Analyst Conference Summary

biotechnology

Moderna
MRNA

conference date: May 8, 2019
for quarter ending: March 31, 2018 (first quarter 2019)


Forward-looking statements

Overview: Clinical stage mRNA company continues to advance its pipeline. Moderna had its initial public stock offering in December 2018.

Basic data (GAAP):

Revenue was $16.0 million, down sequentially from down from $35.4 million, and down from $29.0 million year-earlier. All revenue is from collaboration and grants.

Net income was negative $132.7 million, up sequentially from negative $141.4 million, and down from negative $72.4 million year-earlier.

EPS was not stated, sequentially from not stated, and down from not stated year-earlier. Nor were the number of shares outstanding stated. But a public source listed 324.4 million shares outstanding.

Guidance:

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "We continue to execute against our corporate objectives as we progress clinical studies across our development portfolio, introduce a new mRNA rare disease development candidate and focus on identifying additional modalities and disease targets. We are excited to pursue a treatment to potentially address the underlying cause of glycogen storage disease type 1a, and we believe this candidate also reflects the continued productivity of our mRNA platform. At yesterday's annual Science Day event, we presented new insights into our mRNA and delivery science, including the potential delivery of mRNA to white blood cells. While our team has additional research to perform in this area, we look forward to being able to bring new candidates into development as we continue working to help patients with a wide range of serious diseases"

Moderna currently has 21 mRNA candidates, with 11 in clinical studies

Working on vaccines first was part of a risk management strategy.

Revenue decrease was a result of changing revenue recognition standards.

Merck has filed an IND with the FDA and plans to run a Phase 1 study for a follow-on development candidate mRNA-1172, a vaccine for RSV (Respiratory syncytial virus ). As a result, further development of mRNA-1777 has been paused and next steps will be determined based on data from the new mRNA-1172 Phase 1 study.

Based on an assessment of the commercial opportunity, research priorities and other factors, Merck has discontinued preclinical development of mRNA-1278, an investigational vaccine for the virus that causes shingles.

The first three dose levels in Moderna's ongoing Phase 1 study of mRNA-1647, Cytomegalovirus (CMV) vaccine, are fully enrolled, and the study is currently enrolling subjects into the fourth (300µg) dose cohort. The study is randomized, observer-blind and placebo-controlled.

In February Moderna announced positive data from an interim analysis of safety and immunogenicity from its Phase 1 study of mRNA-1653 in healthy adults. mRNA-1653 is designed to protect against human Metapneumovirus (hMPV) and Parainfluenza Virus Type 3 (PIV3), that cause respiratory illnesses. Moderna plans to advance mRNA-1653 into a Phase 1b study of pediatric subjects.

Moderna's follow-on Zika vaccine candidate, mRNA-1893, continues to progress toward an IND filing. There will be no further development of Moderna's first Zika candidate, mRNA-1325. The Biomedical Advanced Research and Development Authority remains committed to its grant of up to approximately $125 million for development.

In February Moderna and Merck submitted a new protocol to the FDA for a randomized Phase 2 study to assess whether post-operative adjuvant therapy with mRNA-4157, in combination with Merck's Keytruda, improves recurrence-free survival compared to Keytruda alone. The study will be conducted with patients that have had complete resection of cutaneous melanoma but remain at high risk of recurrence. Two abstracts will be presented at ASCO.

mRNA-2752 has finished dosing of the first cohort of patients in the Phase 1 study and begun dosing of a second cohort. mRNA-2752, also known as the Triplet, is an intratumoral injection comprising three mRNAs encoding for OX40L + IL23 + IL36 for the treatment of advanced or metastatic solid tumor malignancies or lymphoma. mRNA-2416, OX40L only, amendment filed for Phase 2 cohort, had 2 patients with some regression in ovarian cancer in Phase 1.

Moderna has selected a new development candidate for the rare inherited metabolic disease GSD1a. GSD1a results in a buildup of glycogen in tissues and an inability to regulate glucose, leading to life-threatening hypoglycemia and long-term liver and kidney damage. mRNA-3745 is an IV-administered mRNA encoding G6Pase enzyme, designed to restore deficient or defective intracellular enzyme activity.

An IND has been opened for a Phase 1 study of MEDI1191, encoding IL12, injected intratumorally in advanced or metastatic solid tumors with collaborator AstraZeneca. Will be studied as a monotherapy and in combination with a checkpoint inhibitor.

Moderna announced the publication of data from a Phase 1a/b study in Nature Communications showing the potential of mRNA encoding for VEGF-A (vascular endothelial growth factor A) as a regenerative therapeutic. The data supported advancement of AZD8601, which now is in an ongoing Phase 2a study led by AstraZeneca.

Dosing of the first Chikungunya Virus cohort has been completed in Moderna's Phase 1 study evaluating the safety and tolerability of escalating doses of mRNA-1944 via intravenous infusion in healthy adults.

(mRNA-3704): The FDA has granted Fast Track designation for mRNA-3704 for MMA (Methylmalonic Acidemia). Moderna now has an open IND and is preparing to begin a Phase 1/2 open-label, multi-center, multiple ascending dose study of mRNA-3704 in pediatric patients with isolated MMA due to MUT enzyme deficiency.

Cash ended the quarter at $1.55 billion, down sequentially from $1.69 billion. Cash used in operations was $144 million. Capital expense was $7 million.

Operating expense (GAAP) of $142 millon consisted of $131 million for R&D and $27 million for SG&A. Operating income was negative $142 million. $11 million interest income; $0.3 million other expense. Income tax benefit $0.0 million.

Q&A summary:

What specifically is Merck hoping to achieve with the new RSV formulation? What is the timeline? We are excited about 1172. It was qualitatively and quantitatively several order higher than 1777. Uses a Merck proprietary nanopartical and improved antigen. It takes 12 to 18 months for a Phase 1 trial of this type.

Chikungunya number of cohorts needed? Designed for 4. We are at the second dose level.

1172 v. 1777, could that happen with other indications? It is not expected to be the norm.

CMV development path? In Phase 1 we have two protein targets. There is a high unmet need. We are looking for internal transmission to babies in utero. We will discuss this much more with the FDA. A past FDA leader is on our team for the discussion of the development path.

Safety to date on cancer vaccines? Trial is in progress, we evaluated data as it comes in. It is in the second cohort. Tolerance is good so far. Locally secreted cytokines could get to a worrisome level, but we think the preclinical data is encouraging for mRNA for this.

While we have a lot of research underway, including with academic partners, we do not necessarilly take everything forward to the clinic.

The legacy liponanoparticle had some issues, we developed an improved one, and so did Merck. We share this sort of information with Merck.

GSD regulatory path? This disease is different, the unmet need is complex. At a two hour meeting a GSD patient needs a cup of cornstarch, not a cup of coffee. The constant treatment is an issue. We need to go from the biology in mouse models to the complexity of human disease.

Gene therapy v. mRNA therapy? Our focus is on dose dependent pharmacology. We focus a lot in metabolic diseases where the dose required varies over time. There is a gene therapy approach going after GSD1, we think they are differing tools, there is still a need for daily dose management.

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Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2019 William P. Meyers