Moderna - Q1 2024
May 2, 2024
Transcript
Operator (participant)
The message device in your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to hand the conference over to speaker today, Lavina Talukdar. Please go ahead.
Lavina Talukdar (Head of Investor Relations)
Thank you, Kevin. Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's first quarter 2024 financial results and business updates. You can access the press release issued this morning, as well as the slides that we'll be reviewing, by going to the Investors section of our website. On today's call are Stéphane Bancel, our Chief Executive Officer, Stephen Hoge, our President, and Jamey Mock, our Chief Financial Officer. Before we begin, please note, 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 in 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. I will now turn the call over to Stéphane.
Stéphane Bancel (CEO)
Thanks, Lavina. Good morning or good afternoon, everyone. Thank you for joining us today. I will start with a review of a business. Jamey will then present our financial results. Stephen will review our latest clinical programs, and I will close by sharing our 2024 commercial priorities and major upcoming milestones. Our COVID vaccine has already impacted hundreds of millions of people. I'm excited by the progress we've made with our pipeline that has the potential to impact many more people. During the first quarter, we presented substantial clinical progress during our Vaccines Day with exciting data on EBV, VZV, and Norovirus. In addition, along with our partner, Merck, we expanded studies for individualized neoantigen therapy, INT, into three new indications.
In addition to our ongoing phase III studies in adjuvant melanoma and adjuvant non-small cell lung cancer, a phase II/III study has started in neoadjuvant/adjuvant cutaneous squamous cell carcinoma, another form of skin cancer. Phase II clinical trials have started in adjuvant bladder and adjuvant kidney cancer. Together, our vaccines and therapeutic portfolio have a potential to impact hundreds of millions of people each year. I am pleased with our Q1 performance. Since the beginning of the year, we announced four important business agreements and collaboration. We entered into a non-exclusive IP out-licensing agreement with a leading pharmaceutical company in Japan. The agreement includes an upfront payment and low double-digit royalties to Moderna on net sales of COVID-19 products marketed in Japan by this company. It is nice to see a company recognizing our IP and asking us for a license.
Second, we recently announced a contract to provide 12.5 million doses of our COVID-19 vaccine to a Ministry of Health in Brazil. I am very pleased with this partnership, as it is the very first time that Moderna works with the Brazilian government, and we look forward to providing these doses to protect people in Brazil as they go into their winter season. We announced a project financing program for up to $750 million in partnership with Blackstone to further develop our flu program. We also made public our collaboration with OpenAI to use AI as a transformative tool to increase speed and efficiency, and ultimately to improve patient outcome across our business. Finally, we agreed with Metagenomi to terminate our gene editing collaboration. All rights granted under the collaboration will be returned to Metagenomi.
This is a good proof point of Moderna continuing to prioritize our investment for best opportunities to drive results. Turning to Q1 financial results. In revenues, we were ahead of our plans at $167 million, reflecting the highly seasonal nature of our respiratory vaccine business. The net growth was $1.2 billion. We ended the quarter with $12.2 billion of cash and investments. We communicated during the November call our focus on financial discipline. I am pleased with what the team have achieved. With our operating expenses, cost of manufacturing expenses, plus cost of R&D expenses, plus cost of SG&A expenses were down almost $800 million in Q1 2024 versus Q1 2023. Jamey will elaborate on this in his section. With that, I will now turn to Jamey.
Jamey Mock (CFO)
Thanks, Stéphane, and hello, everyone. Today, I will walk you through our financial performance for the first quarter and provide commentary on our 2024 financial framework. Let me start with our commercial performance on slide 8. Net product sales for Q1 were $167 million, down 91% year-over-year, mainly driven by lower sales volumes of our COVID-19 vaccine in regions outside the United States. This decline aligns with the anticipated transition of the COVID-19 vaccine market towards a seasonal pattern. Whereas in the first quarter of 2023, we primarily delivered doses that were deferred from 2022.... Q1 was driven by sales in the U.S. and the rest of the world, largely Latin America markets. For Q2, we expect about $100 million in sales, for a total of approximately $300 million in the first half of 2024.
Q2 will include a portion of our recently announced contract with Brazil. Moving to slide 9. Net product sales were $167 million, as I just explained. For the first quarter of 2024, our cost of sales was $96 million, which included third-party royalties of $8 million, inventory write-downs of $30 million, and $27 million related to unutilized manufacturing capacity and wind-down costs. This resulted in our cost of sales representing 58% of net product sales, up from 43% in the same quarter last year. The increase in cost of sales percentage was primarily due to the lower level of sales in the quarter. We continue to expect the full year cost of sales to be approximately 35% of product sales. However, due to the strong seasonality of our business, we expect a higher percentage in the first half.
Moving to our R&D efforts, Q1 R&D expenses were $1.1 billion, reflecting a decrease of 6% year-over-year. This reduction was primarily due to the absence of upfront collaboration payments being made this quarter. The upfront payments made in the first quarter of 2023 were related to our strategic collaborations with Generation Bio and Life Edit. With the Q1 spend of $1.1 billion, we are tracking towards the full year expected spend of approximately $4.5 billion. Q1 SG&A expenses were $274 million, marking a 10% decrease year-over-year. Importantly, this decrease was driven by all functions in SG&A, and it is a result of our strong focus on cost discipline and strategic investments driving productivity. I will provide additional color on the next page.
We reported an income tax expense of $10 million for the first quarter of 2024, compared to an income tax benefit of $384 million in the same period last year. The shift is primarily due to the continued application of a valuation allowance on the majority of our deferred tax assets, which we first established in the third quarter of 2023. Net loss for the period was $1.2 billion, compared to net income of $79 million last year. Diluted loss per share was $3.07, compared to diluted earnings per share of $0.19 in 2023. We ended the first quarter with cash and investments totaling $12.2 billion, down from $13.3 billion at year-end 2023, largely attributable to research and development expenses and operating activities.
Moving to slide 10, I want to take a moment to elaborate on the efficiencies we are now seeing across the company. As a platform company, we have the opportunity to build a unique operating model, and over the last few years, we have invested purposefully into people, processes, and technologies to build foundational capabilities that will allow us to scale efficiently. First, we ended 2023 with nearly 6,000 employees, up from 1,300 at the end of 2020. Every function scaled capabilities to enable the increasing product launches we expect over the coming years. Additionally, as you know, Moderna has always led with a digital-first mindset. Over the past three years, we have nearly doubled our built-for-purpose software applications to digitally enable our teams. As an example, we recently went live with a newly implemented, rebuilt ERP system.
SAP S/4HANA is our new digital backbone for all our operational activities. We have used SAP in the past. However, it was built for a research and development-focused company, and now we have implemented an entirely revised version, supporting our end-to-end business processes more effectively and efficiently. Another example is our rapid adoption of artificial intelligence. Over the past year, we've built over 750 GPTs. One example in the legal space, our Contract Companion GPT, streamlines the task of reviewing and summarizing contracts across the business, with the GPT providing step-by-step guidance to craft a tailored, insightful summary. This enables any function to extract critical insights from contracts whenever needed, minimizing bottlenecks and freeing up Moderna's legal department to focus on work of higher strategic value, thus enhancing operational efficiency and decision-making.
Another example in G&A is a Purchase-to-Pay GPT for all questions around our procurement and payment processes. Instead of our employees having to find and read policies and procedures, they can easily query the GPT. It also saves time for our procurement and payables teams from answering numerous questions. AI has already basically changed our way in a short period. In general, we see the area developing with incredible speed that allows for an unprecedented impact on productivity in many ways. We have rolled out a comprehensive training program and are committed to driving this technology breakthrough. As a result of these strategic investments into people, processes, and technology, we were able to significantly reduce purchase services and our use of external consultants, which contributed heavily to the 10% year-over-year reduction in SG&A spend. We are also seeing similar benefits in R&D and manufacturing.
In general, we now have a solid foundation with our operating model. As we continue to grow our commercial activities, we will need to further invest. However, we will be able to do that more efficiently. Now, let's turn to the 2024 financial framework on slide 11, which is in line with what I shared on our last earnings call in February.... We continue to expect net sales for 2024 of approximately $4 billion, which we think will be a low point as we expect to return to growth in 2025. Sales in the first half of the year are now expected to be approximately $0.3 billion. We continue to expect cost of sales of approximately 35% of product sales for the full year.
For R&D, we continue to expect full year expenses to be approximately $4.5 billion, down from $4.8 billion in 2023. For SG&A, we continue to expect full year expenses to be approximately $1.3 billion, down from $1.5 billion in 2023. And we expect taxes to be negligible in 2024, and capital expenditures in 2024 to be approximately $0.9 billion. Finally, we expect to end 2024 with approximately $9 billion in cash, after touching a low point of approximately $8 billion at the end of Q3 due to the seasonality of collections. Finally, let me also touch on our recently announced project financing deal with Blackstone, which we are excited about.
In March, we entered into a development and commercialization funding arrangement, which commits Blackstone to providing us with up to $750 million of funding for our flu program, so that we can strengthen the product label and fulfill our remaining regulatory applications. Subject to the regulatory approval in the United States, which depends on data from the funded activities, Blackstone will be entitled to receive up to $750 million in sales milestone payments. These milestone payments are contingent upon achieving specified cumulative net sales targets for our future influenza and combination vaccines. Additionally, Blackstone will earn royalties on applicable net sales at a low single-digit percentage rate. This funding will offset our R&D expenses and is factored into our R&D framework for the year of approximately $4.5 billion.
Overall, we are excited that this deal enables us to accelerate the advancement of our pipeline, and with that, I will now hand the call over to Steve.
Stephen Hoge (President)
Thank you, Jamey. Today I'll review updates from our clinical programs that were shared during our recent Vaccines Day, as well as new developments in our therapeutics portfolio. Starting with respiratory vaccines, we shared updates to many of our respiratory programs at Vaccines Day in March. Our RSV vaccine candidate is undergoing regulatory review in multiple countries, and pending approval, we expect to launch the product in the United States following the June ACIP meeting and recommendations this year. At Vaccines Day, we shared updates from co-administration studies of RSV, confirming the ability to administer our vaccine and other vaccines given during the respiratory season. With our flu program, we recently presented data from our phase III P303 study at ECCMID, and continue discussions with regulators globally toward the goal of filing this year.
For our next generation COVID vaccine, mRNA-1283, we've presented positive phase III safety and immunogenicity data and are engaging with regulators on the path to approval for that product. Our combination flu and COVID vaccine, mRNA-1083, is in phase III, and we look forward to sharing those clinical data in the current quarter. Turning now to our latent and other vaccines. As shared at Vaccines Day, we've made significant progress in this portfolio. Our CMV vaccine, mRNA-1647, has fully enrolled its phase III trial, and we have the potential for an interim analysis of efficacy this year. We announced positive phase I immunogenicity and safety data from our EBV vaccine candidate, mRNA-1189, and we are now advancing towards pivotal trials with that program. A second therapeutic EBV candidate, mRNA-1195, is in a separate ongoing phase I study.
mRNA-1468, our vaccine against Varicella-Zoster virus, showed strong immunogenicity, including strong T cell responses, and we are preparing to move that program forward towards a pivotal phase III study as well. And our HSV vaccine against herpes simplex, mRNA-1608, is now fully enrolled in its phase I/II study, and we look forward to sharing clinical data updates when that's available. Now, rounding out this portfolio, we presented the positive clinical data from our norovirus vaccine candidate, mRNA-1403, and shared that we are advancing that program towards its pivotal phase III trial. Turning now to oncology therapeutics. We are happy to report our ongoing phase III studies are enrolling well.
We were excited to announce three new INT trials, including a randomized phase II/III study in neoadjuvant and adjuvant cutaneous squamous cell carcinoma, a randomized phase II trial in adjuvant high-risk muscle-invasive bladder cancer, and lastly, a randomized phase II trial in an adjuvant renal cell carcinoma. Now, recently at AACR, we presented phase I data from our INT program in advanced unresectable, HPV negative head and neck cancer in the metastatic setting. At AACR, we also presented phase I translational data from another oncology therapeutic program, mRNA-2752, in various tumor types. Links to both of these presentations are provided on the slide. Now, as a final note, at ASCO, we'll be hosting another Moderna oncology event on the evening of June third, and we look forward to seeing you there or having you join us virtually. With that, I'll turn it back over to Stéphane.
Stéphane Bancel (CEO)
Thank you, Stephen and Jamey. Slide 18 is an overview of our COVID-19 strategy for 2024, which is focused on the needs of each region.
... In the U.S., our focus is working with public health officials, healthcare providers, and pharmacies to increase vaccination coverage rates. In Europe, we're actively participating in the 2024 tender process. The tender allows for up to 36 million doses per year for up to 4 years. In the rest of the world, we have reoriented our commercial teams to prioritize markets for greater commercial focus and impact. As mentioned earlier, the Brazil contract is an example of how this is working. In the fall of 2023, U.S. COVID vaccination rates lagged behind flu vaccination rates. U.S. COVID vaccination rates were 11%, with flu vaccination rates at 4 times that. Yet, COVID continues to show a higher burden of disease.
U.S. hospitalizations for COVID between October 2023 and last week were 424,000 people, which is markedly higher than hospitalization from either flu or RSV infection. Actually, COVID hospitalizations were around the same level as hospitalizations of flu, plus RSV combined. In addition, long COVID continues to be a serious risk. Too many healthy young adults in their twenties, their thirties, their forties, are losing lung capacity and/or mental capacity due to long COVID. The data shows that COVID-19 vaccine reduce the risk of long COVID by 70%. We believe education and awareness will be very important. We are working on educating consumers about the need for an annual COVID vaccine, just like flu. Too many people are getting hurt when we have safe and effective vaccines available. Our job will not stop until these hospitalization numbers come down significantly.
As you know, strain selection by health authorities affects the approval and launch of COVID vaccine. Health authorities, including the WHO and EMA in Europe, have recently selected the JN.1 strain for the 2024-2025 formula. The FDA will host the VRBPAC meeting on May 16 to select a strain for the U.S. market. Moderna has already manufactured JN.1 drug substance to support the potential August launch. We have also prepared for backups in case the FDA does not select JN.1. In 2023, COVID vaccines were available five weeks later than flu vaccines. In the retail channel alone, more than 3 million flu vaccines were administered before the updated COVID vaccines were available. As we look into the fall 2024 season, we see the potential to align the timing of flu and COVID vaccine approvals.
We are encouraged by the earlier VRBPAC meeting for this year's COVID strain selection versus last year, and we're working with the FDA and regulators for timely COVID approval. We expect higher vaccination updates if COVID vaccines are available sooner. Turning now to the anticipated launch of our second respiratory vaccine, our RSV vaccine, which is expected to launch into a large market. In its first year, the older adult RSV market was $2.5 billion in sales, and analysts expect the older adult market to grow between $6 billion and $8 billion per year. With marketing application filed in markets globally, we are anticipating approval beginning in the first half of 2024. In the U.S., we're targeting a launch after the June ACIP meeting. We are very excited to bring a product with a strong differentiated profile to market.
Our vaccine has showed strong efficacy and safety data in clinical trials, and will be the only product available in the prefilled syringe of PFS presentation. Let me now double-click on what we believe are the benefit of PFS. We recently published a time and motion study that shows faster preparation time for PFS relative to vaccine that require constitution. We call that both RSV competitor vaccines on the market require multiple steps to prepare the vaccines for administration. One vaccine requires four steps, and the other, nine steps to prepare. Our PFS presentation is a ready-to-use vaccine straight out of the box. The study found that PFS presentation to be three to four times more efficient, as measured by preparation time. Details from the study can be found through the link on the slide.
We believe our PFS presentation for RSV vaccine has the potential to ease the personal burden on pharmacies during the fall respiratory season. Big pharmacy chains, but also independent pharmacies, and we are looking forward to the launch. Let me close with major upcoming pipeline milestones. While we're excited about the commercial prospects for the year, we're even more excited about the upcoming pipeline milestone and the effect they will have on our commercial outlook for the next several years serving patients. In respiratory, in respiratory vaccines, we are eagerly awaiting the approval of RSV and the ACIP recommendation. We are also waiting for data for RSV in the age group 18 and above. We are in discussion with regulators on the flu program and intend to file in 2024.
With our next gen COVID vaccine, mRNA-1283, we are pleased with positive phase III immunogenicity data and are engaging with regulators. Our flu plus COVID vaccine combo should get its phase III data soon. In latent, with CMV fully enrolled and accruing cases, we look forward to potential for phase III efficacy data in 2024. In our INT program, we're looking forward to completion of enrollment for our phase III adjuvant melanoma study. In addition, we are keen to discuss the possibility of accelerated approval with regulator based on phase II study data. As we shared before, there are three things we view as necessary before we could consider pursuing accelerated approval for INT. First, durability data from our phase II study, which we announced in December last year. Second, a substantially enrolled phase III adjuvant melanoma study.
And third, manufacturing readiness at our Marlborough site. And last but not least, our rare disease portfolio, we look forward to initiating pivotal study for PA and MMA. This milestone will represent continued progress towards our mission to deliver the greatest possible impact to people through mRNA medicine. And at Moderna, we are dedicated to achieving them all. Every data continues to confirm the power of our platform and its breadth in the service of patients. Two important save-the-dates for your calendars. We'll discuss our oncology program in Chicago on June 3rd, and our annual R&D Day will be held in New York the morning of September twelfth. Thank you for listening, and we look forward to taking your question. Operator?
Operator (participant)
Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered or if you're in queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Salveen Richter with Goldman Sachs. Your line is open.
Salveen Richter (Managing Director)
Good morning. Thanks for taking my questions. Firstly, could you discuss your strategy for pursuing contracts for the RSV vaccine, given two approved vaccines that have a head start timing-wise? And help us understand, if you've communicated with large retail pharmacies, how significant the PFS formulation is to them. And then, secondly, with regard to moving into the three new indications for the INT program, maybe help us understand signals or specific data points that support that. Thank you.
Stéphane Bancel (CEO)
Good morning. On the RSV contract, so as you know, we're not allowed to contract until the product is approved by the regulators. But what we are doing, because we can do that, is our medical team are actively engaged with retail pharmacies, but also ID and hospital networks, in terms of making sure the data on the efficacy profile of a product, on safety, and of course, on the PFS and the benefits of PFS in terms of productivity. Those discussions are ongoing literally on a daily basis, including with leadership of those pharmacies. And the next step, of course, is to wait for the FDA approval. Stephen?
Stephen Hoge (President)
Yeah, sure. Thanks for the question. On the 3 additional INT indications, I think the short version of it is they are all adjuvant settings, similar to our melanoma phase II results have been so encouraging, where our Keytruda has a known benefit, and where we still believe that there's an opportunity to improve upon that by driving a specific T-cell response with INT. As you know, in phase I, we looked across a range of different indications. That was more in the metastatic setting.
But as we've announced, since we first saw that positive phase II results from melanoma, we have been aggressively pursuing adjuvant indications where IO, as it is approved and where we see an opportunity, and all three of these fit squarely in that space.
Operator (participant)
Thank you. Our next question comes from Michael Yee with Jefferies. Your line is open.
Michael Yee (Managing Director)
Hey, guys, thanks. Two questions as well. On RSV, I guess, the competitor, GSK as well, this week was commenting about how they are expecting you to be in the mix, and contracting is ongoing. I know you have some RSV in your guidance. I think the math implies maybe $hundreds of millions. Can you just perhaps comment on how you adjusted or probability adjusted or thought about how much is there in your guidance and your confidence on that for this year? And then secondly, on INT as well, I know you have some data at ASCO. I know you have breakthrough therapy and prime designation. How important is the phase III enrollment progress, the confirmatory study? I feel like that's always an important discussion with FDA.
How important is that progress before you can really engage with FDA? Thank you.
Jamey Mock (CFO)
Yeah, maybe I'll take the first one. Thanks, Mike, for the question. So as you may know, we haven't guided any specific guidance or number for RSV. In the past, we did break down the $4 billion into three different segments around the U.S. market, the APAs we walked into the year with, and then another category of other COVID sales that didn't have any APAs across the rest of the world, a good example is Brazil that we just signed, as well as RSV. So no specific guidance for RSV from a financial perspective.
Stephen Hoge (President)
And on the question of INT, I think you nailed it. It's a really important topic, as in particular right now, as we think about accelerated approval, that we demonstrate the diligence and substantially enroll the confirmatory study. So really all you're waiting for is for that study to mature, could be several years. We think it's really important. To be fair, we have not, you know, consulted with the agency on that yet. As we've said, we're waiting until we've crossed our own threshold, and also at this point, until we've established the manufacturing facility or outlined the site to them. But we do feel that, as we've said, substantial enrollment, demonstrating that essentially all you're waiting for is the readout on that confirmatory study, is our obligation before we even want to go forward with that question.
We are making great progress this year, and we're optimistic that both that and the facility will be available in short order. Then, of course, we'll want to start engaging with our peers, including the FDA, on the question of accelerated approval.
Michael Yee (Managing Director)
Got it. Thank you very much.
Operator (participant)
Our next question comes from Terence Flynn with Morgan Stanley. Your line is open.
Terence Flynn (Managing Director and Senior U.S. Pharma and Biotech Analyst)
Great. Thanks for taking the question. Maybe, two-part from me. Just on the RSV vaccine, can you provide your latest perspective on what the most likely ACIP recommendation will be? Will you get a, a parity recommendation to the competitors, or you think there's a potential for a differential recommendation here? And then just wondering, any update on your, ongoing conversations regarding filing your seasonal flu vaccine? I know you mentioned in your prepared remarks, but just any more insight in terms of what the, the gating steps are here? Thank you.
Stephen Hoge (President)
Thanks for both questions. So first on RSV, you know, starting by saying, we have to complete the approval process with FDA, and then at the end of the day, the recommendation really falls to ACIP and the committee members, so I defer to them. Our expectation, our hope, is that when they review the data package that we already have, as well as additional data that we expect to be able to share at the ACIP meeting on durability through a second season and on immunogenicity across other populations, we expect a parity recommendation. We certainly think the data supports that. But again, I'll defer to the committee members on the ultimate decision.
On the question of flu, we are actively engaged right now with regulators on the process for submission of the flu vaccine. As I mentioned a moment ago, we are also closing in on clinical data from our combination flu COVID vaccine, mRNA-1083, and that obviously has an important role in our engagement with regulators generally on flu versus flu COVID combinations. And so those discussions are ongoing. I won't provide any other update on it except to say, as we've said today, and we would continue to say, we expect to file the flu product this year, but it'll be dependent upon a number of considerations, plus possibly also including the flu COVID data that we expect to see soon.
Operator (participant)
Thank you. Our next question comes from Eliana Merle with UBS. Your line is open.
Eliana Merle (Senior Biotech Equity Research Analyst)
Hey, guys. Thanks for taking the question. On CMV, how are you thinking about the need or benefits of potentially boosting, both from a clinical as well as a commercial perspective, and if you would study this? And then second, just on CMV, if you don't meet the interim primary analysis there, would you disclose that? Thanks.
Stephen Hoge (President)
Great. Thank you. So, first, on the question of boosting. So, so far, what we have, we obviously don't have the efficacy readout. That's the phase III study that's ongoing. But we do expect to have quite substantial durability data on immunogenicity, and it's quite possible the efficacy data will give us a signal what the correlate of protection should be. And so, we don't right now, have any evidence that they're not good, durable, multi-year, you know, possibly as long as five years, we continue to track the immunogenicity protection. It's possible that'll extend out to 10 years, you know, and then some boosting is necessary. It's also possible that we decide that a booster might be necessary shorter term than that, let's say five years or 10 years. We just don't know at this time.
And so at present, the data we do have on the durability of the immunogenicity, it looks quite strong. And so we do think a three-dose series will likely be protective for a very long period of time, all subject to the efficacy data that you just referenced. So on the interim analysis for efficacy, as we've said before, we're making great progress in that study in accruing cases, and we do expect to be able to provide an update on or conduct at least an initial interim efficacy analysis this year.
Because of the rate of case accrual and also because the protocol calls for us to cross a median of one-year follow-up, the timing may be such that by the time we get to that first interim analysis, we are also have enough cases for a final analysis or that a final analysis is imminent, let's say it's a very short period of time away. And so because of that uncertainty, until we see that data and understand how close we are to that final analysis, I don't think we can commit one way or the other, whether we're going to be updating. It will really depend upon the data we see and then how quickly we expect to get that final analysis.
At the end of the day, if we have news to share, both on the interim and the final, we of course will, but I don't think we can commit at this stage because we haven't seen the data yet.
Eliana Merle (Senior Biotech Equity Research Analyst)
Great. Thanks.
Operator (participant)
Our next question comes from Hartaj Singh with Oppenheimer. Your line is open.
Hartaj Singh (Managing Director and Senior Equity Research Analyst)
Great. Thank you for the question. I just have a question on, you know, you're developing a refrigerator-stable vaccine and a flu vaccine, I believe, and I'd just like to kind of understand how you think about that, when could that get approved, and then will the combo vaccines also be refrigerator stable? Thank you.
Stephen Hoge (President)
Great. Thank you, Hartaj. So-
Operator (participant)
Ladies and gentlemen, please stand by. Your conference will resume momentarily. Once again, ladies and gentlemen, please stay on the line. And pardon me, can you hear me now? Could you try speaking again? Your line was muted.
Stephen Hoge (President)
Yeah, I'm here. Can you hear me?
Operator (participant)
Yeah, we can hear you now. So, your line got muted, but you can go ahead and continue.
Stephen Hoge (President)
Great. Sorry for that brief interruption. Hartaj, thank you for the question. Just to quickly restate what I was saying. All of our respiratory portfolio, RSV, flu, COVID, and the flu-COVID combo, are being developed towards refrigerator stable PFS. And so our mRNA-1083 program, the flu-COVID program, as well as the flu program, are intended to be a refrigerator-stable, prefilled syringes. As Stéphane mentioned a moment ago, we really view that as the ideal presentation, the optimal presentation for healthcare providers, really, around the world, to facilitate their delivery of the vaccine to patients.
Hartaj Singh (Managing Director and Senior Equity Research Analyst)
Great. Thank you. Thanks for the question, Stephen.
Stephen Hoge (President)
Thank you.
Operator (participant)
One moment before our next question. Our next question comes from Gena Wang with Barclays. Your line is open.
Gena Wang (Managing Director and Senior Equity Research Analyst)
Thank you for taking my questions. I have two. One is regarding COVID. So, for the EU, you said up to 36 million doses every year in EU. What could be the scenario you can get 36 million doses in EU? And also the price in Brazil and the, EU, should we use pandemic price of $25-$30 per doses as the benchmark? Quickly on INT, accelerated approval path. Based on, let's say, today's comments and the prior discussion, our impression is you could achieve all the three key components, by the end of this year. Is Merck is also, fully on board, to submit for the accelerated approval in melanoma?
Stéphane Bancel (CEO)
Thank you, Gena. It's Stéphane. I'll take the COVID question, and then Stephen will talk about INT. So the tender is up to 36 million doses. It will depend on the number of countries that apply to the tender for the EU. So this we'll know at the end of the process, and as you know, it's a tender process, so there's no dialogue. We're just ensuring all the files and all the data, and that's really ongoing. The team is obviously very active on it. And on price, for obvious competitive reasons, we're not going to share price in any market, to... Because competitor doesn't know the price right away. Stephen, INT?
Yeah. So, we haven't specifically guided to when we expect to complete, obviously, the second and third parts of our three-part criteria. That being manufacturing readiness, as you can imagine, work is going on around the clock, as well as the enrollment, which we've made great progress, but, you have to sustain that progress. On your question of, you know, where is Merck on this? I think, you'll have to direct it to them. Our view, you know, is that, if we're able to get to the point where accelerated approval is appropriate and regulators are supportive of that, we can't imagine why, ourselves and Merck wouldn't want to make the product available to help people suffering from cancer right now.
But the, you know, the contingencies there are obviously we have to do our work and our diligence this year. And then ultimately, we have to speak to regulators, and, and they get to decide whether that pathway is available to us. And so I think for both ourselves and our partner, Merck, we'll want to defer to regulators ultimately on that choice.
Gena Wang (Managing Director and Senior Equity Research Analyst)
Thank you.
Operator (participant)
Our next question comes from Luca Issi with RBC Capital. Your line is open.
Luca Issi (Senior Biotechnology Research Analyst)
Oh, great. Thanks so much for taking my questions. Maybe a quick, very quick one on RSV. I think your last press release actually cited May 12 as the PDUFA date, while today you're simply saying that initial regulatory approvals in the first half of 2024. So is there anything to read into it? Can you just confirm that the PDUFA date is still May 12, which is actually the end of next week? And then maybe second, on IP, can you just comment on the recent decision by Judge Goldberg to rule, obviously, in favor of Arbutus for their LNP article? You know, our understanding, this can have a pretty material impact on both prior and future sales of COVID. So again, any thoughts there are much appreciated.
Then super quickly on INT, Steve, what's holding you back on starting a randomized trial in head and neck cancer in the metastatic settings? I thought the data they see out was pretty impressive. So, any thoughts there are much appreciated. Thanks so much.
Stephen Hoge (President)
Great, thank you for this question. I'll take the first and the third very quickly. So on the question of RSV, we continue working towards the same PDUFA date. And there's not a change to that. As you know, there's a lot of work, and around-the-clock work by ourselves, obviously, and folks at the agency. And so we're, you know, hopeful that that happens as planned, but if it takes a little bit longer, at the end of the day, what really matters is the June ACIP meeting, but there's been no change to report, so don't read anything into that. As far as the INT question, you know, on head and neck. I appreciate the question because we are also obviously enthusiastic about that data.
However, our partner, Merck, and ourselves, we have not yet decided where that sits in the priority of other indications, pathologies, and opportunities we're pursuing. As you've already seen in the past year, we've stood up a very large number of studies, and we're just trying to pace ourselves. And so, it'll, you know, take us a little bit of time with our partner, Merck, to determine what the next steps are in head and neck, and at this point, we do not have an update on it.
Stéphane Bancel (CEO)
Thank you. I'll take the IP questions. I mean, as you know, our COVID-19 vaccine technology, including our lipid nanoparticle delivery system, is a result of independent research and development. We have a strong belief that our technology does not infringe on the patents asserted by Arbutus. We're confident in our position, and we look forward to presenting our case at trial next year.
Operator (participant)
Thank you. Our next-
Stéphane Bancel (CEO)
Thank you.
Operator (participant)
Sorry. Our next question comes from Jessica Fye with J.P. Morgan. Your line is open.
Jessica Fye (Managing Director and Equity Research Analyst)
Hey, guys, good morning. Thanks for taking my questions. I had a few here. So for INT, I know you mentioned you can't comment on when you expect a complete manufacturing scale-up, but can you provide a status update on where you stand with that today and the number of patients you can support right now? As well as where you want to take that capacity once you get to the end of this 3-phase scale-up process, even if you don't put a timeline on, on when you'll get there. Next one is, coming back to flu. Can you just refine a little bit when the 1083 immunogenicity data will be available, and maybe elaborate on how the combo data play a role in the regulatory talks on 1010?
I thought you previously said these products could stand on their own, and that you might not need 1010 approved to get 1083 approval. So now wondering kind of why 1083 might factor in for 1010. And then lastly, on CMV, can you remind me how the risk of CMV in pregnancy compares in seropositive versus seronegative individuals? I'm thinking from a commercial standpoint, how you weigh the strategy of pursuing vaccinating everyone versus just seronegative people. Thanks.
Stéphane Bancel (CEO)
Great. Thank you for the questions. I'll start with the INT question on manufacturing, and then Stephen will take the rest. So, we have not provided the capacity numbers for the factory in Marlborough, but of course, as you can assume, we know the size of our melanoma market, and we know how strong our data are. We've wanted people benefiting from the phase II data. So we've, we've sized the plant accordingly, as you can imagine. But also, we are building the plant for scale, because as you know, Stephen and his team and their colleagues are running a lot of studies. So this is not a plant for melanoma, it's a plant for INT. Again, from a manufacturing standpoint, we don't care which cancer it is in term of organ, because we use genetic information to design an individualized product for every human being.
So basically, we bought a plant last year that was kind of a big building, finished, to save us time to market. Obviously, we don't have to get the permitting and build the building. And so the team since then, that is now more than a year ago, has been working actively to get the plant ready. And the plant is going to be built in modules inside the building. So basically, we're going to launch with the first module of manufacturing capacity, and then one day, for maybe we do an opening of a facility like we did for Norwood. You will see there's a lot of empty space left behind, which allows for very quick ramp up because the HVAC system and all the utility system has been set up for the entire plant.
And so then you just add modules as you go. So we'll have the ability to scale very quickly as we get more indications, available. But again, we are aware of the melanoma, number of cases, and so the plants will be sized, so we make sure we can provide products to patients. Stephen?
Stephen Hoge (President)
Great. Thank you for the clarifying question on flu. So let me just start by saying, independently, we are looking to submit both the flu program and the flu COVID combo program, so that's 1010 and 1083. Obviously, we need to see the 1083 data, and we'll announce that when we have it. The question on the timing of that data, it's imminent, and so in the coming, you know, quarter, we expect to be able to share that update. The point about interdependency, I suppose, is just more about sequencing of those submissions, and in some places, in some regulatory geographies, obviously, you can't stack them on the same day, if you will. There's a logical sequence.
What we'll want to assess once we see the 1083 data is our regulatory strategy, as well as our preparation and delivery of data for the submissions to determine which one will go first or second. But at this point, we're trying hard to make sure that we can do both products across all of our major markets if the data is positive this year. And so, yeah, go more on that as we move forward, but for now, we are proceeding with both independently. Sorry about any confusion about that. On the question of CMV and seropositivity. So it's a really important point.
Thank you for raising it, but while the risk of vertical transmission of CMV to a pregnancy, to a fetus, is highest in seronegatives, it does happen in seropositives as well. So congenital CMV is a disease that's seen particularly in reactivation or sometimes reinfection, even in the seropositive context. So we do believe that there's a potential for benefit for a vaccine even in the seropositive population. We are evaluating a study right now in seronegative, because the rate of that transmission and obviously the potential to prevent against infection is more enriched, and therefore the study size primarily are focused on the seronegatives. But we are looking, we have studied the vaccine from a safety perspective in seropositives, and we are looking at things like shedding.
If you draw a little bit of an analogy to, or correlate to the EBV data that we've already put out there in a different virus, but we've been able to show that we can really control the rates of shedding, even in seropositive, basically, Epstein-Barr virus. And so we have some reasons for optimism. We believe that, when we pull together the totality of the data, there will both be the obvious potential benefit, which is that there is still vertical transmission in seropositive, and some potentially some data on the rates of shedding that would be supportive to that. Ultimately, though, we're studying all the way down to 16-year-olds.
And our goal will be, you know, a label that's 16+, with a goal of going into a population that is not as highly seropositive as it is later in life, and therefore, we see a very large opportunity to prevent primary infection with CMV, with a vaccine and a potential for seropositive, as I just said.
Jessica Fye (Managing Director and Equity Research Analyst)
Thank you.
Operator (participant)
Our next question comes from Geoff Meacham with BofA. Your line is open.
Alec Stranahan (VP and Senior Analyst in Equity Research)
Hi, this is Alec Stranahan on for Geoff Meacham. Thanks for taking our questions. So on your Zoster vaccine candidate, when should we receive updates on your pivotal strategy? And is there any color you can provide today in terms of your current thinking on the phase III design? And then our second question is on the PA and MMA programs that are advancing into pivotal trials, can you provide any thoughts on the Nature editorial and the comments on safety? Thank you.
Stephen Hoge (President)
Yeah, could you just clarify, the first part of the question was on which program? The booster?
Alec Stranahan (VP and Senior Analyst in Equity Research)
The Zoster, the shingles.
Stephen Hoge (President)
Shingles booster. Thank you. So, on the VZV program, we're obviously very excited by the phase I data, which was compared against a licensed product, and we saw really strong T-cell responses in immunogenicity. And, generally, we've been seeing that across our programs, but in that one, it was very encouraging. We're in the process right now of trying to find a pivotal strategy that will include, obviously, dose selection, you know, the number of doses in that study and then how we're going to conduct that study. We do not have an update today on what that will look like. In addition to our own thoughts on it, we'll obviously want to consult with regulators before we finalize that final report. But we are moving forward towards a pivotal study in VZV.
We do not have a timeline on that update yet. As it relates to MMA and PA, you know, the clinical data that we have continues to show a compelling benefit-risk profile, good safety profile. In fact, in the PA studies, we have many folks who've been in those studies on drug for well over a year, and over 30 years, I think, per last update in overall patient dosing experience. So we are starting to get very clear perspective on the safety profile. The editorial question, I don't have a view on editorials or opinions, you reading on the preclinical data.
I think we stand behind the clinical data that we have and are quite encouraged by that profile, and we'll continue to watch it closely in our ongoing phase I studies. But we do not have any specific or new concerns based on the clinical data today.
Alec Stranahan (VP and Senior Analyst in Equity Research)
Thanks.
Operator (participant)
Our next question comes from Evan Wang with Guggenheim Securities. Your line is open. One moment.
Evan Wang (VP and Senior Analyst in Equity Research)
Question two from me. First, on the combo 1083 program, so data sounds like this quarter. I believe enrollment was completed a few months ago, so I guess, how comprehensive will the top line update be in terms of follow-up? And then with submission, is longer-term follow-up needed there, and are there parallels from 1010 that we can take in terms of regulatory filing speeds for 1083, or is that more impacted by the decision for filing one or the other first? And second, on RSV, you know, it's kind of early ahead of approvable, but with some international markets, seems that's more nascent in terms of establishing some reimbursement there. So I guess, how are you thinking about positioning internationally? Thanks.
Stephen Hoge (President)
Great. Thank you. So for the 1083 data, yes, on this quarter, and I would say that we enrolled the majority of the 1083 studies you know, last fall, and the 1010 second generation study. So we've talked about the P303 study. The first part of that enrolled over last summer, just a few months before the combo study. And the second part of it, there was a part B and C, as you, as you know, looking at head-to-head against Fluzone HD, that actually enrolled the same time as the 1083 study, so last fall. And so they've been actually kind of tracking right on top of each other.
I think we're gonna wait to see the data before we can provide guidance on timing, but obviously, we've been working towards that flu COVID combination product for a while, and we will want to make sure that we get that filed, if the data is positive, as fast as possible. I wouldn't draw too many because the difference in the structures of the study between the P303 study, which had a part A, and a B and C, and the 1083 study, which was done very quickly and well, I wouldn't draw too many correlations between those reading out, and the timing for submission on either one. Stéphane, do you want to take the RSV question?
Sure. So the international markets are obviously very important. The U.S. is very important, but the U.S., international are also super important. As we've shown before, we filed in all the major geographies already, you know, of course, E.U., U.K., Canada, Australia, you know, some countries in Asia, some countries in the Middle East. You know, RSV is well known for by public health leaders like it is in the U.S. So I think that there's a very strong desire, again, to protect the, the elderly, like what we are doing here, you know, in terms of, you know, through COVID, RSV, that's becoming really kind of a standard that public health leaders, health ministers across at least the developed world, but even in developing countries, there's more and more interest as you see aging population everywhere.
So it's not only the U.S. approval that we expect, you know, coming soon, is we have several geographies that should start being approved soon.
Operator (participant)
Thank you. Our next question comes from Simon Baker with Redburn Atlantic. Your line is open.
Simon Baker (Partner and Head of Global Biopharma Research)
For taking my questions. 2 quick ones, if I may. Just in terms of the, the timing on, CMV, the CMV interim data, you said this quarter it could be as early as the end of 2024. That, that sounds slightly later than, you'd previously said. I just wondered if that's, that's me overinterpreting the semantics or whether there is, a, a slight delay there. And then the second question is on the HSV, vaccine. Previous quarters, we talked about the, the EBV vaccine and the, the potential utility in multiple sclerosis. So I just wonder what your thoughts were about HSV and its, the hypothesis that implicates its role in Alzheimer's disease. Thanks so much.
Stephen Hoge (President)
Thank you for both questions. So first, on the clarification, there's no change to our expectations on when the CMV readout will happen. I think we previously tried to, you know, be careful in saying that we expect it to happen this year. And so obviously by the end of this year is meant to say the same thing, but there's no change in our expectations at this point. On the HSV, Alzheimer's hypothesis, it's a very interesting. You know, there's a lot of neuroinflammatory questions that go with a herpes simplex virus infection across a range of different indications, Alzheimer's one of them.
At this point, the studies that we expect to move forward with, with HSV, will be, for seropositive to, to improve outcomes, so shedding days, for instance, or lesion days. And then eventually, we will want to consider whether we want to go at prevention of infection, which is obviously a, a different standard, a different indication, that might be more relevant for then how you think about, some of the neuroinflammatory or long-term sequelae. I think you asked my opinion on the science. I think it's incredibly interesting and exciting. I do think it's early for us to start drawing connection from a vaccine perspective in terms of our potential impact for it. You know, I hope over time, there is an opportunity to intervene in things like that.
Obviously, in the EBV vaccine with multiple sclerosis, that science has firmed up to the point where there's reasonably high conviction that there's a potential for benefit there. We have to go prove that, but at this point, it's still earlier days, I think, with HSV and Alzheimer's.
Simon Baker (Partner and Head of Global Biopharma Research)
Great. Thanks so much.
Operator (participant)
Our next question comes from Edward Tenthoff of Piper Sandler. Your line is open.
Lavina Talukdar (Head of Investor Relations)
One moment for our next-
Edward Tenthoff (Managing Director and Senior Research Analyst)
Great. Thank you very much for taking the question, and congrats on everything. Actually, most of my questions have been answered, but I wanted to ask, with respect to the cancer efforts, you know, how are you able to break out what the actual R&D cost is for that program? And that's still a cost and profit share with Merck. And how many indications do you guys ultimately plan on pursuing? Thank you so much.
Stephen Hoge (President)
Maybe I'll take the first one, Ted. So, no, we obviously know what we're spending, but it's not something that at this point, that we are prepared to disclose. So-
Edward Tenthoff (Managing Director and Senior Research Analyst)
Sure.
Stephen Hoge (President)
Maybe someday, but not at this point.
Edward Tenthoff (Managing Director and Senior Research Analyst)
Understood. And then with the expansion-
Stephen Hoge (President)
On the indication-
Edward Tenthoff (Managing Director and Senior Research Analyst)
Yeah. Yeah.
Stephen Hoge (President)
Yeah, on the expansion indication, look, it's a joint decision. Our partnership with Merck has been really strong. We've been building this out. We do like to review those strategically, and then bring them forward once we've started them. And so I don't want to get ahead of that-
... because those are private strategic conversations with Merck. But we are not done yet. We will keep adding in the years ahead.
Edward Tenthoff (Managing Director and Senior Research Analyst)
Yep, very exciting. Look forward to seeing you in Chicago.
Stéphane Bancel (CEO)
Thank you.
Operator (participant)
Ladies and gentlemen, this concludes the Q&A portion of today's conference. I'd like to turn it back over to Stéphane for any closing remarks.
Stéphane Bancel (CEO)
Well, thank you, everybody, for joining in today and for your great questions. We look forward to seeing you at the latest at ASCO. Have a great day!
Operator (participant)
Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.