CureVac - Q4 2023

Transcript

Operator (participant)

Greetings, and welcome to the CureVac fourth quarter and full year 2023 financial results and business updates conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to your host, Sarah Fakih, and you may begin.

Sarah Fakih (VP of Corporate Communications and Investor Relations)

Thank you. Good morning, good afternoon, and welcome to our conference call. My name is Sarah Fakih, and I'm the Vice President of Corporate Communications and Investor Relations at CureVac. Please let me introduce today's speakers. On the call with me from CureVac are Alexander Zehnder, Chief Executive Officer of CureVac; Myriam Mendila, our Chief Development Officer; and Pierre Kemula, Chief Financial Officer of CureVac. Our Head of Intellectual Property, Marcus Dalton, will be present for the Q&A session. Please note that this call is being webcast live and will be archived on the Events and Presentations section under Investor Relations on our website. Before we begin, a few forward-looking statements. The discussions and responses to your questions on this call reflect management's view as of today, Wednesday, April 24, 2024.

We will be making statements and providing responses to your questions that state our intentions, beliefs, expectations, or predictions of the future. These constitute forward-looking statements for the purpose of the Safe Harbor provisions. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected. CureVac disclaims any intention or obligation to revise any forward-looking statements. For more information, please refer to our filings with the U.S. Securities and Exchange Commission. I will now turn the call over to Alexander.

Alexander Zehnder (CEO)

Thank you, Sarah. Ladies and gentlemen, good morning, good afternoon to everyone on the webcast. After recently celebrating my first year as CEO of CureVac, I'm thrilled to be speaking to you today as a leader of a company that is dramatically transforming itself. As societies are moving beyond the COVID-19 pandemic, we are embracing a new normal where agility and innovation are more vital than ever. At CureVac, this means we are taking decisive steps in 2024 to trim unnecessary residual pandemic infrastructure and have started redesign initiatives to increase efficiency, reduce operating costs, and extend our cash runway. These initiatives began in March this year with a voluntary leaver program that aims to reduce 150 positions and is intended to align our workforce to our business scope and priorities.

At the same time, based on the rapidly changing epidemiological environment following the end of the COVID-19 pandemic, together with our partner GSK, we have made the decision to wind down the pandemic preparedness agreement with the German government signed in April 2022. Based on our solid cash position of EUR 402.5 million at the end of 2023, and despite a negative cash impact in 2025 related to the wind down of the pandemic preparedness agreement, our efficiency initiatives are expected to result in a net extension of our cash runway into the fourth quarter of 2025. While we continue to streamline the company and optimize costs, it is essential for us to preserve existing and create new value by maintaining a strong focus on advancing our research and development activities.

Accordingly, we have made substantial progress in our clinical trials and have grown our pipeline of development programs in infectious disease and oncology. In infectious diseases, together with GSK, we have initiated a new phase 1/2 study in avian flu, which is considered a potential future pandemic threat. It is the latest program progressing to clinical trials under a broad infectious disease collaboration with GSK. Our ongoing programs in seasonal flu and COVID-19 have provided promising phase II interim data confirming that our technology platform generates strong antibody titers at well-tolerated dose levels. In oncology, the dose escalation Part A of our phase I study in patients with resected glioblastoma has completed enrollment. Part A successfully progressed to a safety review confirming no dose-limiting toxicity and providing a recommended dose of 100 mcg for the Part B of the study.

This important growth driver, I'm particularly thrilled about our collaboration with MD Anderson, one of the world's leading cancer centers with whom we are joining forces for the development of normal mRNA cancer vaccines. Further expanding such strategic collaborations will be a key focus for Thaminda Ramanayake, a veteran in the biopharma industry who we are delighted to welcome as our new Chief Business Officer as of June 1st this year. Also supporting our oncology strategy is the mRNA printer, CureVac's end-to-end solution for automated manufacturing of GMP-grade RNA vaccines and therapeutics. The printer achieved the next important regulatory milestones by obtaining a framework license, providing even greater freedom and flexibility to manufacture different mRNA cancer vaccine candidates. Taking a step back and looking at 2023 on slide five, I'm profoundly inspired by the progress that has been achieved by the entire CureVac team.

Last year, we made critical advancements in our clinical trials, most notably the positive phase I data in COVID-19 and flu that allowed us to transition into the current phase II programs with potentially differentiated vaccine candidates in collaboration with GSK. We started the phase I program in glioblastoma, kicking off our strategy for the development of next-generation cancer vaccines based on our proprietary second-generation mRNA backbone. Our successful capital raise in February 2023 was a vote of confidence of investors, providing us with the resources to advance multiple programs and research activities. Last but not least, we strengthened our intellectual property position by adding new IP rights to ongoing patent litigation with Pfizer-BioNTech, demonstrating that we continue to be at the forefront of mRNA innovation.

Building on our achievements in 2023, we are poised to continue in 2024 with a clear focus to make CureVac fit for the future. To this end, we have put a strategic emphasis on an organizational redesign, which I will describe in more detail on the next slide. In our clinical trial programs, we continue to move forward with GSK following the promising phase II interim data in COVID and flu this year, as well as the newly started phase 1/2 study in avian flu. In oncology, following the clearance of the phase I Part A glioblastoma safety data, we anticipate advancing to the dose confirmation Part B mid-2024. We expect to report a first data readout in the second half of 2024, most likely at scientific conferences such as ESMO or SITC.

Our efforts to build up our manufacturing facility, GMP4, are progressing, and we expect certification of the facility in the second half of 2024, contingent on regulatory approvals. With this catalyst driving our efforts, we are confident in our ability to make meaningful strides in maturing the company and advancing our clinical trial programs in 2024. On slide six, let me provide you with a more detailed overview of our corporate streamline and redesign initiatives in 2024. As already mentioned, the redesign aims to significantly increase efficiencies and performance while maintaining a strong focus on innovation and R&D activities. This encompasses a range of targeted actions to trim unneeded pandemic area infrastructure, reduce operating costs, and become a leaner, more agile, and focused organization. The cornerstones of our efforts include our strategic reorganization, streamlining reporting lines, and digitizing the company.

The focus is on an improved interface between our discovery, research, and clinical development areas by bringing them together under the leadership of Myriam as Chief Scientific Officer. A unified leadership will allow for an optimal alignment on strategic goals, improved prioritization, resource allocation, and seamless transition from innovation from discovery to the clinic. Furthermore, we will double down on our company-wide digital and data strategy to enhance the use of data and AI throughout the company and enable accelerated business processes and pipeline innovation. In the areas where we are trimming pandemic structures, as mentioned earlier, the targeted resizing via a voluntary leaver program to reduce 150 positions is ongoing. The reduction of workforce will be accompanied by an overall stronger financial discipline.

This includes a much leaner budget in 2024 compared to 2023, which is driven by lower operating costs and lower expenses on raw materials as our commitments for first-generation COVID vaccines are mostly closed. Also, our CapEx spend will be significantly lower with the completion of our GMP4 manufacturing plant. While these actions have already been initiated, we will continue to look for more opportunities to improve efficiencies throughout 2024. Pierre will go into more details in the financial update later in this call, and we will continue to inform you on the progress of these initiatives throughout the year. In parallel with our organizational redesign, we have made significant progress in achieving our goals through strategic collaboration, such as the co-development and licensing agreement we recently entered with one of the world's most renowned cancer institutions, The University of Texas MD Anderson Cancer Center.

The collaboration focuses on the joint development of differentiated off-the-shelf mRNA-based cancer vaccines in selected hematological and solid tumor indications with higher medical needs. It combines CureVac's unique end-to-end mRNA capabilities for cancer antigen discovery, mRNA design, and manufacturing with MD Anderson's world-class expertise in cancer antigen discovery and validation, translational drug development, and clinical research. This collaboration is more than just a synergy of skills. It's a shared commitment of CureVac as the pioneer of mRNA and MD Anderson as one of the most trusted leaders in cancer care to go further and faster in making a profound impact on the lives of cancer patients. Accordingly, both sides will contribute to the identification of novel cancer antigens based on whole genome sequencing, RNA sequencing, and cutting-edge bioinformatics.

Short preclinical validation of the highest quality cancer antigens is expected to be followed by phase 1/2 studies with potential lead candidates conducted by MD Anderson. We are convinced that this collaboration will be instrumental in boosting our oncology strategy. It will be an engine for the development of new cancer vaccines, helping us to deliver novel treatment options faster and more efficiently. In this context, it's with great pleasure that I introduce Thaminda Ramanayake as our new Chief Business Officer. Thaminda will join our management team on June 1 at this pivotal moment in our corporate evolution. Thaminda joins from Affini-T Therapeutics. He brings 15+ years of international experience in business development and corporate strategy. He has a strong track record of successful clinical collaborations, M&A, and licensing, and strategic financing across multiple therapeutic areas. He has previously had positions at Sanofi, BioMarin Pharmaceuticals, and Amgen.

His wealth of knowledge is complemented by a strong foundation in science with focus on immunology and oncology. This broad expertise uniquely positions Thaminda to build upon our current achievements and drive CureVac's corporate strategy forward. With this, let me hand over the call to Myriam for an update on our clinical development programs.

Myriam Mendila (Chief Development Officer)

Thank you, Alex. Moving on to slide nine, I would like to take a moment to outline our most recent development pipeline, which forms the core of our business strategy. Based on the versatility of our unique mRNA platform, we address indications in the three therapeutic areas of prophylactic vaccines, oncology, and molecular therapy. In this updated layout, you can see that across these areas, we have focused our program resources and have discontinued legacy programs that no longer align with our development goals and expectations for adding value. In our most advanced area, prophylactic vaccines, the phase II COVID-19 and seasonal flu programs are ongoing, being developed jointly with GSK. Both phase II studies are fully enrolled, and recent interim analysis data confirms that our platform elicits strong antibody titers at well-tolerated dose levels.

The newly initiated combined phase 1/2 study in avian flu is being conducted in the U.S. and assesses a modified monovalent vaccine candidate encoding an influenza A H5 antigen in younger and older adults against a placebo control. We continue to translate the progress in our prophylactic vaccines area into oncology. Our phase 1 study in patients with resected glioblastoma is currently preparing to start Part B after having successfully completed the dose escalation Part A, as previously mentioned. In the third therapeutic area, molecular therapy, we are developing optimized mRNA therapeutics together with several collaboration partners, which are intended to enable the expression of therapeutic proteins to treat diseases in different areas with unmet medical need. We remain committed to broadening and diversifying our pipeline, being guided by our mission of advanced innovation and health solutions for people and patients.

I'm now on slide 10, which offers more detail on our development programs in COVID-19 and seasonal flu. The phase II part of the combined phase I study for flu assesses a potentially differentiated multivalent candidate encoding antigens matched to all four WHO-recommended flu strains. The candidate was selected from the phase I part of the study, which tested a comprehensive series of multivalent modified seasonal flu candidates with up to 8 constructs per candidate. The phase II part of the study is fully enrolled with 480 younger adults aged 18-64 and 480 older adults aged 65-80. Both age groups were tested against age-matched licensed comparative vaccines. The vaccine candidate showed an acceptable safety and tolerability profile, with the majority of solicited adverse events reported at either mild or moderate.

For influenza A strains, geometric mean titers generated by the vaccine candidate numerically exceeded the geometric mean titers of the licensed comparative vaccines consistently across all tested dose levels and age groups. For influenza B strains, geometric mean titers were generally lower than those elicited by the licensed comparative vaccines. Based on the challenges in addressing B strains across vaccine technologies, this is in line with our expectations and the results from early studies of other mRNA-based flu development programs. Together with GSK, we plan to assess targeted optimizations to further improve immune responses against B strains in an additional phase II study. We are confident that planned optimizations will improve performance against these historically challenging influenza strains.

In the phase II COVID-19 study, we assessed different booster vaccinations of two vaccine candidates: CV0601, a modified monovalent construct encoding the Omicron BA.4/5 variant, and CV0701, a modified bivalent construct encoding the Omicron BA.4/5 variant, as well as the original SARS-CoV-2 strain. The study is fully enrolled with 427 participants aged 18 or older. According to the applicable standard of care at the time, the study employed a licensed bivalent mRNA comparative vaccine. Interim data was reported in early 2024 and confirmed a favorable tolerability profile combined with competitive immune responses at low doses. All tested dose levels were well below those used in any of the mRNA-based COVID-19 vaccines licensed in the U.S. and EU.

As can be seen in the left of the two graphs, both vaccine candidates showed a lower or similar proportion of participants reporting solicited adverse events compared to those who received the comparative vaccine. As illustrated in the right graph, CV0601, shown in orange, was tested at a medium dose level and elicited utilizing antibody titers against the Omicron BA.4/5 variant on day 29, which numerically exceeded the titers generated by the comparative vaccine by a factor of 1.4. For the low, medium, and high dose levels tested for bivalent CV0701, neutralizing antibody titers were 0.7, 1, and 1.3 times the titers of the comparative vaccine. The study is currently ongoing with an additional expansion cohort. Taken together, the promising interim data strongly underscore the strengths of our proprietary technology platform. With this, let me shift our focus back to our oncology area.

On slide 11, let me briefly remind you of the strategy for our oncology area, which we consider a cornerstone of our future growth. We have made significant strides in advancing our cancer vaccine programs based on our two-pronged strategy, which encompasses both off-the-shelf and personalized cancer vaccines. Our off-the-shelf programs target the discovery of shared antigens with high prevalence in specific cancer types and the potential to enable more scalable and rapid cancer care. In this part, we have achieved key milestones over the past several months. We are delivering on our glioblastoma study by targeting known glioblastoma antigens to validate our second-generation backbone in the oncology setting. At the same time, in collaboration with myNEO Therapeutics, we have identified novel shared antigens based on myNEO's advanced AI-powered technology platform, which showed strong immunogenicity in undisclosed preclinical studies.

The combination of antigens evolving from the myNEO collaboration with antigens discovered with our proprietary platform enabled selection of the next clinical candidate in oncology. We plan to advance this candidate to the clinic in 2025. Our collaboration with MD Anderson will also be an engine for the future development of new cancer vaccine candidates, further strengthening our off-the-shelf clinical development programs. In parallel, we are also aiming to push the boundaries of personalized cancer vaccines tailored to the unique genetic makeup of a patient's tumor. We have evolved our antigen discovery platform acquired with Frame Cancer Therapeutics and specifically directed the technology towards the identification of novel classes of personalized cancer antigens. Fast and flexible access to cancer candidates based on novel personalized antigens will be critically enabled by the RNA Printer, which was just granted a framework license in the ongoing regulatory review.

As we continue to navigate the challenges and opportunities of the oncology landscape, our achievements in both off-the-shelf and personalized cancer vaccines position us strongly for future growth and success in this important area. Turning our attention now to the clinical front in oncology on slide 12, let me give you a little bit more detail on our phase I study in patients with surgically resected MGMT unmethylated glioblastoma. On the slide, you can see the setup of the open-label phase I study with a multi-epitope cancer vaccine candidate, CVGBM. CVGBM features a single unmodified mRNA encoding eight epitopes derived from tumor-associated antigens with demonstrated immunogenicity in glioblastoma. The exact nature of the epitopes is not disclosed. The dose escalation Part A has successfully completed recruitment with 16 patients across four dose levels between 12-100 mcg.

A review of the safety data for these dose levels by the Data Safety Monitoring Board, or DSMB, confirmed no dose-limiting toxicities. Accordingly, the DSMB gave a recommendation for a preferred dose of 100 mcg for the subsequent Part B of the study. Part B, expected to start mid-2024, will enroll up to 20 patients. We are looking forward to sharing first immunogenicity data from the study in the second half of 2024 at the scientific conference. To finalize the encouraging news flow in the context of our oncology strategy, the RNA Printer, our highly automated solution for GMP-grade manufacturing of cancer vaccines, has achieved the next important regulatory milestone. You might remember that we reported the first manufacturing license for the printer to support our oncology strategy in the third quarter of 2023.

In an ongoing regulatory review, this license was expanded by a so-called framework license, which allows the flexible manufacturing of different mRNA constructs based on the established processes on the printer. In 2024, our goal is to further expand this approach to also include the formulation module of the printer to complete the end-to-end capabilities of the system. With this, let me hand back to Alexander.

Alexander Zehnder (CEO)

Thank you, Myriam. Before we move on to the financial part of this call, on slide 14, I would like to briefly provide an update on our patent litigation against Pfizer-BioNTech in Germany and the U.S. Starting with the recent development in the U.S., shown on the left-hand side of the slide, please recall that a total of 10 patents are currently at issue in this geography.

In November 2023, our partner Acuitas Therapeutics moved to intervene, sever, or stay our U.S. litigation against Pfizer-BioNTech. The motion is based on a co-ownership and co-inventorship claim related to one patent family covering four patents out of the 10 litigated in the U.S. These four patents cover the specific design of COVID-19 vaccine using a lipid nanoparticle, which was used in Comirnaty but first introduced to the clinic by CureVac in 2018. Recently, a magistrate judge granted intervention and recommendation to stay litigation of all 10 patents before the district court until the Acuitas claim is resolved. So far, no decision has been made, and we are currently preparing objections to this recommendation and anticipate a decision within the next two months.

Germany, shown on the right-hand side of the slide, on December 19, 2023, the German Federal Patent Court granted, in the first instance, the 2022 request by BioNTech to nullify the German part of our technology patent on GC enrichment. Given the broad scope of our robust patent portfolio, this initial decision does not diminish the strength of our value of our intellectual property position, as this is only the first instance decision, and proceedings are continuing in Germany with the remaining IP rights. We are currently waiting to receive the written judgment of the December decision, which will enable us to file an appeal before the German Federal Court of Justice that will firmly establish the merits of our case. Patent litigation is part of the business landscape, especially in industries driven by high-stakes innovation such as ours, and routinely take years to play out.

However, delays and setbacks will not deter us from having our intellectual property rights acknowledged and fairly compensated. With this, I would like to conclude the business update and hand over to Pierre for a review of the financial data.

Pierre Kemula (CFO)

Thank you, Alexander. Good morning and good afternoon to everyone on the call. Before we go into financial statement details, I would like to provide a little more context on our updated runway guidance and the main factors that are impacting our 2024 and 2025 projections. Alexander already mentioned the joint CureVac-GSK decision to wind down the 2022 pandemic preparedness agreement with the German government. Based on the 2024 obligation from this agreement, we expect the wind down to have a positive cash impact supporting a 2024 runway. This relates to significant savings on raw materials stockpiling and reduction in running costs for our GMP4 manufacturing facility.

On the other hand, in 2025, we will no longer receive the standby fee that the German government would have paid for maintaining a warm manufacturing base, resulting in decreased 2025 revenues. We will offset this overall negative cash impact with two things. First, we have closed all remaining raw material commitments related to our first-generation COVID-19 vaccine. And second, our organizational redesign, including voluntary leaver program, will enable reduced operating costs, allowing additional investments into selected development programs. Further reduction in cash out in 2024 compared to 2023 will be driven by lower operating expenses in various SG&A functions. With our GMP4 facility expected to be certified in the second half of this year, subject, of course, to regulatory approval, the CapEx requirements in 2024 will also be significantly reduced compared to 2023.

Taken together, it allows us to extend our cash runway from mid-2025 into the fourth quarter of 2025. We will continue to look for more opportunities to increase efficiency in 2024, and we'll keep you updated. Looking at our cash position on slide 16, as already mentioned, we closed 2023 with EUR 402.5 million. Cash used in operations was mainly allocated to R&D activities, expenditures for our GMP4 production facility, and purchases of R&D materials. I will underline in this presentation the significant one-off effects that took place in 2022 as a consequence of closing our first-generation vaccine efforts in COVID-19. But first, let us look at revenues. Revenues increased by EUR 10.9 million to EUR 22.6 million for the fourth quarter and decreased by EUR 13.6 million to EUR 53.8 million for the 12 months of 2023 compared to the same period in 2022.

The decrease year-on-year was primarily driven by lower revenues from our two GSK collaboration agreements. Revenues from both collaborations decreased year-on-year and amounted to a total of EUR 47.1 million in 2023 compared to EUR 62.3 million in 2022. The decrease was driven by the agreement of both companies to focus on the larger indications. Revenues for the fourth quarter were higher compared to the prior year period, as a significant portion of the milestone related to the initiation of phase II for the seasonal flu clinical trial was recognized. Operating loss was EUR 88 million for the fourth quarter of 2023, presenting a EUR 33.5 million decrease compared to the same quarter of 2022. For the 12 months of 2023, operating loss increased by EUR 24.7 million to EUR 274.2 million compared to the same period in 2022. The operating result was affected by several key drivers.

First, cost of sales decreased year-on-year, mainly as the impact of our first-generation COVID-19 vaccine subsided. This resulted in lower write-off of raw materials in 2023, as well as lower impact on cost-related termination of CMO activities. Second, R&D expenses increased with higher investment in later-stage infectious diseases and oncology development programs, as well as strengthening the workforce. In 2022, R&D expenses were positively impacted by a EUR 38.5 million related to the reversal of an outstanding CRO provision, as well as by one-off net gain for change in contract termination provision, resulting primarily in GSK taking over from the company-committed capacity at a CMO. Third, and still in 2022, other income was positively impacted by a EUR 32.5 million one-off for reimbursement of prepayments and production activity setup at a CMO.

Financial results increased by EUR 8.7 million to a profit of EUR 1.5 million in the fourth quarter of 2023 and increased by EUR 13.9 million to a profit of EUR 14.2 million for the 12 months of 2023 compared to the same periods in 2022. They were mainly driven by interest income on cash investments. Pre-tax losses were EUR 86.5 million for the fourth quarter and EUR 260 million for the full year of 2023. With this overview, I would like to hand back the call to Alexander for the summary of today's key messages.

Alexander Zehnder (CEO)

Thank you, Pierre. So building on our achievements in 2023, we have kicked off 2024 by delivering progress across several key areas and positioned ourselves for continued success throughout the year. Foremost, we have launched a comprehensive organizational redesign initiative that trims residual pandemic-era infrastructure, streamlines our organization, and applies increased financial discipline.

We expect these measures to significantly improve our operational efficiency and agility and contribute to a stronger financial performance in 2024. This expectation is reflected in the extension of our cash runway for mid-2025 into the fourth quarter of 2025. In the clinic, our infectious disease vaccine development pipeline continues to make significant progress, marked most recently by a start of a new study in avian flu together with GSK. This is complemented by key data milestones in the phase II studies for COVID-19 and seasonal flu, confirming the competitiveness of our proprietary mRNA technology platform. In oncology, cornerstone of our strategy, the establishment of our cancer vaccine collaboration with MD Anderson and the advancement of our phase I study in patients with glioblastoma both reinforce our commitment to staying at the forefront of oncology innovation.

The pandemic dramatically illustrated the utility of mRNA technology, and we believe that mRNA's most significant promises still lay ahead of us, and CureVac is resolute in its mission to bring that tremendous potential to life. And with this, I would like to conclude our presentation and would now open the webcast to your questions.

Operator (participant)

Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, as we pull for questions.

And our first question comes from the line of Evan Wang with Guggenheim. Please proceed with your question.

Evan Wang (VP of Equity Research)

All right. Thanks, guys. Thanks for taking the questions. I have two. One related to the infectious disease platform. Just wondering if you could provide any timelines with respect to some of the next steps that we'll see for COVID, seasonal flu, and a potential combo. I guess with the flu, one question I did have was, should we be thinking about a trivalent going forward or trivalent with the WHO antigens? And then with GBM, glad to see the progress and selection of the go-forward dose. Anything you can share with respect to part A on immunogenicity? Was that evaluated? And how does the response there compare to some of the responses we've seen from some competitors recently? Thanks.

Alexander Zehnder (CEO)

Okay. Thank you very much.

Maybe I can start, and then I will let Myriam comment as well. Maybe first on the ID platform. As we mentioned, we just started a new trial, phase 1/2 trial on avian flu. So that's an additional program as part of the GSK collaboration that is moving forward and I think might address an important future need. And then for COVID and flu, as we mentioned during the call, both phase II studies are still ongoing. For flu, we are about to start the additional study to improve B strain response. And for COVID, the additional part of the phase II study is still ongoing to optimize for different presentations of the vaccines. And once we have all this data together from the relevant study, we will complete our discussions with the regulatory authorities for the setup of the pivotal phase III studies.

Together with the GSK, we are working on what is the most value-driving strategy for both our collaborations and that reflect the current needs for both indications. Your question to GBM and whether data is already available. Maybe let Myriam comment on this.

Myriam Mendila (Chief Development Officer)

Yeah. Maybe before that, Evan had another question on flu and whether we go with a trivalent vaccine. Yes, that's the WHO recommendation, and that will be the plan for phase III, that we will basically encode just for one B strain in the future. We will always follow the WHO recommendation, but that's sort of the plan for phase III. For GBM, we are analyzing immunogenicity data but haven't disclosed those.

As we said in the presentation, right, while we are analyzing and more data coming in, we plan to present those data at upcoming oncology conferences in the second half of 2024. So at the moment, our target is ESMO and potentially the SITC conference later this year in the U.S.

Operator (participant)

And thank you. Our next question comes from the line of Roy Buchanan with Citizens JMP. Please proceed with your question.

Roy Buchanan (Equity Analyst)

Hey, thanks for taking the question. I guess I'm not sure you can answer this one, but the seasonal flu phase III, do you think you might be in a position to start that trial as early as later this year, or is that most likely early next year?

And then the Frame, you probably can't say or you would have said, was wondering when you might be in the clinic with the personalized approach and just what's going on getting that into the clinic at this point. Thanks.

Alexander Zehnder (CEO)

And Myriam, so question on timing of flu phase III and timing of personalized cancer vaccines to the clinic.

Myriam Mendila (Chief Development Officer)

Yeah. So for flu phase III, right, we need to discuss with the health authorities. And our goal is, of course, to bring it to the clinic as soon as possible. But right now, it's difficult, and we are reluctant to commit to basically a start. So maybe once we have discussed with authorities and have a clear plan, we will for sure, in alignment with GSK, give an update on this one. For PCV, we're working on it and communicated that earlier.

This is complex, and right now, we are planning to go into the clinic 2026+.

Roy Buchanan (Equity Analyst)

Okay. Great. And then maybe, sorry, just one more on the I think this is what you said, but the H5N1 program, that's another target selection by GSK, so it reduces their available targets by one. Thanks.

Alexander Zehnder (CEO)

That's correct.

Myriam Mendila (Chief Development Officer)

Sorry.

Roy Buchanan (Equity Analyst)

Okay. Thank you.

Operator (participant)

Thank you. Our next question comes from the line of Mani Foroohar with Leerink Partners. Please proceed with your question.

Mani Foroohar (Senior Managing Director)

Hey, guys. Thank you for taking this call or the question. I wanted to pivot over to a financial one. I'm looking at the guidance slide here, slide 15, which helpfully breaks off the bridge out to late 2025.

Can you give us a little bit of granularity on the assumptions around the voluntary lever program that are baked into that and some of the economics of where we might see some of that severance expense versus some OpEx coming off as headcount trims, just how that will flow through the financial statements, and what your operational assumptions are for degree and tempo of uptake?

Pierre Kemula (CFO)

Hi, Mani. This is Pierre speaking. Thanks for your question. I'm not sure I answered the last part, but basically, you have on the slide, I think, the key elements or the key driving elements, right, that have an impact on the runway. We haven't disclosed, for instance, the PPA, the revenues. It's a consortium approach with GSK and the government, so it's difficult to comment on that.

What you understand from my call is we have an extension because we don't have to expense raw materials and stockpiles this year, but we have less revenues from the PPA. So it's a small net negative over the period, right? And this will be counterbalanced by, of course, a more focused spend, I guess, on R&D and savings that we have on the infrastructure, but also, I would say, on the G&A going forward. Importantly, as I tried to underline as well, we had a lot of swings related to the end of the COVID-19 first gen, right? And so these are, I mean, mostly behind us now, right? So I think this will help us. And we talked about GMP4 where you'll see in our documents, which we uploaded tonight, we have kind of finished investing into the building and the machines, right?

So this will not reproduce going forward. So this is the color I can provide. And all these pluses and minuses, and specifically with the effort that we've done in terms of lighter budgets, a leaner budget, more efficiency that Alexander was talking about, we were able to extend the runway despite having a bit of headwind over the two years in PPA.

Mani Foroohar (Senior Managing Director)

Okay. And pivoting over and a quick follow-up to strategic and sort of clinical development questions. When you think about the use of your technology in oncology, whether one wants to call it a personalized cancer vaccine, neoantigen therapy, whatever various competitors are calling their products now, how do you think about indication selection and to what extent is that informed by positioning and indications and data from your competitors, Moderna, BioNTech, etc.?

Myriam Mendila (Chief Development Officer)

And maybe I can take that. Sorry, Alex.

Alexander Zehnder (CEO)

Go ahead, Myriam.

Myriam Mendila (Chief Development Officer)

If you're okay. Yeah, I can take it. I think it's a great question. And yes, we're doing all of that, right, especially for oncology where you could go into 50+ tumors, and if you subdivide them into molecular subtypes, it's even more. We did a strategic evaluation over the last quarter of last year, really looking at all of the different possibilities where to go and then applying different criteria with different weighting on how to rank those and then came up with basically a list of priorities, considering commercial opportunity, considering competitive landscape, available data, and then end. And that basically was an underlying basis or became the underlying basis for our oncology strategy.

So we are going strategically into specific indications where we see the scientific need or the scientific rationale, the medical need, the commercial opportunity, maybe also an edge versus the competitors, and that sort of is driving how we decide into which indications we're going. Does that address your question?

Mani Foroohar (Senior Managing Director)

Yeah, broadly. I guess a more sort of narrow question would be, where should we be looking for datasets from you guys, perhaps melanoma, perhaps elsewhere, that we could look at to provide a little bit of a comparison on efficacy versus your competitors so that your stock is getting some value for it? We can sort of evaluate your opportunity to differentiate.

Myriam Mendila (Chief Development Officer)

Yeah. As said, right, we haven't published clinical data, right? And if that's your question, so that's why right now, those data are not available from basically our cancer vaccine in the clinic.

Maybe I misunderstand your question, but

Mani Foroohar (Senior Managing Director)

yeah. I'm thinking about what the timing to how we should think about the timing when we could see a dataset that we could sort of get an indication where we can sort of compare it with an existing competitor.

Myriam Mendila (Chief Development Officer)

That's a difficult-to-answer question because our current trial is ongoing in glioblastoma. To my knowledge, there is no other mRNA vaccine ongoing in this space, right? So if you're specifically asking to compare our platform with other platforms, our next phase I trial is in planning, right? So it will take some time until data will become available where you could probably compare across indications. But the one thing we all have to be cautious when we're comparing across trials, right, because we're doing that ourselves as well when we're looking at the other data.

But we realize how difficult it is to compare data in one tumor indication based on different vaccine platforms, based on different assays, patient selection criteria, and so on. While we all want to have and do those comparisons, we also have to be cautious that cross-trial comparisons, cross-platform comparisons will have their limitations. So while I understand the need you would like to do that, there's also a, I want to say, limited value. So I think when we publish the GBM data, we have to take them as they are. Is this a validation of the platform? Will it show great immunogenicity? And we can compare across other vaccine technologies. But those comparisons, again, have all their caveats and pitfalls.

Alexander Zehnder (CEO)

Maybe just to add to that.

Myriam Mendila (Chief Development Officer)

Yeah.

Alexander Zehnder (CEO)

I think. Yeah. Maybe just to add to that, I do believe here the MD Anderson collaboration will be able to help us a lot because at the end, to have a differentiated product, it's all about having the right antigens, good backbone, good delivery, good translational capabilities. And I think this collaboration that we announced a few weeks back with MD Anderson really, really helped us there and created an engine for us to produce, hopefully, differentiated products that make a difference for patients, right?

So I think this is something that is going to increase our capabilities a lot, right? Now, it will still take some time, as Myriam alluded, until we see it in the clinic, but at least we have a great engine with this collaboration that should help us a lot to be faster and be more efficient as well and bring differentiated products to the market.

Operator (participant)

Thank you. Our next question comes from the line of Umer Raffat with Evercore ISI. Please proceed with your question.

Umer Raffat (Senior Managing Director)

Hi, guys. Thanks for taking my question. I have three here, if I may. First, I know you talked about your wind-down of the pandemic agreement with the German government. How does that change your anticipated timelines to market with your COVID vaccine? I would have thought Germany would have allowed you a more rapid path to market. Secondly, for your largest and most advanced trial of everything you're running, which is the COVID vaccine, I noticed the slides keep mentioning 601 and 701 formulations, but not the 801, which is a monovalent strain that you do have also as part of this trial. Could you give us more color on the anticipated timelines and readout of that and the specific strain that the 801 covers?

And then finally, on Acuitas-related delay on your litigation, wasn't Acuitas only hoping to be a co-owner on your formulation patents, meaning your CG and your poly-A patents would have been unaffected anyways? And I'm just trying to think about why all those patents were also looped up as part of the broader stay order. Thank you very much.

Alexander Zehnder (CEO)

Yeah. Thanks a lot, Umer. So three questions. One on the PPA and timelines, COVID vaccine strain, and then, Marcus, I will let you comment on Acuitas and the recent updates here. So Umer, on the PPA, PPA should not impact the timelines at all because following the pandemic, emergency procedures that were in place to accelerate some of the approvals, they are largely gone. So there's no impact at all related to PPA or discontinuing PPA in terms of timelines in Germany.

Myriam, do you want to comment on Umer's questions on strains? Go ahead.

Myriam Mendila (Chief Development Officer)

Yes. Yeah. So 0601 is a monovalent strain for the BA.4/5 variant, and the 0701 is a bivalent, and 0801 was the wild-type SARS-CoV-2 strain. So that's why I'm not sure I understand your question. That's why, basically, there wouldn't be additional data coming. Maybe I misunderstood the question, but our focus is definitely on the updated strain, and our focus is on, again, continuing to develop a monovalent strain or a monovalent vaccine that is matching the most recent COVID or corona strain.

Umer Raffat (Senior Managing Director)

I guess maybe to clarify, shouldn't the 801 or the 901 have been the XBB.1.5 instead of BA.4/5 at this point of development?

Myriam Mendila (Chief Development Officer)

No. At the time when we started this phase I and phase II program, actually, XBB.1.5 was just basically on the rise.

And yes, right, if we were to when we are planning for the next clinical trial, whether it's the phase III or something different, then we would, of course, encode for whatever is the next strain, now XBB.1.5, but it could be until then, until we start the phase III, the strain could have changed. So we will always encode, again, in the next wave, the most recent and updated strain that was recommended by the WHO or the VRBPAC. But again, at the time we designed this study, right, the current strains and circulating strain was the BA.4/5 variant.

Alexander Zehnder (CEO)

Okay. Acuitas? Marcus, do you want to comment on Acuitas?

Marcus Dalton (Head of Intellectual Property)

Yeah. Sure. So your question was right that Acuitas only asked for the severing of the four formulation patents. The court didn't want to, so let me also be clear. There is no decision yet to sever or stay.

There is a decision that Acuitas can intervene into the case, but the sever and stay is a recommendation by the magistrate judge that has to be endorsed by the trial judge. And that will take some time. We have grounds to object, which have to be in, and then there'll be a response from the other side. And so the trial is still ongoing, and the work for the trial is ongoing at the moment. So you're right. Actually, Acuitas didn't ask for the nobody asked for the stay of the whole proceedings. It was a decision of the magistrate judge to recommend that to the trial judge. And as Alexander said in his presentation, we expect that to be resolved in the next two months or so. In the interim, all the work is carrying on.

Umer Raffat (Senior Managing Director)

Thank you very much.

Operator (participant)

Thank you. Our next question comes from the line of Eli Merle with UBS. Please proceed with your question.

Speaker 12

Hi. This is Sarah on for Eli. Thanks so much for taking our questions. I have two. First, on COVID/flu, how are you and GSK thinking about prioritizing the combo vaccine versus individual vaccines? And then are you still planning to initiate clinical development in the second half, and how should we be thinking about sort of economics here? And then on your oncology program, for the data second half, what are you looking for in particular to serve kind of as proof of concept for your platform in oncology?

Alexander Zehnder (CEO)

Okay. So two questions. One on COVID and how we think about combo, I guess, and the second one in terms of Onco and what we are looking for in terms of the data.

Maybe I can start with the first one, and then, Myriam, you can comment on the Onco one, right? So with regards to COVID, even though the pandemic has ended, obviously, but it will most likely stay with us, and we'll require seasonal booster vaccinations, especially for the patients at risk. And due to the continued need for these vaccines, we do believe that the COVID market is still expected to be a multi-billion-dollar market. However, there's definitely added convenience and potential for better immunization, and it's clear for us, and I guess for GSK as well, that there is real value for a combination vaccine that would be attractive in population requiring both vaccines. And mRNA technology, obviously, is perfect to address opportunities to its potency and flexibility.

GSK has repeatedly made the comment that combo vaccine and flu are a focus for them and with the expectation of EUR 3 billion-plus peak sales for these vaccines. So overall, we believe flu definitely still has a lot of potential, but the combination is definitely something that we're looking at very closely. Once we have the individual pieces from the two phase II data, I think we will be able to provide more guidance and detail to this moving forward. Maybe, Myriam, the second question in oncology, I guess, it was what kind of proof of concept data we would look for in GBM.

Myriam Mendila (Chief Development Officer)

Yeah. Thank you. And thanks, Sarah, for the question. So in the Part A of the GBM trial, because it's a phase I dose escalation trial, primary endpoints, of course, are, first of all, to look at safety and tolerability.

We do have secondary endpoints and exploratory endpoints regarding immunogenicity. In that Part A, we are looking at basically T-cell activation by ELISpot ex vivo as well as after in vitro stimulation. In the Part B, we do a more expanded immunogenicity testing program where we, of course, continue to look at ELISpot but also do more quantitative T-cell measurements and a more in-depth analysis of T-cell repertoire in those patients. That's what you can expect. We have defined our internal sort of hurdles we'd like to take, but I hope you can understand that at the moment, I don't feel comfortable to share those. Clearly, we want to be ambitious in what we would like to see to declare that especially immunogenicity data from that trial confirm, basically, that the platform works in oncology.

But we have defined it, if that's your question.

Speaker 12

Okay. Great. Thanks, guys.

Operator (participant)

Thank you. Our next question comes from the line of Chiara Montironi with Van Lanschot Kempen. Please proceed with your question.

Chiara Montironi (Biotech Equity Research Analyst)

Hello. Thank you very much for taking my question. I'm Chiara Montironi on behalf of Van Lanschot Kempen. So I have to say my phone disconnected, so I really hope I didn't miss what I'm about to ask. So I wanted to ask you if you could elaborate a bit more on the recently announced MD Anderson collaboration. So I was wondering, how do you go about choosing programs and indication? Are you going to use the same strategy that Myriam just discussed five minutes ago?

Myriam Mendila (Chief Development Officer)

Yeah. So maybe I can take this one. And so, Alex, did you want to start?

Alexander Zehnder (CEO)

Go ahead. I can add.

Myriam Mendila (Chief Development Officer)

Okay. Super. So with MD Anderson, of course, we discussed the selection of indications and followed the same approach where MD Anderson had their priorities, we had our priorities, and then we sort of looked, "What is in the where is it overlapping?" And so we have agreed already on the indications that we will focus on our collaboration. And I don't recall what the second part of the question.

Chiara Montironi (Biotech Equity Research Analyst)

Oh, that was it.

Myriam Mendila (Chief Development Officer)

Okay. Thank you.

Chiara Montironi (Biotech Equity Research Analyst)

Thank you.

Operator (participant)

Thank you. Our next question comes from Charlie Yang with Bank of America. Please proceed with your question.

Charlie Yang (Senior Equity Research Analyst)

Great. Thanks for taking the questions. I have a few, please. The first one is, can you just talk about the regulatory pathway for glioblastoma trial?

I guess my impression, maybe, perhaps, was that this is going to be more of a proof of concept, but your focus will be on the other indications with the other account platforms. But if this passed for it, then what would that timeline kind of look like? And I guess my second question is, just thinking about all the different kind of early-stage programs that you have in the cancer vaccine and thinking about the cash balance and runway, how are you thinking about account prioritization among those programs as which one is kind of more important versus the others, and why not just focus on one instead of kind of doing a few?

And lastly, just with hiring of kind of the new chief business officer, what kind of strategic deals that the company is thinking of in coming, perhaps, months or quarters, and how should we think about from the therapeutic kind of standpoint? Thank you.

Alexander Zehnder (CEO)

Okay. Thank you, Charlie. What was the regulatory path?

Myriam Mendila (Chief Development Officer)

Yeah. Maybe I could take the first two, Alex, and then you can address the third one. So for GBM, as you rightly stated, right, for us, this is a proof of principle study. We already announced in earlier calls or disclosed in earlier calls that this is, for us, a trial where we are using, basically, our platform in oncology for the very first time, and our intention is to show it's safe and well-tolerated, and it's inducing an immune response against the encoded antigens.

We didn't have and don't have plans to then take this as a POC to proof of concept, and then start a phase II or phase III program. And you never know, right? But if we would see, which is unexpected, some strong, compelling efficacy signal, which would take time in the GBM trial because we are here treating patients that have undergone surgery, so they don't have remaining tumor, and hence, assessing efficacy will always be based on an endpoint-driven parameter such as disease-free survival or progression-free survival. But in case with longer follow-up, we would see something compelling, then we will revisit that decision. Right now, we are not considering to take this all the way through clinical development and into phase III, but again, just want to use the GBM data as a proof of principle the platform works in oncology.

Then regarding the prioritization of the different oncology programs and the sort of cash runway we're having is, of course, something that will happen once we have the data. Right now, we have the GBM program. We are preparing for another phase I program with a clinical candidate, and the collaboration with MD Anderson is just starting, right? And we need to see if we can find shared antigens that will enable us to nominate a candidate. And then again, based on what I described before, different parameters, we will see what we can take to the clinics and otherwise prioritize based on the scientific evidence and the signals we're seeing in terms of what we'll take it to the clinics.

Alexander Zehnder (CEO)

Thank you, Myriam. And I think the last question was regarding with the incoming of the new CBO, Thaminda, and strategic direction for business development or additional partnerships.

I think there are a few focus areas for us, one being oncology for sure. Even though we have announced the collaboration with MD Anderson, this will not preclude us from additional partnerships for these assets if they make it through phase II. So oncology is definitely a big focus for us in looking for additional partnerships. We also still have opportunities on the infectious disease side for programs that are not partnered with GSK. And beyond this, in molecular therapies, we have a few programs ongoing that we haven't fully disclosed but that could be interested for partnering in selected indications. So it's definitely something that we're looking at very broadly, and we are engaged. And with Thaminda coming on board, we can engage even further on this.

Charlie Yang (Senior Equity Research Analyst)

Thank you.

Operator (participant)

Thank you. Thank you. And we have reached the end of the question-and-answer session.

I'll now turn the call back over to Sarah Fakih for closing remarks.

Sarah Fakih (VP of Corporate Communications and Investor Relations)

Thank you. With this, we would like to conclude this conference call. Thank you very much for your participation. Stay safe, and please don't hesitate to contact us should you have any further questions. Thank you, and goodbye.

Operator (participant)

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.