at the end of 2018, no commercial product, of course, 21 product in development, mostly early stage, the end of 2020 commercial product, 25 product moving to later stage. 2022, because in 2020 we are kind of pretty busy with the pandemic. 2022, 48 program in development, four programming in Phase 3, nine program in Phase 2. So you can see how the pipeline is expanding into new modalities and is accelerating because we have a capital to do so.

So if we invest $4.5 billion in R&D this year, what do you think it’s going to look like in two, three, four years from now? I want to be quick on my slide, our R&D budget in 2019 was less than $500 million. So if you think about it, this picture was generated with much lower R&D budget than where we are now. $4.5 billion is around 10 times. The R&D investments we’re going to do in ’23. This is what we did in 2019. So this is going to drive a lot of change in our pipeline. And I think a big impact on patient. Because of where the company is and the growth of a company is. We spent quite some time in the last few months to think about where are we heading?

What you see on this slide is our original mission, the one we set up when we started the company. Our goal 10 years ago was to figure out how to make mRNA work. Because we are convinced that if we could make one drug work, because [indiscernible] information, we could do a lot of drugs. And what we could do for society and patients over the next five, 10, 20, 30 years could be transformational. Potentially as big, if not, larger than what recombinant as an industry has done over the last 40 years. But where we are today? We know mRNA works. So we thought about what’s our next 10 years journey? What’s our mission? What should drive us in the morning?

And what you see here is what we think is really important to who we are and what we want to become, which is as a team, we want to deliver the greatest possible impact to people for mRNA medicine. What we optimizing for is the maximum impact we can have in the next five, 10, 20 years on the world, thanks to this amazing science.

I hope you will join us for some of the key event this year. And I would like to thank you for your attention. I’ll be happy just to take any question. Thank you.

Question-and-Answer Session

Q – Jessica Fye

Great. Thanks for that presentation. It’s really starting out with a bigger picture question. Can you talk about how you think about the future as we move toward treating COVID as an endemic disease and as the US shifts towards a commercial model?

Stephane Bancel

Sure. So like everybody, I’ve never managed to transition from pandemic to endemic. So we are learning as we go, but we’re trying to use over viruses, over disease to kind of help us think about it at least directionally. We think that flu is a pretty good model for where we think things will end up. The need to update the product regularly based on the biology, potentially different booster in different geographies, which we can do. And we’re trying to really help us by even building plants around the world. I don’t have to talk about it in this presentation, but we’re building a plant in Canada, we’re building a plant in Melbourne, we’re building a plant in the UK where we’ve had 10 years agreement with those governments, 10 year supply agreement that have been signed to basically procure from Moderna respiratory vaccine that we can adapt with local authorities to what they want for their people.

And so I think for the 50 and — 50 years old and above people that have immunocompromised, seriously sick, the need for an annual booster is going to be important. But I don’t think that’s the only population of — the example I use is, I’ve done flu shots over the last 20 years. We provided the flu shots at Moderna since last 10 years. Every year has a benefit, like many companies do. Have I taken a flu shot and I’m 50 now. So since I was 30 because I thought I was going to be hospitalized or dying. No, because I want to be sick. They want to give it to somebody else. And I think a lot of people are going to do that as well. Do I believe everybody’s going to do it? No. But I think if you look at the 50 plus and people at high risk and people who would just want to be protected, I think it’s going to be an interesting market in terms of size.

And then I think as we get more and more combinations, we’re trying to work on the COVID plus flu, COVID plus flu, plus RSV, because nobody really likes needles too much. When we talk to payers, we are very worried as we get into a COVID plus flu and sooner flu plus RSV is how we will ensure compliance. Because what they want is, if those vaccine exists, they want people to use them, especially people at high risk that might end up in hospitals. And so, through the discussions we’re having with payers, both private payers, but also health ministers and so on we believe that there is a very, very important demand out there for combinatory vaccines. And that’s exactly where, as you know, we’re going in term of pipeline and strategy. So I think combinations and I think the customization of products by geography is going to be driving a big competitive advantage.

Jessica Fye

Okay. So you touched on this a little bit, but you’ve got some other viral vaccines in development where there is a bunch of competition and some other ones where there isn’t a bunch of competition. So how do you decide where to go? Like, what’s your kind of overarching infectious kind of vaccine strategy?

Stephane Bancel

So let me start by the easy ones. If there is a good vaccine out there we most probably are not going to do anything. So a good example is hepatitis, there is good vaccine for Hep A and Hep B. We have never even talked about should we do Hep A or B vaccine because we don’t see the medical need and how much value it could bring. And given other things we could do, we rather do something else with our talent and our capital.

Respiratory is different because first we believe we can get a much higher efficacy on flu. We don’t think we’ll get that done on the 10, 10, the first flu program because it was not designed for that. It was designed to be non-inferior to commercial flu products to go to the market quickly, because we believe that COVID plus flu — COVID with Moderna’s product has shown the best protection against hospitalization. And if we have a noninferor flu vaccine, we think that will provide a lot of value to our health care system. And so, that’s what we want to do first. But if you think about flu, there’s a lot of things that can be done with flu with mRNA to increase the efficacy, because as we all know, the current vaccines don’t have great efficacy. We can do HA antigen and NA antigens to actually improve, we believe, the efficacy of a vaccine. H3 strain is the most important one. Why? It drives 90% of hospitalization.

So why only pick one H3 strain? Which other technology are constrained to do because they cannot do more. What about doing two or three H3 strain in the single dose? So you look at the different strains circulating around the world, because it’s really hard to guess where the virus is going to be in a few months when you have a vaccine in pharmacies. And so we think we can use the technology in quite an interesting way to develop different products. I even been talking to a country that, I won’t mention, because it’s a discussion with Sovereign, who’s public health expert and health minister say, hey, should we put pandemic strain of flu in the flu product for our country. Think about like an H5 and then the year after H7, H10 because you could create some herd immunity so that if there is a new pandemic with flu, this time not the coronaviruses, you could have a bit of herd immunity and you could rotate that every year. So there’s a lot of ideas that you could have using mRNA if you design the product a bit like it’s done in the tech world, which is stalled by the problem you’re trying to solve and design the product back world.

In biopharma, people have one molecule and they’re trying to do the best they can with that molecule to find where it could be used. But the way we design drugs is very different. We start with a medical problem, the science, and we move backward to say, what do we need to do in terms of components so that the product has a high chance of working like CMV. Most pharma companies doing vaccine have tried the CMV vaccine because it has been the number one priority of the National Academy of Science for 20 years. And some vaccines went into Phase 2, but they failed because efficacy was too low. Why? They only coded for the GB antigen. But it is well known by scientists that the virus can also get into human cells if you have a pentamer. So it was believed in the industry that if you don’t have a pentamer you have no chance, but a lot of pharma company because they only could do the GB because the pentamer, as the name says, it’s five proteins that have to come together. So good luck. We were competent to do that, but they still went into the clinic. This is the type of things we will not do because we have so many other things we can do where we think the science makes sense to increase the chance of a drug to get to market.

Jessica Fye

And we have a couple of questions from the audience here. Can you talk about how Moderna thinks about original antigenic sin or immune priming with respect to COVID?

Stephane Bancel

Okay, so I think the question is really around the different populations, because what I think is quite unique about this virus versus over virus that we are dealing with in the respiratory space is most of us and I think I can say all of us in this room have never seen the virus as young people, which is why I think people who think that the need for boosting in the elderly won’t be there. I just don’t understand the science. We believe that because we have not seen, again the older ones in the room. We have not seen this virus in our early years of life, especially teenage years, with a very strong immune system and memory that the need for boosting the subjects are going to be very important.

Jessica Fye

Okay. The next one here is, it has got a statement and a question. Moderna’s technologies can change how we do gene editing. You established a great collaboration with Metagenomi. Can you tell us more about how that’s going and what your plans are to go to tissues beyond the liver with LNPs or other delivery systems?

Stephane Bancel

Sure. So I think there’s two questions in there. First is about increasing the application of mRNA. So as you say, over seven modalities use different lipid or different RAT administration like the lung, liver and so on. So we’re investing large amounts of money to invent new modalities to go to new cell types. And we can do that for either using mRNA to code for protein as a therapeutics or going to the — part of the question around gene editing. We can use the mRNA to code for an enzyme that’s going to do gene editing. While we have all been excited about CRISPR-Cas9 system, because I’m not aware of any technology that human has touched where the first version of a technology is the best one.

We think that it’s just the beginning of a very exciting time for science and biology to find different gene editing systems. And that’s where kind of metagenomi comes into play, where we want to figure out for different cell types, but actually for different jobs to be done by the enzyme where you might want to use different enzymes. We believe that one thing to do — one tool to do everything might not how you build a house. And so we are very long in genomics. We have a group that soon is going to be up to 200 people. They are leveraging the entire Moderna infrastructure. So they design mRNA for new gene editing enzymes. And it goes through the same robots that makes everything else that we use for the portfolio and we can move things to the clinics very quickly because the idea here is the same he’s using the same delivery system, using the same mRNA just to do gene editing versus just making the human protein.

So we think that if you look at the level of investments we are making in gene editing and the infrastructure, we have a Moderna in research, development and GMP manufacturing that potentially in a couple of years from now, we’re going to be actually a very large player in gene editing.

Jessica Fye

Maybe switching to PCV. I see we got the encouraging top line results. Can you talk a little bit about where you see this product going, whether it’s what tumor types or what other settings?

Stephane Bancel

Sure. So given the data and how we think it’s a very profound impact. And as you know, the study was powered and randomized and kind of where the P value and the hazard ratios are and so on. We and our colleagues at Merck are really excited about the technology. We’ve shown and presented ASCO in 2019, I think, ‘18, ‘19, I think, the fact that we were able to get T-cells that did not recognize epitopes coding in our products by taking the blood of cancer patients before dosing our product and taking their blood after several injection and showing that then the T cell recognize the epitope we know we coded in our products. So we think that were mechanism of action. Now we have clinical outcome and so we believe this should be applicable to a lot of tumor types across the board. We’re going to, of course, start where KEYTRUDA works, but we’ve had discussions with our colleagues at Merck to say what type of tumors will actually KEYTRUDA did not work, but it might make sense to go back because maybe by combining personalized cancer vaccine to KEYTRUDA, you might get the immune system to the right place where you can have a clinical impact that is beneficial to patients.

And then we want to also go earlier in disease. When we want to go later in disease, could you think I’m kind of brainstorming for a minute. It’s not forward-looking statements. Could you, for example, with the improvements in liquid biopsy, could you see a world where you try this combining with product like Grail and others, where you basically through blood work figure out some mutation that you got in the vaccine that you basically give very early on. Because we really believe, given what is known about immunology that getting younger patient and much earlier in disease should lead to better outcome because of what happens to the immune system through the disease progression.

And so we’re going to be creative, we’re going to be bold in terms of how many things we do. The great thing with Merck, as have shown the world with Cathedra, they were not shy to try a lot of different studies at the same time. I think that experience and also what’s happening with the product patent expiry that they have on their hand and our belief in the science of M&A and the balance sheet that we have. I think you have two companies, and I spoke to Rob Davis, the CEO of Merck, several times in the last few months. We are both very eager to be really bold about what we think this can do for patients and as a consequence, creating value for shareholders.

Jessica Fye

So I think you mentioned you have enough events in the RSV trial to do your first interim?

Stephane Bancel

First interim.

Jessica Fye

What are the kind of scenarios here if you hit or don’t hit on the first interim, what happens next?

Stephane Bancel

Sure. So if we don’t hit on the first interim, then we keep going. The study is not going anywhere and will be for quite a while to monitor people for much more than the 12 months required for filing. Because how the statistics works, it’s not because we missed the first interim that necessarily we have a bad efficacy. And if we hit it and we have vaccine efficacy, I think the thing we’re going to be looking at is, first, what’s their efficacy against disease because the vaccine that have published data so far I think have a very good 80-ish percent protection against hospitalization. But I think — I hope one could do better on the efficacy against disease because anybody who gets a vaccine will, of course, not to get hospitalized, but so we hope not to get sick. So I think a prevention of disease is going to be important.

And then there is a tolerability profile. One of the vaccine that has already got data out there is using a pretty strong adjuvant. And so those are the three things I think we are going to be looking at, VE against severe disease, VE against mild disease and tolerability.

Jessica Fye

And that comes very soon?

Stephane Bancel

That should come very soon. And they’re not going to say days or weeks, not months. I mean the team is analyzing over data and so on. So when everything is good at QC, we will release it.

Jessica Fye

Okay. You’ve also got a number of efforts ongoing in rare diseases in addition to vaccines, in addition to oncology. Where do rare diseases fit in kind of Moderna’s strategy?

Stephane Bancel

I think it goes back to the same theme, which is, we want to use this technology to help patients. And if you think about those rare genetic disease in the liver, those kids and those parents have no hope. They have an enzyme that you and I have that they’re missing. And every time they just get running nose, they get a viral infection or something. The parents rush to the hospital, the kids in near ICU and they might lose their children. That’s the [indiscernible]. They try through diet and other things to minimize the risk, but every decomposition event could lead to there for those children. And because of some of those disease leads very high level of acid, you have a lot of brain damage every time you have an incident.

And so the way it fits the strategy is we can help patients because the biology risk on rare disease is very low. If you think about cancer or HIV through the roof, but rare genetic disease that have single mutation are pretty low biology risk. And if we can do it once to get mRNA into the hepatocyte of a liver, then the next time we just change the sequence and we go again. So could you get a couple of dozen drugs? Some might be in $1 billion, so maybe $500 million, maybe $200 million or $400 million because of the size of the market. But if you don’t need to build any plant for it, if the drugs are going to be developed very quickly, if once year on the market, it’s going to be very hard for anybody to come behind us in terms of doing a study because it will be unethical to take kids out of a drug working. And until genomics really works really well, you might have those kids forever and the new born kids with those disease. And as we work on genomics, we might be able to go back to offer parents and doctors and the patients have repeat dosing like every two weeks like enzyme replacement therapy using mRNA to call the protein like what we did today, and or propose a gene editing solution because we know how to get into the same cell type. So that’s a bit how we see the strategy. But like you see Vertex, we talked about it, going back with an mRNA solution to treat the patients that they could not treat using the current products. We’re trying to really obsess both patients and the families and say, how do we help them and how to create the right product or the right products for each disease? And then we think we’ll create value on our way because, again, small clinical trials that are pretty quick, no plans to build. So if you think about just the economics of rare disease for Moderna, it’s actually extremely attractive.

Jessica Fye

Okay, great. Well, we’re out of time, so we’ll leave it there. Thank you.

Stephane Bancel

Thank you.