Moderna, Inc. (MRNA) CEO Stéphane Bancel Presents at Credit Suisse 29th Annual Virtual Healthcare Conference (Transcript)
Moderna, Inc. (NASDAQ:MRNA) Credit Suisse 29th Annual Virtual Healthcare Conference November 11, 2020 8:00 AM ET
Company Participants
Lavina Talukdar - IR
Stéphane Bancel - CEO
David Meline - CFO
Conference Call Participants
Evan Seigerman - Crédit Suisse
Evan Seigerman
Welcome, everyone, to Day 3 of the Crédit Suisse Virtual Health Care Conference. My name is Evan Seigerman. I'm the senior biopharma analyst here at Crédit Suisse. And for Day 3, it's my pleasure to have Moderna. And from Moderna, we have CEO, Stéphane Bancel; Dave Meline, CFO, I almost had to do a double take because last year I had him with his former employer, Amgen; and Lavina from the IR team. And it's my pleasure to have all 3 of you on. I know, Stéphane, you wanted to have a few slides, and then we're going to jump right into Q&A.
Stéphane Bancel
Great. Well, Evan, thank you so much for having us, and I hope everybody is doing well. I wont go and read you the forward-looking statement. You can find them in all our websites, but they're important, of course.
So let me give you a couple of quick updates. Of course, I'm sure we're going to talk about COVID events, so I'm going to browse through it. The Phase III since October 22 is fully enrolled, 30,000 participants. We are very pleased to have 37% of diverse community, which we think is really important given what's happening to those communities in term of disease.
As you know, Moderna has been kind of leading the way around transparency. We expect the first interim analysis in November. We are going to meet in the second half of November, the important 2-month median safety data point that the FDA has asked as part of the EUA-plus guidelines, so for the second half of November. So as soon as we have fully positive data and the 2-month median, we'll be, of course, filing an EUA with the FDA. Outside the U.S., we started rolling submission in Canada and the U.K., and we received confirmation from the EU that we are good To start rolling filing as well.
We are very pleased to announce another partnership with government recently with Japan through a partnership with Takeda, where we got $50 million with a firm order. So far, in Q3, we have received $1.1 billion of cash payment from governments that are accounted in our financials are deferred revenues.
Of course, Moderna has a broad platform, and we are not a COVID-19 company. We happen to have a COVID-19 product. This morning, we are very happy to actually announce some good progress in our personalized cancer vaccine with the expansion of a Phase I for mRNA-4157. That is a personalized cancer vaccine that is combined with pembro. It's presented as you'd see as a poster. But tolerability is very good, as we've shown before. So nothing new here today.
I think the news today is that in the dose expansion cohort, the ORR in HPV-negative head and neck cancer show on a RECIST scale as 50%, 5 out of 10 patients, with 2 patients achieving a complete response with negligible disease. So we're very excited about that. And what we plan to do is to expand that to kind of chase that signal. It's still, of course, very early in. But if you look at the standard of care with pembro monotherapy, it's lower than 50%. So we really want to chase our signal because if it was confirmed with a bigger N, that could have, of course, a big impact on patients with head and neck cancer.
The other big news, because we have a lot of vaccines in our pipeline, and we, for many years, have believed mRNA is a great technology for doing powerful vaccines, we announced recently that our CMV vaccine for cytomegalovirus, which is the number cause of birth effect in this country, had a positive Phase II. We are on track to start the Phase III in 2021. We own this product. It is not partnered like the COVID-19 vaccine is not partnered. 100% of the profit will go to Moderna. And the CMV, we think, is a $2 billion to $5 billion annual peak sale product.
The pharma industry has strived for 20 years to develop a CMV vaccine. They have all failed. I think this really shows the power of mRNA technology. This is a product even with 6 different mRNA molecules in each vial because we can do the right biology. And 5 of those are encoding for each component of what is called the pentamer, which, as the name says, is a very complex 5-protein structure that have to come together. This -- good luck trying to do with recombinant. But again, mRNA is very well adapted. We just mimic a natural infection without giving the virus.
Again, going back to cancer. OX40 ligand is also now expanding in Phase II in the ovarian setting because of a signal we saw into the Phase I. So we're going to be expanding that and hopefully getting some signal because, as we all know, the survival rate in ovarian is not good.
And in a rare disease chapter or propionic acidemia, which is a liver rare genetic disease, is also kind of in start-up activity for those things, so we are very excited about that.
There are many more program. In total, we have 21 development program at Moderna. But of course, we don't have time to talk about these.
Just a quick word on cash. In Q3, it was an important quarter in the company history because we had positive cash flow from operating activities. So it's the first time in 9 years that the company has been operating. We generated almost $900 million of cash flow from operations. Of course, this does not include any financing. There was no financing in Q3. It's purely from operation. And this with an investment, very significant. $300 million of investment in the business between OpEx and CapEx, which is the highest ever investment we had in the business. So if you look at it, we are on a run rate of around $1.2 billion on an annual basis.
So on the COVID vaccine, we are very happy that we have shown in animal, both small animal in Nature and monkeys in New England Journal, that we can really prevent disease in the lung and in the nose of animal, which give us a lot of hope into human. As you know, Evan, in a lot of therapeutic area, animal model do not tell you much. Cancer is a great example. But in infectious disease, if you talk to infectious disease experts, non-human primate is a very good animal model to give you a sense of what might happen into the clinic.
We were very happy with our Phase I data. We showed that all the participants, 100% of participants in all age group had neutralizing antibody at or above the level of convalescent sera. So it's very important because we know in the elderly, there's a lot of risk for that population. And we're very pleased to be able to show that in an 85-year-old or a 25-year-old, you make the same level of antibody and that all the participants, not 50%, all of them, make neutralizing antibody. So this is very exciting for us. And we are waiting, of course, now to be able to get the interim data.
In term of supply agreements, what you can see on the top left is we've already signed quite a number of agreements: 100 million dose with the U.S. government with an option to add up to 400 million doses; the 50 million dose with Japan that we talked about; 20 million dose with Canada with the option for an additional 36 million; but also deals with Switzerland, Israel, Qatar and quite a number of other countries that I've not announced yet.
Those deals that have been signed have been done initially at $32 per dose in the early days and more recently at $37 per dose with more human data to derisk the product. This is for low volume. For large volume like the U.S. deal, the average price was around $25 per dose when you include the BARDA grant in the 100 million order from the U.S. government.
We have quite a number of deals that are in discussions as we speak. We have 1 with the European Union for 80 million dose as a base plan with the option to go to up to 160 million doses. We've also started discussion with COVAX, which is a WHO facility, to propose tier pricing for middle-income and low-income country. And we have quite a number of countries around the world that are in active discussions with us.
And I'm going to end on this slide, Evan, and then take your questions. It just give you a little bit of a sense of where Moderna is now as a company. So COVID, we're getting ready for preparing the launch of COVID assuming positive results. We have now 4 program in Phase II and CMV moving to Phase III. The personal cancer -- personalized cancer vaccine is in Phase II. Head to web PCV plus KEYTRUDA versus KEYTRUDA monotherapy in the randomized study in melanoma. OX40 in ovarian and also VEGF that people tend to forget. I'm very excited about this program. VEGF is injected in the heart after a heart attack by our partner, AstraZeneca.
This is an mRNA formulated in water. And the idea here is can you revascularize the heart after an MI. Because as we all know, if you survive a heart attack, you have a 100% chance to die of a heart failure or something else in between because, of course, of the damage to your heart muscle during the MI. And here the idea is could you revascularize with brand-new blood vessel the heart. We've showed very good data in a pig model, which, as we all know, is a good predictor for cardiac disease to human. And also in Phase I, what Astrazeneca has shown and published in Nature is the ability to increase blood flow in the arms of diabetic patient. This is all published. You can find the paper on our website. But this program, I think, is very interesting as well. Seven of our program in Phase I. Quite a number of positive readout that you can find on our website.
And as you can see across the board on the second row, 6 first-in-class vaccine, 5 immuno-oncology program that are all in clinical trial combined AstraZeneca or with [indiscernible] from AZ, 4 rare disease program and 2 autoimmune disease program to start.
So far, more 32,000 healthy volunteers and patient are being tested with our technology. The company keeps on going. We have 1,200 people at the company now. We have our manufacturing sites in Norwood, Massachusetts, which allowed us to move very fast chasing these virus. But we complemented that with capacity from Lonza that we can make from 500 million to 1 billion dose next year.
We have great partners, and we are very well funded because we have now at the end of September $4 billion of cash on the balance sheet. So with this, Evan, I'm going to send you back the mike and happy to take your question.
Question-and-Answer Session
Q - Evan Seigerman
Excellent. Thank you for that introduction, I mean, that overview. One comments that I wanted to make before we jump in is, Dave comes on board and you're cash flow positive. That's a good sign for bringing on a new CFO. So...
Stéphane Bancel
Dave is fantastic.
Evan Seigerman
I know. I was going to say. No, I'm glad to have both of you on. So let's jump right into the COVID vaccine as that's on top of mind for everyone, especially with the news this week.
So given your data -- you're expecting data potentially in a couple of weeks, can you overview the time line as to that interim look, the efficacy data and what timing for an EUA could look like in the United States?
Stéphane Bancel
Yes. So as we said, we are still tracking for November time lines for the first interim. As we've said on our quarterly call, because of a high epidemiology in the country, we believe that this time line is confirmed for November. I'll remind people 53 cases for first interim lookup.
And as I said in my introduction, the other thing we need is, of course, safety.
Evan Seigerman
That's right.
Stéphane Bancel
The FDA was very helpful by giving very clear guidelines that they want at least half of participants, so 15,000, with at least 2-month follow-up, the boost. I'll remind people our vaccine is a prime and a boost 4 weeks after. So the FDA is expecting 2 months after, and that's because most of the side effects in a vaccine, as the FDA reminded people at the VRBPAC meeting recently, happen within the first 6 weeks after a boost. So I think it's a good safety measures to ensure that we are all confident about the safety of those vaccines. Of course, vaccines are given to healthy people, and so making sure that we don't hurt anybody is, of course, priority number one.
The third chapter, Evan, of course, is CMC. What we discussed with the FDA is starting to file all our material, PPQs and so on, into the INDs that we started to do months ago so that we do not have CMC as a critical path to launch under EUA. So the 2 critical piece we need is the interim data to show hopefully efficacy and the safety data at the 2-month point. So because we're going to have the safety data at the -- in the second half of November, if the interim data is positive, you could expect early in December that we should be able to file an EUA.
Evan Seigerman
Excellent. So hopefully, if that is the case, then you could potentially launch sometime in 2021 assuming that time line?
Stéphane Bancel
Yes. I mean after we -- it's going to depend from FDA. So going back to the process for people, we need to file an EUA. From that point, FDA is going to, of course, look at the data. We're in almost daily discussion with the FDA. Like they are with other companies, they have been really fantastic to help and guide industry and ensure that we're all on the same path. They will organize, as they declared a VRBPAC meeting, to review mRNA-1273, our vaccine. And after that, we would expect an EUA.
Scott Gottlieb who, as you know, used to run the agency, has said several time on TV that he expects 2 to 4 weeks for an EUA approval for a vaccine. Again, that's, of course, the FDA decision. So our job is to provide them all the data they need on time with high quality and to help them through the process so they can do their job to ensure the safety of American people.
Evan Seigerman
Excellent. So earlier this week, we had some good news also in the mRNA space with Pfizer. So they have data suggesting efficacy at greater than 90%. What are your thoughts on this efficacy bar? I mean is it attainable? Is it something that you're looking for? I know previously we had talked about a 50% to maybe 60% efficacy bar for this initial vaccine.
Stéphane Bancel
So the FDA has asked for at least 50%, and the European Agency actually said recently on the record that they will be willing to approve a vaccine with less than 50%. It's, of course, extremely difficult to guess the efficacy until you have the data because it's science.
The thing that I think has made us cautiously optimistic over the last months is our Phase I data. As Dr. Fauci has said and many experts in the field, neutralizing antibody are a very good predictor for this type of disease. We have shown, as we discussed in my introduction, that all the participant in our study make neutralizing antibody at or above convalescent sera. Because it's a new virus, nobody really knows how much antibody you need to provide protection. So it's a big question mark.
The other piece, too, is given it was a Phase I in healthy people, we did not have a diversity of population that we have in a Phase III. Now we have a lot of people with diabetes that are overweight or obese or that have other comorbidity factors. So that's why it's really hard to know where we're going to land precisely. As soon as we have data, of course we'll make it available.
And even in the Pfizer data, because, of course, as is appropriate, they only show top line data, nobody knows at this stage in the external world, is it 100% protection in the young and 70% in the elderly because we don't know also the mix of people by age group. So I think all of us have to be patient, which I know is not something that we like to do. But to be patient, to wait for the data. We need the science to speak out. Quality control is very important. And so we need to make sure that the data is curated very thoroughly and adjudicated for other cases. But I'm confident in a scientific process.
All of us companies sponsored by Operation Warp Speed have made a pledge a month or 2 ago that went very public about that we'll not submit any application until we have the safety and the efficacy data that warrant an application.
And so the teams are doing a great job to go through the process. And as soon as we have data, we'll, of course, communicate it.
Evan Seigerman
Excellent. Well, we're looking forward to that. One question that I get a lot is we know the initial efficacy of these vaccines, at least for Pfizer's and we'll know yours soon. How do you think about the durability? Does this -- how durable are these vaccines supposed to be or could they be? Is this something that we need to be revaccinated annually or every other year? How do you think about that? And how -- what are kind of -- what are the things that we can infer from, say, TB memory cells that may infer longer immunity?
Stéphane Bancel
Yes. That's a wonderful question. And of course, the entire field is waiting what the answer might be. And I think we'll have to be, again, patient and look at the clinical data.
So what I think is going to be important first is how quickly do the antibody decay. And so i think starting to look at more time points to be able to see to the antibody decay very quickly or do they last much longer is going to be important.
If you look at other vaccine that we have done with our platform, I cannot comment for adenovirus or Pfizer platform because it's different lipid, different manufacturing process. So of course, I can't comment on that.
But for the Moderna product, if you look at our CMV vaccine, we shared again -- in the Phase I, we shared it again. We have shown very long duration. So again, it's a new virus, so it's tough to know if we're going to need vaccination once per year. Is it going to be once per year for the elderly but maybe every 3 to 5 years for a young adult? It's just too early to know. Those studies are going to be multiyear. We're going to track participants in our studies to try to understand disease progression over time. And there's no other way to do it but just to run the science. It's a new virus, so we don't have enough scientific knowledge to be able to make a determination now.
Evan Seigerman
And one interesting question with the -- with this 90% efficacy or whatever percent efficacy we're going to have, are you able to track the reduction of asymptomatic infections in these trials? Or is that something you're looking at? Because I think that's essentially critical for getting this pandemic under control.
Stéphane Bancel
Yes. So it's something that we are very attentive to at Moderna. Again, I cannot comment about other companies.
Evan Seigerman
Right. Right, right.
Stéphane Bancel
But two things. First, in a nonhuman primate, we showed, and we are one of the few companies that have shown, a very drastic viral load reduction in the nose. And if you look at our model that was published in The New England, we gave 10^6 copies of a virus into the nose of those nonhuman primate. That is extremely high, way higher than what you would get for a natural infection. And what we showed is at day 2 after the challenge, a very drastic reduction in the viral load, in the number of copies of a virus in the nose and that, therefore, there was no more virus in the nose of the monkeys. We show you a very active vaccine.
So we're going to track this in human as well by looking at antibodies that are not coming from a Spike protein because, of course, a vaccine, as you all know, is coming for Spike. And so if we look for Spike antibody, they could be coming from a vaccine. And so what we're going to be tracking is that neutralizing antibodies coming from over the main of a virus that if they are present means that somebody has been affected by the real virus. It's not because they got vaccinated. And through that, we're going to be able to track transmission of disease, which, as you say, is very important.
Our number one priority, Evan, is to reduce disease. If we could have vaccine and vaccinate a lot of people, especially people at high risk, the elderly, African-American, people working on the front line, in stores, in warehouses and so on, that will have a big impact on hospitalization and as big impact in death. I think this is a first step for us going back to a normal world. Of course, the icing on the cake is a vaccine that prevents; if you get reinfected after vaccination, that you have no symptom but that you don't give the virus to somebody else.
Evan Seigerman
Right. That's key. Now one of the questions I get a lot just on these vaccines is distribution. I know your cold chain requirements are slightly different than other players' in the space. So can you just overview those differences and how you plan on overcoming any hurdles to distribution, especially not necessarily in the United States but other parts in the developing world per se?
Stéphane Bancel
Yes. That's a great question. So thanks to all the investments we have made around mRNA vaccine -- this is not our first. For the other companies, it's their first infectious disease vaccine they do. This is the 10th one we are doing. We've put 9 vaccine in the clinic before. And every time, we improved the manufacturing process, we improved the lipid that we use now on CMV, COVID, Zika. It's a much better lipid than the one we used in the olden days on, let's say, our pandemic flu products that have been published. And so what we have now is we were able to move out of ultracold temperature. Our -- many vaccine needs storage at minus 70 Celsius. We're at minus 20 sales, and that's a big difference. Why? Because we're approved product by the FDA at minus 20. So the McKesson of this world have the logistics capabilities to store product at minus 20%. And that's a very important differentiation that we have, and that's thanks to the investments we made in process development over the years.
The other piece is for 2 weeks, we can store a vaccine at 228 Celsius. That's a regular fridge where you put your food. It's the same temperature that you store, for example, insulin. So of course, there's a lot of capacity for a product like that both into a GP's office, pharmacies and so on. And then for 12 hours at the site of injection, you can leave it at room temperature. So it provides an easy use because we've put 10 dose per vial so that we maximize the output of how many dose we can get because, of course, there was not billions and billion of filling capacity available sitting idle in the world. And so what we decided to do at Moderna is to put 10 dose in 1 vial so you can vaccinate 10 people out of just one single vial that we have to fill, of course.
And we have a big advantage of our product, which I think sometimes is underappreciated, is dilution on site. With our product, we do not need dilution on site. We literally put a sterile, clean and a new needle syringe into the vial. You pull the product. You inject it into a human. You're done. You just get the -- you're done.
For other products, you need a dilution on site, which is an extra step when we need to go through this massive vaccination, which is a big logistical challenge. And also, you are always prone for errors because human makes mistakes. If you dilute too much or you don't dilute enough, it will, of course, impact the dose you're going to give the patient.
Evan Seigerman
Right. And just remind me, you -- your involvement with Operation Warp Speed, they provided some funding upfront, and then they are also providing the logistics once, hopefully, this has an EUA to get out to the population in the United States.
Stéphane Bancel
Yes. So Operation Warp Speed for me did something very remarkable that no other countries in the world has done. They built a portfolio of vaccines. They said, we're going to go after free technology: mRNA, adenovirus, protein plus adjuvant. And they said, in each of those technologies, we're going to back 2 companies to diversify risk. And so we are one of the 2 mRNA companies they are sponsoring. They have no plan to sponsor more companies. They provided funding on the clinical trial through BARDA. And as we've said before, we got 2 grants. One -- the second one happened because the trial was expanded from 10,000, which was a guess we and BARDA made initially until the FDA said in June, now we want 30,000 people to ensure safety. So we said, of course, yes. And BARDA gave us a new grant to cover those costs.
So by having this funded by the government, it's allowed us to move very fast and take a lot of business risk, which is why we could develop these vaccines so fast, where it really takes many years, because we did everything on top of each other, taking no safety risk but taking a lot of business risk. So that's why they helped us.
The second piece they helped us is, of course, on placing a first order for 100 million doses. And as we disclosed in one of our 8-K, we received around $600 million of upfront payment, which is very helpful to us to fund our working capital to buy the raw materials. That's another place where they helped us. We know the big companies, of course, have very strong balance sheets. But for companies our size that have not been profitable yet, having those $600 million to fund the working capital is, of course, very useful.
And then the other piece they're going to do is, of course, they're going to take custody of our product from our factory when the EUA is approved, meaning if we get approval by the EUA, we're literally going to go through McKesson, which the U.S. government has contracted, basically provide them big pallets of vaccines, and they're going to take custody and do the distribution. The CDC, as you know, is going to do the allocation. It is very important that companies do not decide who gets the vaccine first, of course.
Evan Seigerman
So once the vaccine is manufactured and vialed, someone else, McKesson and the U.S. government, takes care of it to distribute it? So that's...
Stéphane Bancel
Correct.
Evan Seigerman
That actually makes your life easier. So you just focus on the vaccine and not [indiscernible]?
Stéphane Bancel
Correct.
Evan Seigerman
And before we move on from COVID-19, because I want to highlight the other broad components of your pipeline, I do have 2 questions on email. One, "What are your thoughts on the public opinion of willingness to take a Moderna vaccine given that the Pfizer vaccine is at 90% efficacy and, say, yours is at 70% to 80% efficacy?"
Stéphane Bancel
Yes. So I would suggest we wait to see the data.
Evan Seigerman
Fair enough.
Stéphane Bancel
Again, I've not seen the data so far to make a statement.
Evan Seigerman
Fair enough, fair enough.
Stéphane Bancel
I think we should not forget that the world is going to be supply constrained for a long time, for a long time. And so what the government might decide when they get the data is who gets what vaccine because as I said earlier, over 90% efficacy that Pfizer has reported, nobody knows outside the company, and I don't even how if the company knows at this stage given how the independent committee work.
Well, is it -- do we start to some signal in term of -- is it a certain population that did not respond? Or is it across the board? That's going to be a very important decision to make allocation and who gets the vaccine. I think it would be the same with Moderna vaccine. And this -- we just need to wait for the data. It's very hard for me to comment.
What is clear is the reason governments have been -- portfolios is no company can supply the world in the next 6 months. It's impossible capacity-wise. The math doesn't work.
Evan Seigerman
Right. Okay. And then just one other thought just on disclosure and what to look forward to. So when you get that interim look, hopefully the data is positive, are you planning on press releasing that and so we all will know? Is -- any thoughts there? Or is it still TBD?
Stéphane Bancel
Yes. Now what we've already ensured since the beginning of this chase after this virus is wanted to ensure transparency. As you know, we published in Nature, in New England Journal. As soon as we get the data, we will get it out for a press release a bit like Pfizer did earlier this week. We think it's important for the world to know. There's a lot of planning that needs to happen across the board. And so we'll get the data out as soon as we know it.
Evan Seigerman
Excellent. And with that, any other final comments on COVID-19 before we move on to the rest of your pipeline?
Stéphane Bancel
No. I think we've covered a lot, Evan.
Evan Seigerman
We've covered everything?
David Meline
Yes. We've covered a lot, yes.
Evan Seigerman
I know it's of high interest. So I do want to spend some time on CMV. So COVID has actually accelerated development of some of your other programs, including CMV. Can you remind us kind of how you think about this opportunity, the unmet need? And what differentiates your platform and why other companies have been unsuccessful for so many years?
Stéphane Bancel
Yes. It's a great question, Evan, and I'm very excited about the CMV product myself. I've been kind of chaperoning this product across the company for a long time.
So CMV, cytomegalovirus, is known to a lot of people in the biotech industry because of transplants. But the number one cause of birth defect in the developed world is because a CMV-negative woman, i.e., a woman who has not been infected by CMV before, gets infected during her pregnancy. And she will transmit the virus to her baby because she has no antibody to which she is not able to fight the virus, and the baby could be born during -- could die during pregnancy or be born with very serious disease, microcephaly, so small brain. Sometimes they've gone blind or deaf. We've got cases that we talk to mothers who lost their baby 1 or 2 month after birth, sometime never leaving the hospital, just battling the virus as the baby was born prematurely. And there is no vaccine that has worked.
So the reason the vaccine have worked -- this is a very complicated virus. As I mentioned briefly in my comments, and this is complicated, so I should do that again slowly, is one of the protein or the antigen that the experts in infectious disease believe is very important to provide protection is this pentamer. That's the name of the protein complex.
And as I said, it's 5 protein coming together. It is a very, very complex structure. And what scientists believe is you need an antibody in your system against the pentamer, a binding antibody that would bind to the pentamer, a bit like the Spike binds to a COVID, to neutralize the virus in addition to gB. gB is yet another protein. And there's a lot of derisking going on in gB because Sanofi ran a Phase II, and they had a 50% protection. It's 50% efficacy with gB alone. So there is gB in our vaccine because there's a good derisking that gB is important. But gB clearly was not enough.
There's been a lot of work that had happened, and there's very good, I think, alignment in the scientific community that a vaccine having gB and pentamer should have a much higher efficacy than gB alone at 50% in the clinic. And that's exactly what our product has. It has 6 mRNA in each vial, 1 coding for gB, 5 coding for each component of pentamer. We have shown and published that we make a functional pentamer, which is kind of science fiction when you think about it. You have 5 mRNA that have to make 5 protein in the same cell, and those proteins have to self-assemble into that complex.
And then it has -- it's a membrane-bound protein. So basically, it's attached to a cell membrane, showing to the B cell that you're going to make neutralizing antibodies, and we've shown that. We've shown very long protection, and we show very high concentration of those neutralizing antibody, way higher than we thought.
We always have lack of medical experts and our advisers. The target? To make as much antibodies as CMV-positive adults. Why? Because CMV-positive women, most of them either get reinfected during pregnancy, do not transmit the virus to their baby. So we use a CMV-positive antibody level as what we should shoot for. And we were very pleased when we get 3, 4x more antibodies than what is used. And even in the CMV positive, we boosted them tremendously. So that gives us a lot of hope that the vaccine should have more than 50% efficacy, especially because of the Sanofi gB clinical data. And so we are gearing up to start the Phase III next year and to get this space be done as fast as we can. As I said, we believe it's
$2 billion to $5 billion annual peak sales opportunity.
We think there's at least 3 indication in this product. The first one will be woman in the edge of bearing a child. The Phase III is anticipated to be 16- to 40-years-old woman into that clinical study. And that will be the first indication we'll go after, obviously.
The second one is teenagers. And think about it like HPV. My dream, my target product profile, is you go -- a teenager goes to the doctor for an HPV shot, and in the other arm, they get a CMV shot. Actually, if you look at it, the vaccine have been put on the same schedule to make it easy for prime and boosting at the same time. So that's the second indication that, of course, will increase the size of the market materially.
And the third one is toddlers. So why is that? Well, what most people don't realize is the reservoir for CMV are humans like Zika is mosquito and fluids birds and pigs and so on. Well, CMV, the reservoir is human like it was for rubella. And if you think about it, rubella was totally eradicated from the world. Why? Because every newborn gets an MMR shot and the R is for rubella.
Evan Seigerman
Yes.
Stéphane Bancel
And if you look at the data, it's really wonderful. When it was launched in the late '60s, you see the drop in birth defect caused by rubella. It just went like dropped like a rock. It was wonderful. And so we think the same thing can happen with CMV because given you may have reservoirs, if you can vaccinate toddlers before they go to daycare, because it's when they start to see the outside the world, outside the home, and get exposed to viruses, you should be able to eradicate CMV. And that will be, of course, wonderful because, as we said, there's the impact on birth defect. There's as well the impact, as we know, for transplants. For people who go through transplants, CMV is always a big worry clinicians have for rejection of a transplant.
And then there's even some more long-term opportunity for which there is a lot of work that needs to happen. But if you look at some longitudinal studies that have been done, for example, in Sweden that followed population for more than 20 years, and what they've shown is people that are CMV-positive adults tend to live not as many years in life expectancy than people that are CMV negative. And what they showed that is very interesting is that as you age, more and more of your T cell are used to keep CMV in check. So if you look at T cell usage against CMV over time, over your age, by decades of life, you see a huge increase of the number of T cells that if you are CMV infected, because CMV is a DNA virus, if you get infected once, you are infected CMV for your lifetime.
And so what is very interesting is, could there be an opportunity, once the product is approved first in women in the age of bearing a child, to partner with payers and governments like Sweden, Switzerland, Singapore that are very kind of proactive, forward looking and will give us access to a country-wide database where you could potentially vaccinate healthy adults and track them over time? So of course, it's not for the short term but should be able to show that benefit because you can see even a reduction in cancer in people that are CMV negative.
And if you go back to mechanism, which is, if it is true that as you age, more and more of your T cell are used to keep your CMV in check, then it kind of makes sense that you should see more people with cancer that are CMV positive because their T cells are busy fighting their CMV inside their body versus people that are CMV negative.
So again, it's just observation study at this stage. It has not been proven. But we think there's a lot of leg to the science that we will have to partner with governments to prove or disprove it.
Evan Seigerman
Right. So there's a lot of opportunity there. Can you just remind us kind of the next steps in the nearer-term opportunity with pregnant women, when we should expect additional data and kind of the time lines for that program?
Stéphane Bancel
Yes. So CMV, we shared the Phase II data. We shared the long-term duration of protection in the Phase I. We'll do the same thing in the Phase II. When we get to those kind of 1-year time point or 2-year time points, we'll share those out. But the big thing for us is to start of -- a placebo-controlled Phase III study in '21. Recruiting that study, I would say, should be up to 8,000 people and following up the women to get the cases. And as soon as we get the data, hopefully it's positive, to file a BLA for that indication. Given there's nothing out there, I will expect to potentially have an accelerated BLA review at the FDA. So that's how we think about CMV.
Evan Seigerman
So that could be your second commercialized product if you include COVID?
Stéphane Bancel
It could. The other piece that is interesting is you could have, in the middle coming, flu. We announced at our R&D Day that given the very high neutralizing antibody that we saw in the elderly for COVID and that we saw them for 100% of the participants, that we think we have a big role to play in shaping the flu market.
If you think about flu, the efficacy is 30% to 60% depending on the year. A very big burden of disease in the elderly like we see for COVID or RSV. So what if we could have a vaccine against flu that has a very high efficacy in the elderly?
So we think we should go after this opportunity because you can run a full Phase III just in one winter. It will most probably be faster than the CMV to run. We've also had a lot of learning about how can quickly can you do in vaccine by taking business risk. And if we get the COVID vaccine with high efficacy -- because mRNA is a platform.
Evan Seigerman
Right.
Stéphane Bancel
mRNA is an information molecule. If COVID has high efficacy, it makes no scientific sense that if we design flu correctly, picking the right antigen, that flu will not have high efficacy as well. It's the same chemistry for mRNA, the same chemistry from lipid, the same manufacturing process. Exactly the same.
Evan Seigerman
And with flu, I guess, what are the next steps in that program? Because that could be of high interest if you're able to get a better flu vaccine than what we currently have.
Stéphane Bancel
Yes. Again, I think it goes back to Moderna's strategy, which is focused on best-in-class product or first in class. So the next steps is get this into the clinic quickly, run a very quick Phase II and maybe we're going to run Phase I/II where you do your dose finding in Phase I. When you get your dose, you expand it into a Phase II to get enough of a safety database. If you look at COVID, it was 600 people. That happened pretty quickly in healthy volunteers. And then when you have that data, you basically go around the pivotal.
Evan Seigerman
Right.
Stéphane Bancel
And pivotal needs 1 season, 1 winter season.
Evan Seigerman
And kind of closing the loop on infectious disease because I want to mention cancer in our final couple of minutes, do you see any supply constraints to run the CMV program or the seasonal flu program because of all your work in COVID and really ramping up the supply to vaccinate the essentially entire population?
Stéphane Bancel
Yes. In term of manufacturing supply, I don't think so just because of -- the numbers are orders of magnitude different. If you look at the CMV Phase III, as I said, it's 8,000 people type of Phase III. We're planning to make 20 million doses on COVID by the end of the year, 500 million to 1 billion dose next year. So as you can see, 8,000 doses on -- to make the CMV vaccine is a drop in the bucket.
And what we've done in our plant is we've segregated the teams and the manufacturing suites that are working on COVID versus those that are still supporting the pipeline. So we have not compromised the integrity or the speed of the rest of the pipeline because of COVID.
Evan Seigerman
Okay. No, that's very helpful. And then I want to touch on cancer. So you had some -- you had press released your presentation at SITC. Why don't you kind of at a high level explain how your platform can be used in cancer because it is somewhat different than your infectious disease platform?
Stéphane Bancel
Yes. So I think for people, the way to think about cancer with what is in development today, we're still working on more interesting stuff in the labs.
But what is in development today is basically 2 very different approaches. One is about making a cancer vaccine, where the idea is to vaccinate you against the epitope of the mutation of your cancer. So it's either a single mutation ala KRAS or it's a personalized cancer vaccine like what we call PCV, where basically we take a biopsy of somebody's tumor; we take a healthy cell from the same person; we next-gen sequence all the letters of the DNA of those 2 cell, the cancer cell and the healthy cell; we send both to the AWS or Amazon; we compare what the mutations are by looking at the DNA sequence; and then it drops down into our factory, where we pick the 32 most important mutation that are seen by your immune system on the outside of your cells. We don't use protein mutation that are inside your cells because your T cell don't see that.
And we design in around 60 days like we've shown, and we use the same manufacturing tool for the COVID Phase I. In around 60 days, a needle to needle, so from getting a biopsy out of your body to injecting in your arm the product, we're able to make a product just for you. And that product -- our target product profile vision is to combine it with a commercial checkpoint. So in our case, we've combined it with KEYTRUDA because we partner with Merck. And the idea is very simple, is to say, could you improve the response rates of cancer patients versus KEYTRUDA monotherapy? As we all know, the checkpoints have been wonderful when people respond to a select miracle because you get complete response. But we want to solve for the patients who don't respond to checkpoint's monotherapy.
And so what we are doing now after having some interesting signal in term of T cell and reaction to the epitopes in the Phase I that was printed at ASCO, ensuring that the personalized cancer vaccine is very safe. If you think about it, it's the same technology as the COVID or CMV vaccine, same lipid, same mRNA. Just you -- we got 4 different instruction, in that case the epitope of somebody's DNA.
And the idea is running basically head-to-head placebo control studies like we're now with Phase II now on melanoma, where one arm is KEYTRUDA monotherapy and the other arm is KEYTRUDA plus PCV with a very simple question: can you improve survival? Can you improve complete response versus the standard of care, which is monotherapy?
This morning, news is interesting because it's on a new tumor type. The Phase II on PCV that has been launched is on melanoma. But this morning, good news is on head and neck. We showed 5 out of 10 of our patients had a response. That's really important because the standard of care of monotherapy is lower than that. It's a small N, very small N. But as we all do in cancer, all the companies, is you want to chase that signal when you have a signal to see is it real or not. It is too early to tell. It is just encouraging data. And so what we're going to do now is just increase the N. The investigators at the sites are quite excited by the early data, and we need to now figure out, is that signal real or not?
Evan Seigerman
Excellent. And then I know we're hitting kind of our allotted time, so -- but I did want to touch on your collaboration with Vertex, one of the companies that I also follow. This is very different than infectious disease and personalized cancer vaccine. Can you just kind of at a high level explain what you're trying to do and how your technology can be best suited to treat patients with cystic fibrosis who are not amenable to potentiate or corrector therapy?
Stéphane Bancel
Yes. It's a great question, Evan. And actually, we have 2 partnership with Vertex.
Evan Seigerman
Right. Of course.
Stéphane Bancel
On both of them by chronological order. So the first partnership we did with Vertex was can we deliver through the mouth into the lung mRNA to give the full functional CFTR protein to those kids. So that -- we don't really care which mutation they have because we're going to give them the full CFTR protein that all of us on the call have. And that's where we started with Vertex.
We announced through the year and the end of last year that we made very good progress, and we are cautiously optimistic that we should be able to get to a place where we decide with Vertex to take a to take a candidate into the clinic because of all the great progress that have happened in preclinical models to deliver into the lung. There's been a lot of work our team have done around formulation. It was not easy, but we are cautiously optimistic that we should get there.
So that was our first partnership with Vertex, which hopefully, when the joint teams feel comfortable it's ready to get to the clinic, we'll declare a candidate, take it into dogs and into human.
The more recent partnership that we announced at our R&D Day in September this year is to use the same delivery technology that we developed to get into the lung but, in that case, to do gene editing. And the idea, of course, would be to go and to correct the disease into the DNA of those kids. And it's why it shows you the potential of Moderna's mRNA platform in the long term, because in that case we want to use mRNA to code for things like Cas9.
We have not decided yet with the Vertex team which system we're going to use to go do with gene editing. I just used Cas9 as an example of a system that is very well known for gene editing. But we basically are going to use mRNA to code for those enzymes to be able to do the editing. And in the same formulation, we can, of course, bring the material to repair the DNA, and that's exactly what we are trying to do.
For Moderna, it's extremely exciting for the long term because it could mean that we could move beyond just providing a transient protein like we do in cancer and in infectious disease and potentially use mRNA to do gene editing where we don't have to use other technology.
If you think about Moderna really, Evan, we have become a delivery company. The big change with nucleic acid over the last 20 years, gene therapy, RNAi, mRNA, has always been delivery. How do you bring the genetic material into human cells without safety issue?
If you look at our investment, around 2/3 of our platform investments are in formulation. So today, we have a lot of different formulations. We keep investing for new space. And I think this is where you're starting to see the long-term benefit of Moderna, is when you get a formulation to work, you can scale very quickly because when the drug in that same applications become copy and paste, you use genetic information to find a target and the human genome has been sequenced, and you put that into a system and you go again. That's why we were able to move so fast on COVID and the tenth vaccine. Since then, we put an 11th vaccine for RSV into the clinic. And so this is why I think the company can scale us so quickly, because of our investment in formulation.
Evan Seigerman
Excellent. And with that, we are out of time, but I really appreciate your time this morning, Stéphane. I know you're very busy trying to get us a COVID vaccine so we can actually meet in person next year.
Thank you, Dave, for joining us. Nice to see you and hopefully to see you in person, too. And Lavina, of course, thank you for arranging this. We really appreciate it. And with that, I'll
Stéphane Bancel
Thanks, Evan.
Evan Seigerman
Of course. And we'll talk soon, I'm sure. And I'm rooting for you guys. So thank you.
Stéphane Bancel
Thank you.
Evan Seigerman
Excellent. Bye now.
Lavina Talukdar
Okay. Bye.
Evan Seigerman
Thank you. Have a good one.
