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COVID-19 ‘is not leaving the planet,’ Moderna CEO says

Moderna Therapeutics CEO Stéphane Bancel joins Yahoo Finance Live to discuss first-quarter earnings, COVID-19 vaccine sales, profit growth, and the outlook for the biotechnology company’s RSV vaccine.

Video transcript

- Turning now to earnings in the health space. Moderna gets a booster shot. Moderna continues its climb as strong sales of its COVID-19 vaccine give the drugmaker's earning a shot to the arm, pun intended there.

The company hoping the news will turn around its stock battered by the long-term diagnosis of fading demand for their COVID-related products as the pandemic wanes and leadership citing a lot of unknowns in the future. With the company putting bets on research and development, hoping to score with flu shots, personalized cancer vaccines, and, as we mentioned, RSV.

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Joining us to talk about his company's earnings, Stéphane Bancel, Moderna chief executive officer. Stéphane, great to speak with you again. I know that this was a surprisingly strong quarter for some. Talk to us a little bit about that with the COVID demand and what you see through the rest of the year for COVID specifically.

STÉPHANE BANCEL: Well, good morning, and thank you for having me back. I'm very happy about the quarter and even more happy as the company is firing on every cylinders, both commercial and R&D. So the commercial side, I think people have too quickly assumed that COVID is gone. The virus is not leaving the planet, as you know well. And people are at high risk still getting hospitalized, still dying.

Every government we are talking to is getting ready for fall of '23 in terms of ordering products. And so we set a minimum of sales from contracts signed last year with $1.9 billion of revenues for Q1. We are well on our way.

And I'm very pleased about the progress the team is making in the US. Those are all new contracts on top of the $5 billion, with pharmacies, government agencies, hospital networks-- what's happening in Japan, what's happening in Europe, also in the rest of Asia, Middle East, and Africa. And so I think people have too quickly concluded that COVID sales are going to zero. They are not. COVID hasn't been reversed forever.

It is true that '23 might be a down year because of all the products purchased in '22, but I really think we're going to see that as the bottom year. '24, I think, will have higher COVID sales. And then excitingly, as you mentioned, RSV is on track to be launched in '24. Flu is on track to be launched in '24. The combination of COVID and flu for '25.

We have also great data in the coming weeks in terms of cancer vaccine. We announced last night rare disease and our new data coming in two weeks to big rare disease conference. So the company is really firing on every cylinders.

- Yeah, you jumped ahead of me there. I'm going to get to flu and RSV in a second. But talk to me a little bit more about the COVID outlook. Because I know that you definitely see it not going away. You have also some combo vaccines in the works. But, to your point, considering that it's not going to be the same revenue as you saw, of course, during the start of the pandemic, what are you expecting moving forward, especially considering that you don't have any near-term launches just yet?

STÉPHANE BANCEL: So I think what we're going to see in '23 this year is sales in excess of $5 billion. Again, we want to be cautious. $5 billion, we see it as a floor of deals already signed. But this assumes no sales from the US, no new sales from Japan, and no new sales from Europe and many other countries.

So as we are contracting in the coming weeks and months, I think we'll be able in the position to give a bit more visibility. But because no company has ever managed from a pandemic to an endemic setting, we want to be cautious. We don't want to disappoint.

And so you see us being very cautious on the top line, and we'll give more information as those contracts are signed. But from what I see from the discussions happening with countries, discussions happening with private clients in the US, I feel very positive about the current momentum.

- Definitely. So talk to me about RSV because I know you're trailing in that sort of race, if you will, with the 2024 launch when your rivals are looking at this year. Do you expect to still compete well in the market, or do you imagine a smaller share of the market as a result?

STÉPHANE BANCEL: So that's a good question. So first for context, we started developing that vaccine six years after with two other companies. So I think the mRNA platform was allowing us to really catch up. And this happened while the team, which was too small, was focused on COVID. So just for context, I think being just a little bit behind those two other companies is a pretty big achievement.

In terms of products, if you look at the efficacy data, especially what we showed at a recent medical congress, is in the older population and people with comorbidity, our efficacy is really best in class. And so I think that's going to help a lot because at the end of the day, doctors and consumer wants the best product.

They other piece is going to be the ease of use of a product. Some other products come in lyophilized form. What is that? It's powder in a little vial that has to be prepared in the pharmacy for every patient.

That is not fun in a world where there is not enough workers, where pharmacy chains are reducing the number of hours open because they are lacking pharmacists. Our product will come in a prefilled syringe, so a pharmacist will directly take the product out of the fridge and just clean the arm and inject it-- no prep work. I think that's going to be important.

The other piece too is a safety profile. As we all know, for vaccine, safety is very important. We have announced this morning that we still have no cases reported of Guillain-Barre Syndrome. And that's really important because the safety profile of a vaccine is key.

So when we look at the very high efficacy in elderly with comorbidity, when I think of the safety profile, when I think about the ease of use, I believe we actually might have the best vaccine. So we might be a bit behind, but we might catch up really quickly.

- And let's talk about flu because I know you have the combo set to possibly debut in 2025. But I think that's one of the reasons why investors are sort of lukewarm on the stock right now, talking about a longer term look at launches and the pipeline. Do you think that the pandemic really took time away from the production that you have and the development that you have, and you're sort of making up for lost time right now?

STÉPHANE BANCEL: For sure the pandemic slowed us down. You know, when we showed the cancer data in December, I mentioned that we lost at least a year in getting that beautiful data that I hope will help a lot of people with cancer because we had to slow down the recruitment of the cancer clinical study. So now we're kind of doubling down to catch up.

And the data are very, very strong. We announced this morning that we show even more data for more biomarker at ASCO, which is just a month away. So we lost a bit of time in helping the world get rid of this virus, getting back to a normal life.

But what also the pandemic has done is by validating the technology, by providing huge financial resources to Moderna. I mean, think about it. We announced this morning we still have $16.4 billion of cash. So this platform that we built for 10 years before the pandemic is coming to nature.

We have so many respiratory vaccine as we spoke about. We have a latent vaccine like CMV, EBV, for mononucleosis and so on. We announced recently a Lyme disease vaccine and then cancer and then rare disease where the data is looking also very strong.

So I think people-- as you know, in this industry, investors value a pipeline. They value sales, obviously, but they value a pipeline. If you look at Moderna in terms of '24 launch, '25 launch, and even more launched in '26, I think it's going to be unprecedented.

And the other piece too is the success rate. As you know, in pharma, 90% of the drugs getting into the clinic fail. Look at Moderna-- the COVID-19 vaccine. We did the best in class vaccine in nine months. And then RSV and then flu and then the cancer data-- there's been hundreds of cancer vaccine trials over the last two to three decades. Not one has worked.

The Moderna one is working beautifully. And we think it's not only working in melanoma, but also in lung and other cancer types. And then now rare disease-- but it's not one rare disease. There are dozens of rare disease in the liver. This is-- the first technology we're using is for PA, our first rare disease.

But what we'll do is to scale up many, many drugs in rare disease like we did in vaccine because we have a platform. So we have a platform with very high success rate and with a lot of capital. So I think investors are starting to really see what's coming.

- Certainly. Well, Stéphane, really looking forward to see what you have set up for the rest of the year. And thank you again for joining us today, Moderna CEO Stéphane Bancel.