Moderna, Inc. (MRNA) Q1 2025 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Moderna First Quarter 2025 Conference Call. [Operator Instructions] Please be advised, today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lavina Talukdar, Head of Investor Relations at Moderna. Please go ahead.

Thank you, Kevin. Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's First Quarter 2025 financial results and business updates. You can access the press release issued this morning as well as the slides that we will be reviewing by going to the Investors section of our website. On today's call are Stephane Bancel, our Chief Executive Officer; Stephen Hoge, our President; and Jamey Mock, our Chief Financial Officer. Before we begin, please note that this conference call will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see Slide 2 of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. With that, I will now turn the call over to Stephane. Stéphane Bancel: Thank you, Lavina. Good morning or good afternoon, everyone. Thank you for joining us today. I will start with a review of our business in Q1. Jamey will present our financial results and our outlook. Stephen will review our clinical programs and I will come back to some key priorities and catalysts before we take your questions. Let me start with a review of our financials. Our Q1 revenues were $0.1 billion, had a loss of $1 billion. These were in line with our expectations and reflect the highly seasonal nature of our respiratory vaccine business. We ended the quarter with $8.4 billion in cash and investments. As you are aware, we are focused on financial discipline. I'm pleased to announce that continued cost reduction efforts in the first quarter of 2025 led to a 19% reduction of cost of sales, R&D, SG&A combined compared to the first quarter of 2024. I would like to thank our team for a great work. Stéphane Bancel: During the quarter, we made solid progress against our 3 priorities: priority number one, expanded markets for commercial products. Earlier this year, we were awarded a tender opportunity, allowing us to compete for COVID vaccine business in Europe. Additionally, during the quarter, mRESVIA received approvals in Australia, in Taiwan and in the U.K. and most recently, in Switzerland. This is in addition to a program we received in 2024 in the U.S., EU and Canada. Our second priority, advancing of pipeline to drive sales growth and diversification. I am excited to announce the expansion of our oncology portfolio with Checkpoint medicine, which Stephen will review later. For Phase III flu program, we have exceeded the required number of case accruals to run an interim vaccine efficacy analysis. We also projected encouraging data from our key programs, including RSV, CMV and IAC at recent medical conferences. We are pleased to share that IAC will now be known by the INN OR International Nonproprietary Name as Intismeran autogene. This is in addition reflects the growing maturity of our product development program and marks an important milestone as we continue advancing towards potential regulatory approvals. And finally, on our third priority, executing with financial discipline. The first quarter of 2025 marks the third consecutive quarter where we reduced combined R&D, SG&A expenses by double digits year-over-year. With that, let me turn to Jamey.

Thanks, Stephane, and welcome, everyone. Today, I'll cover our first quarter financial results. our full year outlook and an updated operating cost framework as we look ahead to 2026 and 2027. Let's start with our first quarter financial results shown on Slide 7. Net product sales were $86 million, driven primarily by COVID vaccine sales. The U.S. accounted for about 1/3 of total sales with the remainder from international markets. This result was in line with expectations given the seasonal nature of respiratory vaccines with most sales anticipated in the second half of the year. We observed lower vaccination rates compared to Q1 last year, reflecting the continued transition of COVID into routine seasonal vaccination patterns. In addition to product sales, we recorded $22 million of other revenue, bringing total revenue for the quarter to $108 million, a decrease of 35% year-over-year, but in line with expectations. Cost of sales for the quarter was $90 million compared to the first quarter of 2024, cost of sales decreased $6 million, primarily due to lower sales volume. While total cost of sales declined year-over-year, it represented 104% of net product sales this quarter, up from 58% in the prior year, driven by lower volume and revenue mix. R&D expenses were $856 million, a 19% decrease year-over-year. The decline was mainly driven by lower clinical development spend across our respiratory programs reflecting the timing of trial activity and the wind down of certain studies. This was partially offset by continued investment in our norovirus program and oncology. SG&A expenses were $212 million, down 23% year-over-year. The decrease was driven by broad-based cost reductions. These reductions reflect our continued focus on streamlining operations and managing costs across the organization. We recognized an income tax provision of $7 million in the first quarter. Similar to the prior year, the provision was not material due to the continued valuation allowance on our global deferred tax assets. which limits our ability to recognize tax benefits from the loss. Net loss for the quarter was $1 billion, a $204 million improvement compared to a $1.2 billion loss in the first quarter of 2024. Loss per share was $2.52, an improvement from a loss of $3.07 in the prior year period. We ended the quarter with cash, cash equivalents and investments totaling $8.4 billion. compared to $9.5 billion at the end of Q4. The decrease was primarily driven by the operating loss for the quarter.

Now let's turn to our financial framework for 2025 on Slide 8. Our expectations for the full year 2025 remain unchanged from our initial guidance in February. We still expect total revenue in 2025 to be in the range of $1.5 billion to $2.5 billion with first half sales of approximately $0.2 billion, reflecting the seasonality of our respiratory vaccine business. As a reminder, the wide range of our guidance reflects the uncertainties in vaccination rates, the competitive market environment, the size of the RSV market and timing of licensure of our factories and product approvals in Australia, Canada and the U.K. As previously shared, while we filed 3 products with the FDA in 2024, since we don't know the timing of potential approvals, we are not including any new product revenue in our guidance range. Cost of sales is projected to be approximately $1.2 billion, reflecting continued improvements in manufacturing efficiency, and lower expected inventory write-offs, offset by increased costs associated with the go-live of our new manufacturing sites in Australia, Canada and the U.K.. I'll now provide some perspective on the newly introduced global tariffs, those in action as of today have not had a significant direct impact on Moderna. All of our drug substance for the U.S. market is manufactured at our facilities in Massachusetts. Our commercial drug substance has been shipped overseas for fill/finish operations before shipment to the final customers. Internationally, our new plants in Australia, Canada and the U.K. are expected to be outlined in 2025 to supply local markets. Finally, material sourced from China are not material to our total cost base. R&D expenses are anticipated to be approximately $4.1 billion as we continue to invest in our late-stage pipeline while maintaining financial discipline. SG&A expenses are expected to be approximately $1.1 billion, reflecting a continued focus on efficiency while supporting our commercial execution. While we are pleased with the cost reductions that we achieved in both R&D and SG&A during the first quarter of 2025, it is still early in the year, and we are not updating our full year expense guidance at this time. That being said, it is a strong start to the year, and we are looking to accelerate additional cost reductions in 2025. We expect taxes to be negligible in 2025 and capital expenditures are projected to be approximately $400 million. And we still expect to end 2025 with approximately $6 billion in cash and investments.

Beyond 2025, we are announcing today our plan to drive an additional $1.4 billion to $1.7 billion of cost reductions by 2027 as part of our commitment to achieve our 2028 breakeven target on a cash cost basis. To that end, we are reducing our 2026 GAAP operating expense forecast from $5.9 billion to a range of $5.4 billion to $5.7 billion. This guidance includes $0.9 billion of noncash charges from stock-based compensation, depreciation and amortization. Excluding these items, we now project a 2026 cash cost of approximately $4.7 billion at the midpoint of the range. We are also planning to reduce 2027 GAAP expenses to between $4.7 billion and $5 billion, with a 2027 cash cost of approximately $4.2 billion at the midpoint of the range, excluding stock-based compensation, depreciation and amortization. Stepping back from 2023 to 2027, we are planning a total reduction in annual GAAP expenses of over $6 billion, which represents a 55% reduction over 4 years from $11 billion annually in 2023 to $5 billion or less in 2027. The first $4 billion of GAAP expense reductions were realized in 2024, with the largest driver coming from reductions in our cost of sales when we undertook a strategic initiative in the second half of 2023 to restructure our manufacturing footprint to better optimize for endemic level demand of our COVID vaccine. We also reduced SG&A by 24% from 2023 to 2024 through a variety of cost-out initiatives throughout the company, and R&D declined 6% year-over-year to $4.5 billion in 2024. While we are continuing to drive additional cost reductions and efficiency gains in both cost of sales and SG&A, the largest future source of cost reductions will come from R&D, which currently represents nearly 2/3 of our expense base. This projected decline in R&D expense will come from the completion and wind down of our ongoing Phase III trials, procurement savings from contract renegotiations and other process efficiencies. In summary, we are encouraged by the progress we've made in our cost-out initiatives to date. As Stephane mentioned, we now have had 3 consecutive quarters of double-digit year-over-year declines in combined R&D and SG&A expenses. Our teams continue to identify and act on new savings opportunities, which gives us the confidence in meeting our new 2026 and 2027 cost targets. With that, I will now turn the call over to Stephen.

Thank you, Jamey. Good morning or good afternoon, everyone. Today, I will review progress across our pipeline. Slide 11 is a review of our prioritized pipeline, which was introduced at our R&D Day last September. As you know, we have since filed for regulatory approvals for 3 of these programs: our next-generation COVID vaccine, mRNA-1283, our RSV vaccine for high-risk adults aged 18 to 59, mRNA-1345 and our Flu + COVID combination vaccine for individuals aged 50 and over or mRNA-1083. As part of our ongoing portfolio optimization, we've made a strategic decision to deprioritized the Flu-COVID combination vaccine for younger adults, those aged 18 to 49. While we remain committed to the long-term potential of combination respiratory vaccines, we are going to be focusing our efforts on combination vaccines in the older adult population for now. At the same time, we are excited to announce the advancement of our oncology pipeline with the addition of the checkpoint program. The prioritization of this Phase II program is based on early but encouraging data and is consistent with our strategy to build our therapeutics pipeline, particularly in oncology. We are targeting filings for checkpoint and the other 6 programs on the right-hand side of this slide by 2028, subject as always to data and regulatory consultations.

Moving to Slide 13, which outlines the latest developments in our submitted regulatory filings late last year for 3 programs. Our Next-gen COVID vaccine has a PDUFA date of May 31. The age group expansion for our RSV vaccine has a PDUFA date of June 12, and we look forward to decisions on both products in the coming months. For our Flu-COVID combination vaccine, we received a November 2025 PDUFA date. However, following feedback from the FDA during the review, the Flu vaccine efficacy data will now be needed to support the application. As a result, we now expect the review time line to be extended into 2026 and be dependent upon positive Phase III efficacy results from our ongoing flu vaccine trial and the addition of these data to the submission. And on that point, our stand-alone Flu vaccine candidate, mRNA-1010, is in its Phase III efficacy study and due to the intensity of the current flu season, has now exceeded the required number of case accruals to support the interim efficacy analysis, which we expect to complete now by this summer.

Now turning to our nonrespiratory vaccine and rare disease portfolio. For our CMV vaccine, we recently presented durability data from our Phase II study at the ESMI conference, demonstrating that mRNA-1647 continues to elicit robust antibody responses for 3 years post vaccination, showing very strong durability. We also had the opportunity to share these findings along with an overview of our CMV program at the inaugural CMV Vaccines Work Group as a part of the April ACIP meetings. We're encouraged by the establishment of this work group, which reflects the growing recognition of CMV as a significant public health concern and a commitment to reducing the disease burden of CMV. Our Phase III CMV efficacy study for mRNA-1647 continues to accrue cases. We remain blinded to the study results at this time and expect the final efficacy analysis to come later this year. For norovirus, we are pleased to note that the FDA clinical hold for our Phase III trial was lifted during the quarter. The study is fully enrolled in the Northern Hemisphere, and we are continuing to enroll in the Southern Hemisphere. The Phase III efficacy readout for norovirus is dependent upon case accruals. And given the uncertainty of that timing, the targeted approval could be in 2026 or 2027, depending upon that readout. In rare diseases, our propionic acidemia or PA program is currently in a registrational study. We've made good progress with regulators and with enrollment. Following review of program time lines and other aspects of the launch, we now anticipate a 2027 approval. Similarly, for methylmalonic acidemia, or MMA, we've finalized the registrational study design with the FDA, and we plan to initiate that trial in 2025. We expect the potential for approval for MMA in 2028.

We continue to advance our oncology portfolio, with significant progress across our individualized neoantigen therapy program, Intismeran, our checkpoint program and our early-stage oncology programs. In collaboration with Merck, we have several late-stage studies underway for Intismeran. As a reminder, the Phase III trial in adjuvant melanoma is now fully enrolled. We also have 2 Phase III studies in non-small cell lung cancer, both evaluating Intismeran in combination with KEYTRUDA in patients with and without prior neoadjuvant treatment. Additionally, we're conducting randomized Phase II trials in adjuvant high-risk muscle invasive bladder cancer and adjuvant renal cell carcinoma. I'm happy to announce that the Phase II adjuvant renal cell carcinoma study is now also fully enrolled. We're also expanding the scope of our Intismeran program into earlier stages of disease with the addition of a new Phase II study that moves beyond the adjuvant setting. This study evaluates Intismeran as monotherapy or in combination with BCG, the standard of care in high-risk non-muscle invasive bladder cancer and will help us explore Intismeran's potential in earlier disease settings beyond the adjuvant landscape.

As I mentioned a moment ago, we have prioritized advancement of our checkpoint program based on encouraging early clinical results. The program is currently being evaluated in a Phase II study for both first-line metastatic melanoma and first-line metastatic non-small cell lung cancer. I'll review the details of that program on the next slide. We're also advancing 2 novel cancer antigen therapies to the clinic. mRNA-4106 is a tumor-targeted antigen therapy designed to direct the immune system against multiple shared tumor antigens. The first patient has been dosed in a Phase I study in solid tumors that is assessing safety, pharmacodynamics, immunogenicity and preliminary efficacy for the program. And we have an open IND for mRNA-4203, which is designed to boost the activity of an engineered T cell therapy to improve its persistence and effectiveness. This program is being developed in collaboration with Immatics. These cancer antigen therapies, checkpoint, mRNA-4106 and mRNA-4203 are off-the-shelf therapies in contrast with Intismeran, which is an individualized cancer treatment. These programs reflect our growing oncology pipeline with more coming soon.

Now let me provide an overview of the checkpoint program, mRNA-4359, starting with its mechanism of action. Checkpoint is designed to help a patient's immune system recognize and attack tumor cells by encoding mRNA-based cancer antigens for PD-L1 and IDO. The therapy trains the immune system to recognize upregulation of PD-L1 and IDO by cancer cells and immunosuppressive regulatory T cells. By combining this targeted immune activation therapy with checkpoint inhibition with traditional antibodies such as KEYTRUDA, we aim to enhance the antitumor response, overcoming immune evasion and improving the depth and durability of responses. Checkpoint is being evaluated in a Phase I/II clinical study, which is now moving forward and enrolling the Phase II portion. This study is designed to assess the safety and tolerability of checkpoint, both as a monotherapy and in combination with KEYTRUDA in first-line metastatic non-small cell lung cancer and first-line metastatic melanoma. Key efficacy endpoints will include objective response rate, disease control rate, duration of response and progression-free survival. It is an open-label study. In addition to clinical outcomes, we are evaluating T cell profile changes, both in the peripheral blood and within the tumor microenvironment to better understand mRNA-4359's mechanism of action. We shared early Phase Ia data at the ESMO Medical Congress in late 2024, and we're excited and looking forward to sharing the data from the Phase Ib portion of the study at a medical conference later this year. Based on the early encouraging results, we plan to expand checkpoint into multiple additional cancer indications. With that review, I will now hand it over to Stéphane. Stéphane Bancel: Thank you, Stephen and Jamey. We are focused on 3 priorities: Part 1 drive sales of approved products. Priority 2, focus on our late-stage pipeline to drive sales growth and diversification; priority 3, delivering on our cost efficiency across the entire business. Our first priorities will drive use of mNEXSPIKE, Spikevax and mRESVIA vaccines. We entered the third quarter of 2025 with 3 approved products in the U.S., and we are seeing a growing number of approvals in countries worldwide. For priority 2, we are focused on delivering up to 10 products approval, which we believe will drive sales growth. Together, these 10 anticipated product target a total addressable market of over $30 billion. In Q2, we secured U.S. approvals for mNEXSPIKE and mRESVIA, for high risk people, and we had exciting data in flu, enabling flu and flu COVID combo. On the cost side of the house, we've demonstrated our commitment to cost discipline for reduction achieved in last year in 2024 and also in 2025 to date. We remain confident in our ability to further streamline our operational structure for the remaining of '25 to 2027. Jamey just took you through our plans to cut an additional $400 million of our 2025 cost structure, and we are not done. We have many new projects in the works to reduce cost further. These cost reduction activities we have in place gives us even greater confidence in our plan to reduce our cash cost to $4.2 billion in 2027. These actions are very important to help us achieve our cash breakeven targets in 2028. As we make these cost improvements, we are seeing continued use of AI across Moderna. We rolled out GPT Enterprise in 2024 and established widespread GPT literacy across the entire organization. Today, 100% of our knowledge workers are active daily users of ChatGPT. As you can see on Slide 22, GPT users have grown very fast at the company. And in 2025, we enhanced AI tools to allow for deep research capabilities allowing for the creation of comprehensive report without compromised quality of output. An example of a deep research application is the creation of target product profiles. This AI-based activity greatly reduces the amount of time it takes on product planners to create marketing strategies. We're excited about how AI has already improved our business. And given the doubling of AI capabilities every 6 to 7 months, we are working hard to continue to reinvent our company across each business process, department and team. We're excited about the coming months and quarters as we have a lot of important catalysts. First, of course, the potential approvals of seasonal flu and the flu plus COVID combo programs based on the data Stephen shared with you. We're also eager to get the CMV Phase III efficacy data later this year. Norovirus Phase III readout is, of course, subject to case accruals. In oncology, we look forward to the readout of our ongoing intismeran Phase II 5-year durability data in adjuvant melanoma. And of course, we look forward to a Phase III adjuvant melanoma trial readout for Intismeran. Stephen said, in oncology, we are looking forward to sharing the checkpoint Phase Ib data at ESMO in Berlin in October. And at a later date, we look forward to sharing the Phase II data of this program. PA is already in restriction study and MMA will be very soon. I am very thankful to our team for the progress achieved so far across commercial organization, our late-stage pipeline and the great cost reduction efforts across the company. This work allows to be focused on our mission. To deliver the greatest possible impact to people for mRNA medicine. With this, operator, we'll be happy to take questions.

[Operator Instructions] Our first question comes from Salveen Richter with Goldman Sachs.

As we look to the expense management on the forward here, can you help us understand what's being deprioritized or changed to allow for these changes? And then secondly, in accordance with kind of Roivant and the IP dynamics that are playing out here, can you just frame your strategy here on the forward as we look to 2026?

Sure. Salveen, thanks for the question. So I'll take the first one. So it depends on your reference point in terms of what you talk about from a cost-out perspective. Over the last few years, as I mentioned, we're down 50% from a cash cost basis. But if I'm more recent in our recent $500 million to $700 million reduction, that's split evenly across R&D and cost of sales. So cost of sales is purely driving efficiencies. Everything that the teams are hard at work and have been hard at work doing, they're just accelerating and getting it done faster. So that's unutilized manufacturing capacity, that is all the waste that we saw in materials, they're doing a great job reducing that, driving productivity within the labor force. So that's not really a deprioritized investment. On R&D, it's a bit of both. The execution of our clinical trials has been much more efficient. We've talked in the past about the fact that we were operating for speed and this time, we are operating for cost as well and efficiency. So a lot of this is just the execution of our trials. But we are making decisions here and there to not continue to advance to Phase II or Phase IIIs or even out of Phase I here and there. Broadly, we're taking down our -- just big picture story from the last couple of years. Our large Phase III vaccine trials are really running down and winding down, including CMV recently and flu combination vaccine. And after that, we are moving into oncology, which is a different amount of patients that are under those trials. So there is some prioritization in there, as we've always said, but a lot of it is also execution, but we still have prioritized our pipeline. So we are excited about the 9 or 10 late-stage programs that we have that Stephen highlighted in his prepared remarks, and we look forward to continuing to take out additional costs, and we do see that coming down over the coming years, and we'll update you more at Analyst Day. Stéphane Bancel: On Arbutus, the trial in the U.S. is scheduled for March 9, 2026. We remain confident in the groundbreaking technology we pioneered, including our lipid nanoparticle delivery system. We are vigorously defending the case and responding to new filings outside the U.S. We believe that our technology does not infringe any valid patents asserted by Arbutus.

Our next question comes from Gena Wang with Barclays.

Maybe 2 very quick questions. First one is regarding the U.S. COVID revenue, $781 million. I assume majority of this basically is the inventory buildup or delivery to the pharmacists. So maybe how often do you track pharmacies to maintain their inventory? And what additional color you can share regarding your estimate of the revenue for the remaining of this year? And then second question is regarding the CMS -- sorry, CMV vaccine. So what is the learning there? Why immunogenicity data did not translate to clinical benefit?

Okay. So thanks, Gena. Good to hear from you. I'll take the U.S. sales. Yes. So ultimately, the end measure is vaccinations in the U.S. that is shots in arms. And so in the third quarter, yes, we ship a lot of our product into wholesalers and then they take it down to our end pharmacists, whether that's a retail pharmacy or an IDN network, a doctor or a physician's office. And so we track that almost daily. And really, what we put -- what Stephen shared with you on the screen is that's why we show shots in arms. We believe that's the ultimate measure. And if you look at season to date through October 24, shots in arms are down in the U.S., 30%. There's a lot of reasons for that, some of which we anticipated. And if I take this back to our guidance, when we originally guided at the beginning of the year, we said $1.5 billion in the U.S. sales, $1 billion to $1.5 billion. The $1.5 billion was essentially flat year-over-year for all aspects, whether it's market share, competitive dynamics, vaccination rates, et cetera, excluding a onetime item from the prior year. And the $1 billion, as I said, is down 33%. So we obviously anticipated that the vaccination rate, which is the largest variable here, could go down. And so now we've seen that go down, and we've reduced our range. So we said we believe vaccination rates will now be down 20% to 40%. And we are in the heart of the vaccination season, we're probably half to 2/3 of the way through. So we have good visibility to this. We are measuring shots in arms. We talked about our share as well. And we also look at every single day and every single week, is there more pull down? Is there more pull down to the physicians? Is there more pull down to retail? Are there more shipments even in the fourth quarter? So -- and we feel very comfortable with our range now of $1 billion to $1.3 billion, but we do not see vaccination rates in the U.S. getting back to flat, which is the change from the high end from going from $1.5 billion to $1.3 billion.

And Gena, I'll take the CMV question. So first, we really only have, at this point, the top line data from that trial. And over the coming weeks and months, we will get a tremendous amount of more information, including detailed information on a bunch of other -- on immunogenicity and potentially even Correlates of Protection and have the ability to generate hypotheses on what maybe didn't work. What I can say at this point is, as you know, going into the trial, we and the field had high hopes that a pentamer neutralizing antibody response, which had not been a part -- a strong pentamer neutralizing antibody response, which had not been a part of previous intismeran vaccine was going to be the missing piece for being able to prevent infection with a CMV vaccine. Prevention of infection with the herpes virus or in CMV was an incredibly high bar. It was a difficult bar to go after. But ultimately, the only one we thought that we could test that had a chance at meeting our target product profile for prevention of congenital CMV. So I guess what we can say at this point until we get that additional data is it looks like pentamer neutralizing antibodies weren't the missing piece and that it wasn't sufficient by itself to drive a dramatic improvement in the prevention of infection with CMV. Now we'll dig into the data as we get it over the coming months. Obviously, look forward to publishing it, sharing it at medical conferences and hopefully, the entire field can learn where vaccine development in CMV might need to go next. But ultimately, pentamer wasn't enough.

Our next question comes from Cory Kasimov with Evercore.

I shift gears over to the pipeline. I want to ask about your norovirus program. Are you surprised at all by the low case accruals here? Or is this kind of anticipated? And do you believe this offers any sort of reflection on the commercial opportunity or potential demand for the product should it be approved?

Thanks for the question, Cory. So predicting epidemiology in norovirus is still an early space. And so we had always designed the study as a potential 2-season study. In fact, we're -- we'd always expected that it was possibly going to be necessary. That happens in flu vaccines. That has happened in other respiratory vaccines, other vaccines based on case accrual happened to us here. I think we believe we're getting better at predicting where that epidemiology will be, where we cite the trials and ultimately being able to accrue cases that are matched to the vaccine composition. And I think we are hopeful that with this additional second season, which was always a possibility, that we'll be able to show -- accrue enough cases to conduct that IA and ultimately demonstrate the efficacy of the vaccine. The impact on commercial target product profile moving forward, I would say, we don't believe that there's been a change to that. At the end of the day, what matters here is hopefully a highly effective vaccine against preventing norovirus. It is a well-established burden of disease globally, and we do believe that the health economic benefit of prevention of severe to moderate infections with norovirus will be clear, particularly those that are at highest risk, including those that live in long-term care facilities or other -- for other occupational reasons might be at risk. So we still feel strongly about that target product profile and think that the epidemiology challenges of the last season will be addressable with the second season of enrollment.

Our next question comes from Luca Issi with RBC.

Congrats on the progress. Maybe, Jamey, can you just talk about what gives you confidence that you can reiterate your cash breakeven guide for 2028? I appreciate you're making some fantastic progress in terms of like managing the OpEx and the CapEx, but still your cash cost at the midpoint this year is $4.6 billion. So I think in order to breakeven in 2028, you really need your top line to reinflect quite materially from here. So can you just talk about that? I mean it looks like COVID is still declining. RSV, maybe it's one and done for now. CMV did not make it. INT initially is going to be just for adjuvant melanoma. So what are the near-term products that you think can really inflect the top line in the foreseeable future? And then maybe second, Stephane, quickly, I think a few media outlets have reported that Moderna is working on potential large deals with pharma, so wondering if you can comment on that. And then maybe bigger picture, what's your latest thinking on BD these days?

Thanks, Luca. There's a lot in there. And we recognize it's on everybody's mind, and we're going to lay this out at Analyst Day, just so you know. But I'll mention a couple of things here. When we say and we all commit to breaking even, it is both a mix, to your point, of revenue growth and cost reduction. And so on the cost reduction side, as I mentioned earlier to Salveen's question, we see ample opportunity. And I mentioned that we will update our 2026 and 2027 framework at Analyst Day, but there's still plenty to do on that front. On the revenue side, we have -- we see a lot through geographic expansion through our strategic partnerships that I mentioned in my prepared remarks, through new product introductions. We'll get -- we'll lay that out in a more fulsome way at Analyst Day, but we remain committed. But yes, it is a mix of both the revenue side growing as well as the cost side reducing, and we still feel confident in our plan. Stéphane Bancel: On the deal side, as we spoke about in several of our last calls, we really want to get products like the latent vaccine like EBV, for example, to patients. As we've said, part of our prioritization of our portfolio, we'd not want to fund a Phase III by ourselves. And so we are talking to pharma companies. We are talking to financial sponsors. As you know, we have a partnership with Blackstone that we did on flu, mRNA-1010. So those discussions are ongoing. And when we have something to communicate, we will.

Your next question comes from Tyler Van Buren with TD Cowen.

This is Greg on for Tyler. Do you have any early indications of what demand for COVID vaccines might look like this upcoming fall and winter season based on interactions with customers. Or will we need to wait to see early uptake at the end of this month or early next month?

Yes. Look, I think first, let's separate outside the U.S. versus inside the U.S. part of that question, I think that that's probably more focused on the U.S. But outside the U.S. many of our government customers are purchasing through advanced purchase agreements. And so those indications are pretty firm. You can see that in our even how we're guiding forward. And so some of those are under advanced purchase agreements. Others are under tenders that have been completed and published in those countries, and that feels quite stable. In the U.S., with customers, what I'd say is we saw a quite solid spring booster campaign. If you look from March 1 forward, the actual volumes in the spring booster campaign in the U.S. were only slightly down from last year. And if you actually look at the 65-plus population, which is the core population, we think, going forward, given the new labels and framework for recommendation, it was actually down only 1% or 2% from March 1 to the end of the quarter, June 30, which I think speaks to the realization that those at high risk of severe COVID-19 continue to be compliant with public health recommendations and want to protect themselves even in the spring campaign. That has been the same experience, therefore, of our customers in the retail channel and elsewhere where they have seen that evidence in the last 4 months. And as we look to the fall, we obviously have some uncertainty, both about what the ultimate ACIP recommendation will be, as well as some of the other market uncertainties that exist. But we all want to be prepared to deliver a season that could be in line with prior seasons if the trends continue from the spring till now. So we're going to remain cautiously optimistic. Certainly, our customers are preparing to make sure they have vaccines available if their customers and patients show up and the early signs are encouraging, but we need to be careful going into the fall. We think we really won't know until the end of the third quarter, until the end of September. As is always the case, for our seasonal business, which is we'll really get a clear picture in the first 6 weeks of the season as we launch.

Our next question comes from Geoffrey Meacham with Citigroup.

This is Charlie on for Geoffrey. 2 real quick questions. You mentioned additional cost-cutting area that you could target. You noted that R&D is a primary driver of costs right now. How might you balance the need to bring later-stage infectious products to market and also the need to shift away from seasonality factors that current products have? And then second, on CMV, did these secondary end points, the decision to add them, did they come on the back of interactions or discussions from FDA? Some color on that would be really helpful.

Thanks, Charlie. So I think the first question was on how are we balancing our late-stage pipeline. I mean we still think we are investing quite a bit in our late-stage pipeline. So $3.6 billion to $3.8 billion is still significant, particularly, we are very conscious of where we are from a revenue standpoint. And we've made this decision and really stood by it for the last 2 years. We laid this out in 2023 that we were going to invest in our late-stage pipeline, we continue to do that. We are actively adjusting as we go, and we will continue to adjust as we go. And that's why we're taking our cash costs from $9 billion down to $4 billion. But at the end of the day, you also mentioned seasonality. We think we are building a diversified portfolio that is not just seasonal. We do want to complete the respiratory portfolio that will be stronger when we have all the products together and give us more ability to compete. But then when you look at CMV, our oncology pipeline and our rare disease pipeline, those aren't as seasonal. And so we believe that we are balancing both the need to complete the respiratory portfolio, invest in our late-stage pipeline, and invest in diversification in the company. And we've been doing that for the last 2 years, and we'll continue to do it, but we have had to adjust it down. So we did have greater ambitions, but we will continue to adjust and have adjusted, and I think that's what we're seeing. Stéphane Bancel: And maybe just to add to Jamey's point, we've also said that we will not invest in Phase III studies for new latent vaccine. So as you know, EBV, HSV and vaccines but we also say that we might be looking for partners, other project financing or pharma partners. And the rare disease, of course, small in terms of dollars. We also said we're going to focus on PA and MMA for now. We'll advance more programs later, but now we need to be financially disciplined. And in oncology, as you know, for intismeran, Merck is paying 50% of the cost, which is why, as Jamey explained, we have discussed this mechanical effect that is based on the strategy we decided to pursue to make sure that we drive back the company to profitability in 2018.

CMV question, and on the CMV question, so we -- so just a little, again, sort of overall framing on this, we remain blinded to the primary results and the secondary results that are in the study. The interim analysis that we announced much earlier in this year was only on that primary endpoint, that's the design of those studies. But as we did not meet the criteria for early success in that interim analysis, we then proceed to the final and the final has much more information in it. Obviously, we leave the primary endpoint unchanged, and we'll test against that. But if that is successful, there is an opportunity to pass down the alpha to powered secondary endpoints as well as there is a final opportunity for us to say, are we getting all the information we want from the blinded analysis prior to that unbinding event? And internally, at Moderna, we identified that there is -- we've actually been very successful in collecting data in the course of the study across a range of different potential endpoints. And we wanted to elevate some of those into that secondary endpoint analysis. In order to do that, while blinded, we have to then update the statistical analysis plan. We did consult with regulators as we are doing that. And we want to make sure that is done in the utmost to a gold standard, high-integrity way prior to conducting the analysis that we can get the full benefit of that additional information that is in the study. So again, we remain blinded. This is just a diligence matter of making sure we get this updated in the right way, and then we'll look forward to proceeding forward with that analysis. And we have done that in consultation, obviously with regulators, but we initiated that ourselves.

Our next question comes from Courtney Breen with Bernstein.

A couple of pieces that I wanted to just touch on. First, with the INT, it looks like you've added the first-line melanoma in there, How do you think about kind of patients being treated over the course of their disease, you're already kind of hitting them in the early stages of the adjuvant space and now popping up with a new first-line trial for the metastatic space. Could you imagine a world where patients might get kind of an INT twice in the course of their disease state if they were to progress. Or will this be a more narrow patient population in the first line, those that perhaps haven't had it in an earlier stage. The second question that I did want to ask was just in terms of the kind of employee headcount cost cutting that you have just announced. Can you just add some more context and apologies if I've missed this on kind of where you are focused with kind of removing some of that headcount, are there any places that you're adding to kind of enhance efficiencies? And so just talking about kind of what the ins and outs might look like to get to that new employee headcount.

Thank you. I'll take the INT question first. So we -- as you mentioned, we are looking at first-line metastatic melanoma. We look forward to a day when melanoma patients broadly are getting INTs early in the adjuvant setting. But right now, the reality is as we're not yet approved and being used in that space, there's still a substantial need in frontline metastatic. Your question was sort of could we expect a world maybe in that distant future where we are being used in both places. And I think the answer is yes. I'll remind you, it's an individualized treatment. An individualized treatment we make on a biopsy of your tumor at the time of when it happens. So it's conceivable that you could get a durable benefit in the adjuvant setting and maybe very much more distantly have a metastatic event. And the neoantigens in your tumor might have changed. So the actual INT you would get in that frontline setting would actually be updated for the evolution of your own personal cancer. And that would be a world where you can obviously see the potential for treating early and treating late. That's speculative in the sense that it's far out there, and we'll have to prove those things. But certainly, we could see a world where people are receiving different versions of their individualized neoantigens therapy throughout the treatment of their cancer. Stéphane Bancel: And I'll take the second question on employees, Courtney. If you look at it, basically, there's a few buckets, clearly the manufacturing driven by productivity, whether it's technology productivity or processes or other things we are doing. In R&D, as we talked about a lot and again, this is part of our strategy. We are not investing in new Phase III study in respiratory. So as those phase out, of course, there are some capacity that we need to kind of resize as you can imagine, and we're not starting new ones. We're not starting later on Phase III. And then G&A is a lot of productivity across the board. So we'll, of course, continue to hire, I think if you check, check, I think a week ago, there's still like 150 position on Moderna's website right now. We are hiring as we need to grow the business, to prepare the launches. So of course, this is very important.

Our next question comes from Cory Kasimov with Evercore ISI.

I wanted to ask a little more on the decision to start the first-line metastatic melanoma trial for intismeran, what does this suggest about what you're learning about the product, where it might be best suited to work and your evolving confidence in the program?

Thank you for the question. So we continue to follow the randomized Phase IIb results from our adjuvant melanoma study. And I think as we have seen in the repeated updates, and we hope to provide a future updates on that, as I mentioned previously, we continue to have enthusiasm from that study, and that really lays the foundation for why we are optimistic about the overall program. Our -- if you look across where we have made with our partner, Merck, the most sizable investments, we have obviously been looking most substantially in the adjuvant settings. And that makes sense to us where the burden of the tumor is the lowest and where your immune system has the greatest chance of achieving a really significant response. And so I don't want to lose sight of the fact that we still believe adjuvant settings are important. I'll also note that we've gone for some monotherapy smaller studies that we're starting to look at, which have us looking even earlier than adjuvant in some ways. And so we're quite enthusiastic about the program potential from adjuvant and earlier. That said, we also want to assess diligently whether or not there's an opportunity for us to do late stage, particularly in the metastatic indication. And that's where metastatic melanoma made the most sense. It was also enabled by some progress we've really made on the manufacturing side. Now I will just make a last comment on the metastatic indication is that those are patients that if they're unfortunately at that stage, they tend to progress quite quickly. And we need to be sure that we can deliver highly efficiently, highly reliably a product for them inside of 6 weeks or hopefully even better from a quick turnaround perspective so that they can start being treated by the drug post enrollment in the study. And so it's quite pragmatic to say, let's build up the capability in the adjuvant and early space, but then now go in a targeted way and look in later stage. And what we've really seen in the intismeran clinical portfolio, over now, many studies and over 1,000 patients treated is this opportunity for us to look in the late stage with a rapid turnaround and highly efficient manufacturing system. But I don't want to lose sight of the fact that we still really believe in the adjuvant space, that is the major place that we're betting, but we do believe that earlier than adjuvant and perhaps in the front line are worth looking at as well, and we'll be doing that in the studies that we just announced.

Got it. And then just a follow-up. Can you discuss any regulatory interactions you have had on the path ahead for Check Point AIM-T. I see on Slide 12, that is now expected to be filed for approval by 2028?

Thank Thank you for that question. So 4359, we have been engaging with regulators. Those are early stage. I won't get into the specifics of them, I'll remind you, we're just now moving into Phase II. And so these are really Phase I stage conversations, which would make it premature to go too much into specifics. That said, we are investing behind the program. And as we announced at the last quarter, we're investing as though this could become one of our submissions over the next 3 years, as you identified sort of by 2028, that really is a statement about our prioritization of the program and our conviction given the very early stage data and not necessarily a statement about anything we've done either out of Phase II and subsequent discussions with regulators about approval time line. So it's our prioritization of the program that brings that forward. But we believe it is possible.

Our next question comes from Luca Issi with RBC.

Well, great. Maybe one, Stéphane, bigger picture, can you maybe just talk about business development here. We've obviously seen a lot of assets being in-license from China, including obviously, one of your competitors that actually licensed the assets and even flipped it to pharma for some means of profits. Given your long-term ambition to become a key player in oncology, are you actively spending time in China and if so, are you just looking at strengthening your mRNA capabilities? Or are you open to other modalities? Stéphane Bancel: So on the first question, as we've said before, we have such a productive platform in mRNA that we have an abundance of assets. Actually, what we are doing, as you heard on the cost structure, we are deciding not to take forward to Phase III asset that we believe deeply into, take EBV, for example, because we ought to be financially disciplined. But we've said we believe this vaccine is really important for patients. As you know, we have 2 program in EBV. There is a prophylactic program to prevent mononucleosis and potentially long-term sequelae of MS and there's a potential therapeutic program for people that are already sick. And we believe those programs have to move forward, which is why, as we've said on previous calls, we are actively talking to potential pharmaceutical partner and potential product financing partners for several of those assets that we cannot prosecute forward alone because they are great assets, but we need to be financially disciplined at the same time. We've always thought that partnering is a great way to access assets that are non-mRNA technology. I mean, a good example, of course, is our important strategic partnership with Merck with KEYTRUDA. We could have decided to develop our own PD-1, everybody don't think this was the right thing to do. But partnering with Merck in term of having an approved product and the right capabilities was. So we're always going to look at the biology. That's what has always driven us to try to find the best way to help patients and to create the best asset. And if we need a partnership, we will do so.

Our next question comes from Gena Wang with Barclays.

I have 2 quick questions. One is when we look at the COVID revenue this quarter, U.S. was only $29 million and seems only a fraction of the Pfizer U.S. revenue. So any concerns on the future market share change? And the second question is regarding the flu vaccine interim data in summer '25. Could you please share your total events that you plan to achieve?

So Gena, I'll take the first question. I'm not sure if we heard the second question, so we might ask you to repeat that. Yes, I mean, we looked at the Q1 revenue for ourselves and our competitors. And all we can point everybody to is the actual script data. And the script data through the first part of this year is really pretty similar to last year at 38% market share. And even if you go back to last year and you normalize our revenue in the U.S., we've talked about in the past, $1.7 billion, take out the gross to net changes, it's really $1.5 billion. That across that marketplace is a 40% market share. And that's exactly what we see, I guess, 38% scripts data. That's what we see through the first half. I would also say that our customers are trying to manage their working capital better. So their inventory levels are down. So I can't comment on other companies' revenue, but I can comment on what we see in the actual marketplace from a script perspective. And Gena, we didn't quite hear the second question. Could you just repeat it, please?

Sure. Of course. So the second question is regarding the flu vaccine, the interim data in summer '25. Could you please share your total events that you plan to achieve?

I don't think we have provided any guidance on it. It is obviously a very large number of cases because there was quite a large disease this year. But at this point, I don't think we're going to provide any guidance. We're ultimately just going to conduct that analysis. literally the season is over, and we'll try and share those results and obviously explain them once we've released that.

Our next question comes from Geoffrey Meacham with Citigroup.

This is Charlie on for Jeff. Just broadly thinking about the recent ACIP meeting, I just wondering if you could comment broadly on some of the comments they have made, namely on CMV and its need for durability data and its implementation challenges and for COVID, perhaps the possibility to move from universal recommendation to when it's risk-based. And then separately for the new checkpoint program. Given the cost cuts that you guys are now implementing, could you please share any potential to either out-license or even partner that program in the future?

Sure. Thank you for all of them. I'll try and get at them quickly. So first on CMV, look, I think we're -- we do recognize for that vaccine, we'll want to see good durability, 5, 10 years would be ideal, if not longer. Because at the end of the day, what you're trying to do with CMV is seroconvert people so that they can control and prevent really a substantial infection with the virus. The durability data we've got to date actually looks really strong. So if you look at the antibody titers through 3 years now and similar cell-mediated immunity, but focusing on the neutralizing titers, they're essentially flat through 3 years. And if you model that forward, it does look like it's going to meet our objectives for really durable immune responses. That's incredibly encouraging. We've seen in a related program in EBV, real durability in viral suppression. We previously reported on that. And so we're feeling pretty optimistic about the performance of the latent vaccine platform and specifically CMV and our ability to achieve durability. As far as the ACIP conversation on that, we were actually quite encouraged by how constructive people are about the need for a CMV vaccine that any efficacy there will be seen as valuable because at the end of the day, this virus is a scurge. And so while durability was raised, we actually think we've addressed that question and the question of efficacy, we feel pretty aligned with that conversation and optimistic that our current results will be positive. The question on COVID and changes in recommendation. Look, at the end of the day, it is for public health officials to decide how to use our products. Our responsibility is to bring forward the data that allows them to make that decision. Risk-based decisions have been applied in other countries. Certainly, if you look at the types of populations that have been identified, those that are older adults, 65 plus, those who have any risk factor, in fact, 74% of Americans have a risk factor for severe COVID-19, including under the age of 64, there was real support for that. And then there was general support for let's let people decide. I think that was seen in the polling of the ACIP working group. So for those even without risk factors that might want to protect themselves against COVID, they should have a right to do it. I will note that if you look at death and hospitalization data, it tends to be in the older adults. It tends to be in the -- in those with risk factors. And so it makes sense that we will want to encourage strongly vaccination in those populations. Again, 1,000 Americans a week dying through this past winter is more than died in traffic accidents per week. It's really something we must address. As far as the checkpoint program is concerned, we have -- we are really encouraged by that data. We're moving forward. At this point, one of the reprioritizations you saw in our pipeline is that we decided not to invest in a pivotal study for younger adult combination vaccines. That's the 18- to 49-year-old flu-COVID combo vaccine. And really, what you should interpret with that is that we are reprioritizing that investment into our oncology pipeline based on the emerging data. It's not any disservice to the -- or any problem with the 1083 program. We're actually really encouraged by it, but we're going to focus there on older adults and those that are higher risk, and we're going to take the opportunity to reinvest that money in checkpoint, which we are encouraged to move forward with ourselves for now.

Our next question comes from Luca Issi with RBC.

This is Shelby on for Luca. Maybe following up on the political landscape. RSK is on record arguing there is no evidence that a single antigen vaccine ever worked for respiratory diseases. He also claims he is working on multi-antigen vaccines. Do you know what he means by that? And also maybe bigger picture, how confident are you that your upcoming PDUFAs will be reviewed based on the risk-benefit profiles of the molecules and not political agendas? Any thoughts much appreciated.

Thanks for the question. As far as the Secretary's statements, I think you'd have to refer those questions to him. I can't comment because ultimately it will depend upon his perspectives. I will note that we have products that have been approved that have demonstrated efficacy. And so we'll continue to provide data, hopefully, in support of that because we do ourselves believe that the clinical trials we run really do support the benefits of our products, including those that are single antigen, and we have some multi-antigen products. I'll remind you that CMV is a 7 mRNA massive multi-antigen product as is EBV as are many of our other vaccines. And so we are -- we do believe that sometimes single antigen makes sense and sometimes multiple antigen makes sense, and we do both. As far as the question on our PDUFA dates, we -- as I said a moment ago, we continue to have constructive exchanges of data and information with the FDA in the review of all of our files. We've also been participating in the review of the information with the ACIP, CDC working groups that ultimately also recommend these products. Our responsibility is to make sure they have the information they need to do a risk-benefit analysis to follow the science where it leads. We are confident in the data we have. In the case of our next-generation COVID vaccine, I'll point to the fact that, that is an 11,000-person large multiyear randomized efficacy study. And we think it is a really strong demonstration of the potential for that product to help patients against COVID-19. And so we're quite enthusiastic about it. Most of our other files include similarly large or larger Phase III randomized studies. It's quite a lot of information to get through. And our job is to make sure that we present it objectively to the agency so they can conduct those reviews. We remain confident that those reviews will be consistent with prior practice. And again, it has been business as usual through the first half of this year for us.

Thank you. Ladies and gentlemen, this does conclude the Q&A portion of today's conference. I'd like to turn the call back over to Stéphane Bancel for any closing remarks. Stéphane Bancel: Well, thank you, everybody, for joining us today. As you can see, we are really focused on executing on our strategy. Thank you for participating in the call. We look forward to speaking to you in the coming days or weeks. Thank you. Have a good day.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.