Vaxcyte, Inc. (PCVX)·Q4 2024 Earnings Summary

Executive Summary

• Vaxcyte reported a strong operational Q4: cash, cash equivalents and investments were $3.13B at year-end, bolstered by $2.2B net proceeds from two 2024 follow-on offerings, with Q4 R&D $133.6M, G&A $28.5M, and net loss $137.1M .
• Pipeline execution advanced: VAX-31 secured FDA Breakthrough Therapy designation and remains on track to initiate the adult Phase 3 pivotal non-inferiority study by mid-2025 with topline data expected in 2026; the VAX-24 infant Phase 2 primary series topline is expected by the end of Q1 2025, and VAX-31 infant Phase 2 progressed to Stage 2 with primary series topline expected mid-2026 .
• Manufacturing readiness: Vaxcyte incurred $33.0M additional capex in Q4 and $127.8M in FY24 for its dedicated Lonza suite (cumulative $214.3M); management reiterated suite completion “early next year” and noted the project is ~60–70% against the $300–$350M plan .
• Near-term stock catalysts: impending VAX-24 infant Phase 2 primary series data (by end of Q1 2025), VAX-31 adult Phase 3 initiation, and ongoing policy discourse around ACIP/vaccine recommendations; management characterized DC engagement as constructive and bipartisan .

What Went Well and What Went Wrong

What Went Well

• VAX-31 adult data underpin strategy: strong OPA responses across 31 serotypes, non-inferior or greater responses vs PCV20 at middle/high doses, seven serotypes statistically higher at high dose; FDA granted Breakthrough Therapy designation .
  “Pending an end of Phase II meeting with the FDA, we remain on track to initiate the VAX-31 adult Phase III pivotal non-inferiority study by mid-2025 with top line … data expected in 2026.”
• Balance sheet strength: $3.13B year-end cash/investments enables Phase 3 program, infant studies, and Lonza suite completion; expected cash runway to fund multiple milestones .
• Infant programs progressing: VAX-24 Phase 2 primary series topline expected by end of Q1; VAX-31 infant study advanced to Stage 2 after blinded safety review .

What Went Wrong

• Elevated OpEx: Q4 R&D rose to $133.6M and G&A to $28.5M; management guided to a substantial increase in both R&D and G&A in 2025 vs Q4 annualized levels, reflecting inventory build and Phase 3 initiation—pressuring near-term losses .
• Policy noise: ACIP meeting delay created uncertainty; management advised caution against overreacting to “noise” and emphasized bipartisan support, but external headlines remain a risk .
• Estimate comparison unavailable: Wall Street consensus EPS/revenue from S&P Global was not retrievable during this session; as a pre-revenue company, margin/segment comparisons remain not meaningful.

Financial Results

Quarterly Operating Metrics

Notes:

• No product revenue reported; quarterly disclosures focus on operating expenses and net losses .
• Quarterly EPS was disclosed for Q2 ($1.10) and Q3 ($0.83) net loss per share; Q4 quarterly EPS not disclosed in the release .

Annual Operating Metrics

Q4 YoY

KPIs:

• Manufacturing suite progress: $214.3M cumulative capex at year-end; management indicated the project is ~60–70% of the $300–$350M plan and targeted to complete “early next year” .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Pending an end of Phase II meeting with the FDA, we remain on track to initiate the VAX-31 adult Phase III pivotal non-inferiority study by mid-2025 with top line safety, tolerability and immunogenicity data expected in 2026.” — James Wassil .
• “We expect a substantial increase in both R&D and G&A expenses in 2025… primarily the result of manufacturing-related investments to prepare for our initial launch in the adult market, including to build inventory, [and] the initiation of the VAX-31 adult Phase III clinical program…” — Andrew Guggenhime .
• “We would be disappointed with [six] non-inferiority misses… given this is a proof-of-concept dose-finding study… it is reasonable to expect a few non-inferiority misses.” — James Wassil on VAX-24 infant Phase 2 endpoints .
• “We have been encouraged by truly bipartisan acknowledgment that vaccines are… cost-effective… PCVs are the bedrock of our immunization programs.” — Andrew Guggenhime .

Q&A Highlights

• Infant endpoints and non-inferiority margins: Management clarified Phase 2 evaluation uses IgG-based seroconversion with historical non-inferiority margin of 10% for Phase 3 and a pragmatic 15% margin in Phase 2 due to smaller sample sizes; a few misses would still be consistent with advancing to Phase 3, especially with higher magnitude IgG responses .
• Read-through from PD3 to PD4: PD4 focuses on magnitude of IgG responses; adult data suggest potential for higher responses vs PCV20, which could support PD4 success even if PD3 has a few misses .
• Adult Phase 3 timing: Pivotal non-inferiority study initiation by mid-2025 with topline data ~12–15 months later; other Phase 3 studies to read out in 2026–2027 .
• Policy environment: ACIP delay attributed to public comment mechanism; management urged caution on “noise” and reiterated bipartisan support and institutional complexity of vaccine recommendation processes .
• Potential pediatric efficacy study (otitis media): Team is exploring a post-approval otitis media efficacy study for VAX-31 given high incidence and broader serotype coverage .

Estimates Context

• S&P Global consensus for Q4 2024 EPS and revenue could not be retrieved during this session; therefore estimate comparisons are not provided (pre-revenue profile also limits meaningful margin/segment comparisons). Consensus access error noted from S&P Global.
• Given Vaxcyte’s clinical-stage status and lack of disclosed product revenue in the period, near-term estimate updates are more likely to reflect OpEx trajectory and clinical milestone timing rather than P&L beats/misses .

Key Takeaways for Investors

• Near-term catalyst: VAX-24 infant Phase 2 primary series topline by end of Q1 2025; positive magnitude IgG signal would de-risk PD4 and Phase 3 design, potentially driving estimate revisions in out years .
• Adult launch path: VAX-31’s BTD and robust adult OPA profile support expedited progression; pivotal Phase 3 initiation by mid-2025 with topline in 2026 is intact .
• Cash runway: $3.13B provides multi-year funding across major milestones (VAX-31 adult and infant, VAX-24 infant, Lonza suite completion), mitigating financing risk despite elevated OpEx .
• OpEx ramp: Expect 2025 R&D/G&A to step up materially for Phase 3, inventory build and hiring—manage expectations for larger quarterly net losses near term .
• Manufacturing readiness: Lonza suite approaching completion; capex tracking 60–70% of plan and expected to hit P&L post-completion—important for commercial scale .
• Policy watch: ACIP-related headlines are a swing factor but management’s engagement suggests supportive environment; avoid overreaction to transient “noise” .
• Medium-term thesis: Dual-track infant/adult PCV strategy with broader coverage and higher immunogenicity vs standard-of-care positions Vaxcyte for preferred recommendations and commercial uptake if clinical and regulatory milestones land as guided .