Moderna, Inc. (MRNA) Q4 2022 Earnings Call Transcript

Moderna, Inc. (NASDAQ:MRNA) Q4 2022 Earnings Conference Call February 23, 2023 8:00 AM ET

Company Participants

Lavina Talukdar - Head, Investor Relations

Stephane Bancel - Chief Executive Officer

Stephen Hoge - President

Arpa Garay - Chief Commercial Officer

Jamey Mock - Chief Financial Officer

Conference Call Participants

Salveen Richter - Goldman Sachs

Gena Wang - Barclays

Matthew Harrison - Morgan Stanley

Edward Tenthoff - Piper Sandler

Michael Yee - Jefferies

Tyler Van Buren - Cowen

Jessica Fye - JPMorgan

Ellie Merle - UBS

Joseph Stringer - Needham

Operator

Good morning. My sanction is Kevin and invited to Moderna’s Fourth Quarter 2022 Earnings Call. [Operator Instructions] Please beryllium advised this telephone is being recorded. At this time, I’d for illustration to move nan telephone complete to Lavina Talukdar, Head of Investor Relations astatine Moderna. Please proceed.

Lavina Talukdar

Thank you, Kevin. Good morning, everyone and convey you for joining america connected today’s telephone to talk Moderna’s 4th fourth and afloat twelvemonth 2022 financial results and business update. You tin entree nan property merchandise issued this greeting arsenic good arsenic nan slides that we will beryllium reviewing by going to nan Investors conception of our website.

On today’s telephone are Stephane Bancel, our Chief Executive Officer; Stephen Hoge, our President; Arpa Garay, our Chief Commercial Officer; and Jamey Mock, our Chief Financial Officer.

Before we begin, please statement that this convention telephone will see forward-looking statements made pursuant to nan Safe Harbor provisions of nan Private Securities Litigation Reform Act of 1995. Please spot Slide 2 of nan accompanying position and our SEC filings for important consequence factors that could origin our existent capacity aliases results to disagree materially from those expressed aliases implied successful these forward-looking statements.

With that, I will now move nan telephone complete to Stephane.

Stephane Bancel

Thank you, Lavina. Good greeting aliases bully day everyone. Welcome to our Q4 2022 convention call. Today, I will commencement pinch a speedy business reappraisal of 2022. Stephen will past reappraisal our objective programs earlier Arpa gives an update connected our commercialized advancement and plans. Jamey will past coming our financial results and I will travel back to stock immoderate posts connected wherever we are heading.

We are pleased to study coming revenues of $19.3 cardinal for fiscal twelvemonth 2022, GAAP nett income of $8.4 billion, and GAAP diluted net per stock of $20.12, rate and finance balances of $18.2 cardinal astatine nan extremity of nan year. We continued our disciplined superior allocation policy, reinvesting first successful our company. In 2022, we invested $3.3 cardinal successful R&D, our highest level of R&D investments ever. We invested $1.1 cardinal successful SG&A and $400 cardinal successful superior investments. We made investments successful Metagenomi for entree to caller cistron editing enzymes and Carisma successful oncology. We announced an finance successful CytomX and nan acquisition of OriCiro successful Japan to proceed to streamline our manufacturing processes. And conscionable yesterday, we announced nan collaboration pinch LifeEdit. $3.3 cardinal was returned to shareholders done a buyback of 23 cardinal shares.

I americium proud of nan beardown results by our squad successful 2022 arsenic we made history pinch a number of outstanding accomplishments for patients. In respiratory vaccines, we developed caller products pinch singular speed, getting nan mRNA-1273.214 against Omicron BA.1, nan strain recommended by WHO and mRNA-1273.222 against Omicron BA.5, nan strain asked by nan U.S. FDA. We developed 1273.222 successful little than 2 months. We are capable to protect millions of group from perchance terrible illness resulting from caller COVID strains.

Our RSV vaccine went from Phase 1 commencement to Phase 3 information successful 24 months and met its superior efficacy endpoint successful nan Phase 3 trial. In oncology, our personalized crab vaccine was nan first objection of affirmative results from an mRNA crab curen successful nan randomized objective trial. In uncommon diseases, our propionic acidemia programme showed early affirmative objective results successful a repetition dose chronic illness mounting successful reducing metabolic decompensation events successful patients. And we announced what we dream will go nan first effective inhaled mRNA therapy successful humans arsenic our partner, Vertex, entered a Phase 1 proceedings utilizing our exertion successful nan therapy for cystic fibrosis patients who lacks nan CFTR protein.

Finally, we had our first ESG Day and published our first ESG report, providing further transparency successful really we behaviour our business. I want to return a infinitesimal this greeting to touch connected modulation nan Moderna Executive Committee. As we announced successful precocious 2022, Marcello Damiani decided to discontinue arsenic Chief Digital Officer aft much than 7 years pinch nan company. Marcello joined Moderna earlier our first objective proceedings and we are coming a digital-first company, arsenic a large testament of his expertise to standard integer resources. I americium grateful to Marcello for his publication during nan early years of Moderna.

I americium excited to person worked already pinch Brad Miller since early January. Brad brings a wealthiness of endeavor solution and level statement acquisition successful respective of nan apical exertion companies. This will beryllium instrumental arsenic Moderna scales into a fully-integrated biotechnology company. I want to besides stock pinch you that Juan Andres, presently President of Strategic Partnership and Enterprise Expansion has informed maine of his determination to discontinue and will beryllium retiring astatine nan extremity of May. Juan has played a tremendous domiciled since joining Moderna successful 2017 from Novartis, wherever he led each manufacturing for them. Juan served arsenic Moderna’s Chief Technology, Operations and Quality Officer wherever he led our manufacturing from an early-stage objective improvement institution to a commercialized company. I judge Juan did a historical occupation pinch his squad successful 2020 and 2021 to standard Moderna for world commercialized motorboat during nan pandemic.

It is virtually unbelievable that he led nan squad from having made crossed our full portfolio, little than 100,000 doses successful 2019 to much than 800 cardinal doses successful 2021, each during nan pandemic. We and hundreds of millions of group crossed nan globe who received nan Moderna COVID-19 vaccine beryllium Juan our gratitude. I judge very fewer manufacturing leaders would person led specified an achievement. Most recently, Juan has focused connected building retired our statement to support Moderna’s increasing pipeline, starring our efforts successful producing of personalized crab vaccine. Jerh, who utilized to activity for Juan astatine Novartis, has joined america since early autumn and has been starring manufacturing since then. I americium thankful for Juan who has ensured a very soft transition, helping Jerh each measurement of nan way. Upon his status astatine nan extremity of May, Juan’s work will modulation to Stephen Hoge, President of Moderna, to merge PCV crossed each functions, pinch Jerh starring nan manufacturing of PCV for aggregate Phase 3s, and of course, for getting commercialized ready. On behalf of nan full Moderna team, I want to convey Juan for his continued activity and wish him and his wife, Marina, nan champion of a well-deserved retirement. I americium profoundly thankful to person counted him for truthful galore years arsenic a partner astatine Moderna, and much importantly, for much than 20 years arsenic a friend and a mentor. We will miss him.

The institution continues to grow astatine a accelerated pace. We now person 3 commercialized COVID-19 vaccine products. We person 4 improvement programs successful Phase 3. We person to grow our commercialized portfolio very soon. Overall, we person 48 programs underway pinch a squad of 3,900 squad members and now coming connected nan crushed successful 16 commercialized subsidiaries crossed Americas, Europe and Asia-Pacific. Our $18 cardinal of rate equilibrium astatine nan extremity of nan twelvemonth is enabling america to standard crossed research, objective development, manufacturing, commercialized and G&A.

With that, fto maine inquire connected to Stephen.

Stephen Hoge

Thank you, Stephane. Good greeting aliases bully afternoon, everyone. Today, I will reappraisal our advancement against our cardinal objective programs. I will commencement pinch our respiratory vaccines. We person approved our Phase 3 improvement programs against nan large 3 respiratory viruses, COVID-19, RSV and influenza. I will stock immoderate further information connected these successful a moment, including immoderate presented this greeting connected our older big RSV Phase 3 trial. We are besides advancing a portfolio of next-generation programs against these viruses, including mRNA-1283, which is simply a next-generation COVID-19 booster that is referred to arsenic alternatively stable. We besides person aggregate next-generation flu programs. We activity to summation nan breadth of sum against influenza by adding further antigens that are not coming successful currently-available flu vaccines.

Lastly, our respiratory portfolio includes a ample number of operation vaccines to supply protection against aggregate respiratory pathogens which has advantages for galore stakeholders, including healthcare providers, payers and consumers. These see combinations of COVID, flu and RSV arsenic good arsenic 2 pediatric vaccines that see further viruses that are important successful children, including hMPV and PIV3.

As we hole for endemic COVID successful 2023 and beyond, we wanted to concisely recap nan caller VRBPAC committee discussions and recommendations. At nan January VRBPAC meeting, nan committee voted to harmonize nan superior bid and booster dose vaccines, which is an important measurement to simplify early guidance. The FDA besides indicated that it expects to convene VRBPAC to find vaccine strain creation for nan ‘23/24 play successful nan 2nd 4th of this year. We judge that our mRNA level has demonstrated its expertise to present version lucifer vaccines connected accelerated clip horizons and we judge we are truthful good positioned to present immoderate creation update nan FDA and different nationalist wellness agencies recommend.

And moving to RSV, arsenic you know, we shared nan apical statement results from our Phase 3 RSV study successful older adults earlier this year. And today, we shared further information that was presented this greeting astatine RSVVW. The apical statement results we person seen are incredibly encouraging and we are grateful to nan FDA for breakthrough therapy nickname for mRNA-1345, which further emphasizes nan important wellness effect of RSV successful older adults and nan precocious unmet need. In nan apical statement information presented successful January, nan mRNA-1345 demonstrated 83.7% vaccine efficacy and nan superior endpoint of little respiratory tract illness pinch 2 aliases much symptoms. 1345 was recovered to beryllium mostly good tolerated and location were nary information concerns identified by nan Data and Safety Monitoring Board.

In nan information presented coming astatine RSVVW, we confirmed that 1345 was good tolerated and has an acceptable information profile. Solicited adverse reactions were mostly Grade 1 aliases Grade 2 and to-date astir solicited adverse reactions were mild to moderate, pinch nan astir communal adverse reactions being injection tract pain, headaches, myalgia and arthralgia. Vaccine efficacy was consistently precocious crossed each property groups and successful participants pinch pre-existing comorbidities that are astatine highest risk.

Please mention to nan technological and aesculapian meetings conception of nan Moderna Investor Relations website to spot nan afloat RSVVW presentation. And we are very encouraged by these information and look guardant to record a Biologics License Application pinch nan FDA successful nan first half of 2023 arsenic things proceed. With nan action of utilizing a privilege reappraisal voucher, we mightiness spot regulatory action connected this filing successful precocious 2023 aliases early 2024.

Now moving to flu. Last week, we shared pinch you information from our Phase 3 immunogenicity and information study successful nan Southern Hemisphere, study P301. In this study, our first-generation vaccine, mRNA-1010 demonstrated superiority connected zero conversion rates for influenza A H3 and H1 and superiority connected geometric mean titers for H3 and non-inferiority connected geometric mean titers for H1. mRNA-1010 did not meet non-inferiority connected zero conversion aliases titers for nan 2 influenza B strains.

Our abstracted Phase 3 efficacy study successful nan Northern Hemisphere, study P302, has now accrued complete 200 confirmed cases of influenza-like illness, almost each of which are influenza A, which is expected – this was expected arsenic nan overwhelming mostly of influenza load successful older adults is caused by influenza A, including complete 95% of hospitalization successful nan astir caller season. Now based connected nan lawsuit accrual successful P302, we now expect nan independent DSMB will reappraisal nan first interim study of efficacy successful that study successful nan first 4th of this year.

Now, let’s return a look astatine our latent vaccines connected Slide 14. Our CMV vaccine is successful an ongoing Phase 3 study and we person begun dosing participants successful nan Phase I/II teen dose-ranging study. Our EBV vaccine to forestall infectious mononucleosis is successful Phase 1, while our EBV vaccine to forestall semipermanent sequelae of EBV is successful pre-clinical development. We person 2 HIV Phase 1 tests ongoing and our HSV vaccine is successful preclinical.

And finally, our VZV programme has begun dosing successful participants successful a Phase 1/2 study, which I will talk further connected nan adjacent slide. The VZV study is simply a Phase 1/2 randomized information and immunogenicity study evaluating mRNA-1468 against Shingrix. This is simply a comparatively ample study, enrolling 500 zero antagonistic older adults successful aggregate doses and dosing intervals and a 12-month study follow-up. Over 35% of participants will beryllium 70 years and older, which is successful statement pinch nan largest illness load of shingles.

Now, let’s return a look astatine our therapeutics portfolio connected Slide 16 and I will item a fewer of nan programs. We person precocious reported beardown apical statement information for our personalized crab vaccine, which I will talk to successful a moment. In immunooncology, we are moving to reside illness load beyond PCV pinch our checkpoint and triplet programs, some of which are successful Phase 1 tests successful various tumor types. In uncommon diseases, our Phase 1/2 PA programme continues to enroll patients and we are looking guardant to selecting a dose of nan description arm. I will supply a little update connected that successful conscionable a moment. Earlier this year, our partner, Vertex, announced initiation of a Phase 1 proceedings successful cystic fibrosis patients, which is our first inhaled pulmonary mRNA therapeutic program. And successful cardiovascular, we announced Relaxin has initiated dosing successful nan Phase 1 study. Both of these study initiations correspond important milestones for Moderna arsenic we grow our modalities successful therapeutic areas.

Now successful December, we shared breathtaking apical statement information from our Phase 2 personalized crab vaccine program, testing nan operation of PCV and KEYTRUDA against KEYTRUDA unsocial successful nan mounting of adjuvant melanoma. KEYTRUDA is nan modular of attraction successful that setting. In this study, we showed nan summation of our personalized crab vaccine curen mRNA-4157 to KEYTRUDA reduced nan consequence of recurrence aliases decease by 44% compared to KEYTRUDA alone. This was nan first objection of efficacy for an investigational mRNA crab curen successful a randomized objective proceedings and we are pleased to denote that 4157 has received breakthrough therapy nickname from nan FDA. Along pinch our partner, Merck, we are excited astir these results and expect to motorboat aggregate late-stage confirmatory studies for PCV successful 2023, starting pinch melanoma and past moving to non-small compartment lung cancer. We are readying to research further indications for 4157, wherever we judge location is simply a beardown biologic rationale for immune-stimulating approaches. These see early-stage and metastatic settings and will see indications wherever KEYTRUDA is not yet approved. Finally, we expect to merchandise afloat information from our Phase 2 study astatine an oncology gathering this outpouring and successful an upcoming publication.

Now moving to PA, since our update pinch our – astatine our R&D Day, nan PA Paramount study has made bully progress. Our 4th cohort is now afloat enrolled and we are presently enrolling patients successful our 5th cohort which doses astatine 0.9 milligrams per kilogram each 2 weeks. We are encouraged that to-date we person not observed immoderate dose-limiting toxicities. And we are besides encouraged that each patients and families person opted to proceed curen electively successful our open-label hold study crossed each anterior dose cohorts. Now, nan adjacent measurement successful this proceedings will beryllium to reappraisal disposable information and find a dose for description .

I will now manus nan telephone complete to Arpa Garay who will supply an update connected our commercialized activities. Arpa?

Arpa Garay

Thank you, Stephen and bully time to everyone. I will commencement pinch a reappraisal of income connected Slide 20. In nan 4th quarter, full merchandise income were $4.9 billion. In nan U.S., our income were $1 billion, income successful Europe approximated $2.2 billion, and income successful nan remainder of nan world were $1.6 billion. We ended nan afloat twelvemonth strong, pinch full merchandise income for 2022 of $18.4 billion. Sales successful nan U.S. for nan afloat twelvemonth were $4.4 million, income successful Europe were $6.7 million, and successful nan remainder of nan world were $7.3 billion. We are reiterating astir $5 cardinal successful COVID income for transportation successful 2023 from our currently-signed precocious acquisition agreements and deferrals. And we do expect further income from cardinal markets specified arsenic nan U.S., EU and Japan.

Slide 21 summarizes nan existent creation of income for 2023. We person precocious acquisition agreements from Canada, Kuwait, Switzerland, Taiwan and nan United Kingdom. We expect these income to beryllium recognized upon transportation of vaccines successful nan 2nd half of 2023. Additionally, we expect further income from deferrals from 2022 contracts. These deferrals are from nan countries listed connected nan descent and are expected to beryllium chiefly recognized from deliveries successful nan first half of 2023. Together, these precocious acquisition agreements and deferrals totaled astir $5 cardinal successful income for 2023.

We do expect further income from cardinal markets, including nan United States, EU and Japan, arsenic good arsenic Australia and different countries successful Asia and Latin America. In nan U.S., contracting discussions pinch commercialized customers are ongoing and we will supply visibility into expected U.S. income astatine a early day aft we complete these discussions. In our discussions pinch commercialized customers successful nan U.S., it is clear to america that our customers admit that COVID is still a important wellness burden. Throughout 2022, COVID continued to beryllium a starring origin of hospitalizations and deaths.

If you look to nan floor plan connected nan near manus side, what you will spot present is information disposable done September of 2022 COVID was nan 3rd starring origin of decease successful nan United States only aft bosom illness and cancer. And if you look to this right-hand side, [Technical Difficulty] 4 months for nan autumn and wintertime play from October 1, 2022, [Technical Difficulty] 2023, hospitalizations from COVID successful nan U.S. are astir 450,000, much than double from flu and astir 3x higher than RSV successful that aforesaid 4-month period. There continues to beryllium a clear request to protect against terrible COVID infections and our customers admit that. Given this need, we estimate nan U.S. autumn 2023 COVID marketplace measurement to beryllium astir 100 cardinal doses. We guidelines this presumption aft looking astatine 2022 vaccination rates and including imaginable proposal for two-dose booster bid for precocious consequence individuals. Taken together, nan doses administered correspond astir 30% of nan U.S. population. A fewer factors that tin effect this measurement see viral evolution, regulatory recommendations arsenic good arsenic vaccine knowing and uptake by consumers. Moderna’s commercialized statement is prepared for nan modulation to a commercialized marketplace successful nan U.S.

Let maine now return you done really we person been preparing to spell to market. First and foremost, we are committed to access, which I will explicate successful greater item successful conscionable a moment. To guarantee sum of our vaccine, we are engaged successful discussions pinch backstage customers arsenic good arsenic nationalist entities specified arsenic nan VA, CDC and nan Department of Defense. We are expanding consciousness and educating consumers arsenic good arsenic healthcare providers astir nan benefits of booster vaccinations successful alignment pinch nationalist wellness agencies specified arsenic CDC and ACIP. We are reaching healthcare providers and consumers done innovative integer outreach programs. We person built nan infrastructure needed to fulfill customer orders and shipments and our commercialized and aesculapian organizations person been scaling to execute connected this scheme and we are fresh for nan modulation to a commercialized marketplace successful nan United States.

Very importantly, arsenic we participate nan commercialized shape of nan endemic COVID market, we want to stress our committedness to vaccines entree for everyone successful nan United States sloppy of their expertise to pay. For each insured individuals successful nan United States, accordant pinch preventative wellness services requirements, existent reimbursement rules will beryllium sustained. As an ACIP-recommended vaccine, Moderna’s COVID vaccine will proceed to beryllium disposable for zero out-of-pocket costs for individuals pinch insurance. And we are proud to opportunity that for uninsured aliases underinsured group successful nan United States, Moderna will beryllium launching a diligent assistance programme that will supply COVID-19 vaccines astatine nary cost.

Let maine now summarize our COVID vaccine outlook. In 2023, we expect COVID income of astir $5 billion. In addition, we are expecting income from U.S. commercialized marketplace orders, EU, Japan and different countries. We will supply visibility into these income aft we complete ongoing discussions pinch governments and pinch customers. We tin admit COVID continues to beryllium a load to healthcare systems and this continues to beryllium an important constituent arsenic we talk nan worth of booster vaccinations pinch our customers. In nan U.S., we expect commercialized marketplace volumes to beryllium astir 100 cardinal doses successful 2023 and Moderna’s commercialized statement is prepared for nan modulation to a commercialized endemic market. Last but not least, we are committed to diligent entree successful nan United States.

I now want to move to different motorboat successful nan respiratory vaccine abstraction that nan commercialized squad is preparing for, our RSV vaccine successful 2024. As you heard from some Stephane and Stephen earlier, we are very pleased by our Phase 3 RSV vaccine results. Stephen’s statement will beryllium filing for nan support soon and we expect we possibly approved successful precocious 2023 aliases early 2024. With nan imaginable support accelerated approaching, I americium very excited for nan RSV vaccine motorboat and I want to supply further colour into nan motorboat plans.

The RSV motorboat will leverage nan existing commercialized infrastructure that is already successful spot for COVID and we will proceed to put to support it ensuring beardown execution. Both COVID and RSV markets overlap considerably arsenic we look astatine our target customers arsenic good arsenic imaginable target patients and audiences and we will leverage this overlap betwixt nan 2 markets. We will guarantee consciousness of RSV illness and nan associated economical load of RSV successful older adults crossed cardinal stakeholders specified arsenic healthcare providers and payers. Upon support of our RSV vaccine, we will amended consumers connected cardinal attributes of our vaccine. These planned activities will beryllium initiated successful 2023 and successful afloat unit upon approval. We person nan added use of an in-place commercialized infrastructure built for COVID. Many of these resources tin beryllium leveraged for flu arsenic good into nan future.

I look guardant to keeping you updated connected our advancement passim this year. And pinch that, I will move it complete to Jamey.

Jamey Mock

Thanks, Arpa and hullo everyone. This morning, I will screen our 2022 financial capacity and supply a model for our 2023 financial outlook.

Moving to our 4th fourth results, starting connected Slide 29, full merchandise income decreased by 30% year-over-year to $4.9 billion. The alteration successful 2022 was chiefly driven by little income measurement compared to wide higher request successful nan anterior year. Cost of income was 39% of merchandise income compared to 14% of merchandise income successful 2021. The cardinal driver of nan summation successful costs of income arsenic a percent of merchandise income was a catch-up royalty costs to nan National Institute of Health, aliases NIH, of $400 million, representing 8% of merchandise income successful nan 4th quarter.

In December 2022, we entered into a non-exclusive patent licence statement pinch nan National Institute of Allergy and Infectious Diseases and institute aliases halfway of nan NIH to licence definite patent authorities concerning stabilizing prefusion coronavirus spike proteins and nan resulting stabilized proteins for utilizing COVID-19 vaccine products aliases 2P technology. Pursuant to nan agreement, we person agreed to salary debased single-digit royalties connected early nett income of our COVID-19 vaccines.

Our costs of income besides includes a complaint of $297 cardinal for inventory write-downs related to excess and obsolete COVID-19 products and disbursal for unutilized manufacturing capacity, and CMO wind-down costs and related charges of $376 million, and a nonaccomplishment connected patient acquisition commitments and related cancellation fees of $281 million. These charges different than royalties are driven by costs associated pinch surplus accumulation capacity, wide little request and a displacement to our astir caller Omicron BA.4/5 targeting COVID-19 bivalent booster.

Research and improvement expenses were $1.2 billion, which accrued by 87% versus anterior year. The summation successful R&D walk continues to beryllium driven by our objective proceedings expenses, peculiarly pinch our Phase 3 studies for RSV, seasonal flu and CMV. The summation successful R&D was besides driven by nan acquisition of a Priority Review Voucher and an summation successful personnel-related costs owed to accrued headcount.

Selling, wide and administrative expenses were $375 million, besides reflecting an summation of 87% year-over-year. The maturation successful spending was chiefly driven by continued investments successful unit and extracurricular services successful support of our marketed products and institution build-out. The effective taxation complaint was 11% compared to 10% past year. After-tax nett income decreased by 70% to $1.5 billion. Diluted net per stock successful Q4 decreased by 68% to $3.61.

Now turning to our afloat twelvemonth 2022 financial results connected Slide 30. Total merchandise income for nan afloat twelvemonth 2022 were $18.4 billion, an summation of 4% year-over-year. The maturation was chiefly attributable to customer operation and a higher mean trading value successful 2022 successful definite markets. Cost of income was 29% of merchandise income compared to 15% of merchandise income past year. The summation was driven by higher write-downs for excess and obsolete inventory related to our COVID-19 vaccines, unutilized manufacturing capacity and losses related to early acquisition commitments for earthy materials. The cardinal drivers for these charges are akin to nan drivers successful Q4. Costs associated pinch surplus accumulation capacity, wide little request for nan year, successful peculiar from low-income countries, and accelerated merchandise beforehand displacement from our original vaccine to Omicron targeting COVID-19 bivalent boosters. The previously-mentioned catch-up royalty costs NIH of $400 cardinal is besides a driver of nan summation year-over-year.

The effective taxation complaint was 13% compared to 8% past year. As a reminder, we had a nett operating nonaccomplishment carry-forward of $2.3 cardinal astatine nan extremity of 2020, which resulted successful a non-recurring use to nan reported taxation complaint successful 2021. After-tax nett income of $8.4 cardinal decreased 31% versus anterior year. The alteration of nett income was chiefly owed to higher costs of sales, higher different operating expenses and a higher effective taxation rate. Diluted EPS decreased 29% to $20.12.

Now turning to rate and rate deposits connected Slide 31. We ended 2022 pinch rate and investments of $18.2 billion, compared to $17 cardinal astatine nan extremity of nan 3rd quarter. The summation was driven by our commercialized activity. Cash deposits for early merchandise proviso reduced from $3.8 cardinal astatine nan extremity of nan 3rd 4th to $2.6 cardinal by nan extremity of nan year.

Now turning to Slide 32. I wanted to springiness an update connected nan advancement we person made connected our superior allocation priorities. Our apical finance privilege has been and will proceed to beryllium reinvesting successful our guidelines business crossed aggregate areas. Research and improvement spending accrued 65% year-over-year from $2 cardinal successful 2021 to $3.3 cardinal successful 2022, and we are projecting an further summation to astir $4.5 cardinal successful 2023. The objective information from our PCV, RSV and flu tests were encouraging and further validates nan imaginable of our mRNA technology. We are besides investing successful our integer capabilities, nan commercialized build-out of nan statement arsenic good arsenic expanding our manufacturing footprint. We scheme to importantly accelerate our superior expenditures successful 2023 arsenic we grow some our world and U.S. manufacturing footprint.

Our 2nd finance privilege is to spot charismatic outer investments and collaboration opportunities that will alteration and complement our platform. We’ve precocious announced respective caller transactions, and I’m happy to study that we person successfully closed our acquisition of our OriCiro Genomics successful nan first 4th of 2023. OriCiro is simply a awesome illustration of nan companies we are valuating to alteration our mRNA platform. It will create important worth from some nan velocity and costs viewpoint and effect our pre-clinical, objective and commercialized pipeline for years to come.

Our collaboration pinch LifeEdit, which we announced yesterday, is different illustration for an charismatic outer finance opportunity. We judge nan operation of Moderna’s mRNA level pinch LifeEdit proprietary cistron editing technologies, including guidelines editing capabilities, has nan opportunity to beforehand perchance life transformative aliases curative therapies for immoderate of nan astir challenging familial diseases. We are successful aggregate progressive discussions regarding further outer collaboration opportunities, and we will beryllium disciplined successful our approach. After evaluating soul and outer finance opportunities, we past measure further uses of cash. In 2022, we repurchased 23 cardinal shares for $3.3 cardinal astatine an mean value of $143 per share. and we person $2.8 cardinal of stock repurchase authorization remaining.

Now, let’s move to our 2023 financial model connected Slide 33. As Arpa mentioned earlier, we presently person COVID vaccine income of $5 cardinal contracted for transportation successful 2023. Also, we are actively moving connected preparing for nan backstage marketplace and authorities contracts successful nan U.S. and further contracts for Europe, Japan and different cardinal markets. To thief you pinch your modeling purposes, we expect first half ‘23 income to beryllium astir $2 billion. Our full costs of income includes nan costs of equipment manufactured, third-party royalties, arsenic good arsenic logistics and warehousing costs.

We expect afloat twelvemonth 2023 reported costs of income to beryllium 35% to 40% of sales. This includes royalties successful astir 5% of sales, which are payable to UPenn and CellScript for modified chemistry licenses, and to NIAID and NIH for nan 2P licence that I mentioned earlier. The summation successful costs of income arsenic a percent of merchandise income compared to 2022 is chiefly driven by position operation alteration arsenic we move from a pandemic to endemic setting, pinch single-dose exertion importantly expanding successful volume. Longer term, arsenic nan endemic marketplace normalizes and we adhd further respiratory and different products, we expect our costs of income arsenic a percent of income will importantly alteration rates we’re experiencing successful 2023.

For R&D and SG&A, we expect afloat twelvemonth expenses to beryllium astir $6 billion, pinch astir $4.5 cardinal successful R&D. The summation is driven by our maturing improvement portfolio and nan world standard up of our company. We expect a negligible proviso for income taxation successful 2023. And finally, we expect superior expenditures of astir $1 billion. The summation is chiefly owed to investments successful expanding our manufacturing footprint.

This concludes my remarks concerning our financial performance, and I will move nan telephone backmost complete to Stephane.

Stephane Bancel

Thank you, Jamey, Arpa and Stephen. Let maine now stock immoderate thoughts astir wherever we’re heading. I’m really excited to spot our mRNA level and nan investments we person made successful subject complete nan past 11 years starring to specified a promising pipeline. We expect a number of important developments.

Let maine commencement pinch our first franchise, respiratory vaccines. In COVID boosters, we are moving for nan move to U.S. commercialized market, and we expect being capable to quickly meet nan afloat 2023 marketplace needs for updated vaccines aft VRBPAC and nan FDA make this transaction successful nan outpouring of 2023. We scheme to taxable RSV vaccine for regulatory support successful nan first half of 2023, and arsenic you heard from Arpa, we will beryllium fresh to motorboat nan RSV vaccine successful precocious ‘23 aliases early ‘24.

In flu vaccine, for Northern Hemisphere, mRNA-1010 Phase 3 trial, nan Data and Safety Monitoring Board is expected to complete its interim efficacy study successful nan first 4th of 2023 of 2nd franchise latent microorganism vaccine. It’s progressing very good pinch a wide spectrum of programs. In our ample CMV Phase 3 study, we look to complete nan enrollment. For EBV, HIV and VZV programs, our adjacent milestone will beryllium Phase 1 data.

Turning to Slide 37, fto maine reappraisal nan milestone for mRNA therapeutics programs. For personalized crab treatment, we expect to commencement our Phase 3 study successful business pinch Merck successful adjuvant melanoma, and we expect to quickly grow to further tumor types, including non-small compartment lung cancer. Full Phase 2 information will beryllium presented astatine an upcoming oncology gathering and published successful a top-quality aesculapian journel.

In PA, we scheme to prime those and statesman nan description limb of our Phase 1/2 study. MMA, we will person Phase 1/2 data. The adjacent milestone for bosom nonaccomplishment supplier by Relaxin will beryllium Phase 1 information successful patients. And successful Inhaled therapeutics, our partner Vertex expects to complete its azygous ascending dose study and initiate a aggregate ascending dose study.

To proceed to build nan champion type of Moderna, we person established 7 priorities for 2023. Priority number one, execute nan operational and income scheme for COVID booster for autumn of ‘23. Priority number two, build an unrivaled seasonal respiratory vaccine franchise. Priority number three, execute a bold run of crab vaccine studies. Priority number four, beforehand uncommon metabolic illness programs. Priority number five, thrust accelerated advancement and maturation of our latent vaccine portfolio. Priority number six, present nan next-generation pipeline and platform. As we said before, this is conscionable nan beginning. And Priority number seven, build a civilization of perpetual learning and fortify our processes and integer strategy arsenic we want to standard nan institution to different level.

On Slide 39, immoderate cardinal dates for 2023 Moderna Investor Days. April 11 will beryllium our Annual Vaccines Day. September 13 will beryllium Annual R&D Day, wherever we will coming improvement pipeline cardinal updates. And December 7 will beryllium our 2nd ESG Day. Now that we person delivered connected nan committedness of mRNA subject pinch our first merchandise launch, our ngo has evolved. Our ngo is to present nan top imaginable effect to group for mRNA medicine. We are passionate astir our expertise to person a profound effect connected humanity. We judge we person a exertion to destruct aliases greatly trim quality suffering caused by respiratory viruses, latent viruses, galore cancers, regenerative diseases and a increasing database of different diseases. We judge we tin person an effect connected illness treatment, pinch our therapeutic first and past pinch our cistron editing programs. This is conscionable nan beginning.

With that, nan squad and I are free to now return your questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] First mobility comes from Salveen Richter pinch Goldman Sachs. Your statement is open.

Salveen Richter

Good morning, convey you for taking my questions. Could you speak to nan regulatory strategy for flu, fixed nan miss connected nan B strains for immunogenicity? And if you are assured into nan interim efficacy analysis, fixed nan abominating prevalence of [indiscernible]?

Stephen Hoge

I’ll return that. Thanks, Salveen for nan question. Look, I deliberation nan honorable reply is we’re still having incomplete accusation to supply guidance connected nan regulatory strategy. At this point, we are looking to nan efficacy results from nan P302 study that I described, which will guideline america connected that filing strategy. It’s important to statement that efficacy, eventual objection of non-inferior efficacy against an approved vaccine was ever going to beryllium required for afloat approval, and that nan only point that you could do pinch immunogenicity would beryllium an accelerated support way pinch an responsibility to subsequently show efficacy. And truthful correct now, we are really very encouraged that nan information that we’ve seen from our immunogenicity and information study, which is moving nan Southern Hemisphere, P301, shows superiority connected 3 retired of 4 endpoints for nan influenza A strains, which thrust nan overwhelming mostly of disease, and nan organization of liking present are older adults, and relationship for complete 99% of nan cases successful our efficacy study. And truthful that first interim efficacy study that we’re conducting now successful P302 will germinate complete 200 cases and 99% of them are influenza A, and it will beryllium our first chance to really spot nan capacity of nan vaccine successful position of prevention of influenza-like unwellness from flu A. That is nan first interim analysis. And truthful it’s rather possible, arsenic you would expect successful immoderate efficacy study, and we’ve each sewage immoderate acquisition now pinch these respiratory efficacy studies, that we whitethorn extremity up – request to spell to a 2nd consequent interim study and accrue moreover much cases to show either non-inferiority aliases superiority successful that study. And truthful what we will do is we will hold for nan results from nan DSMB, nan independent DSMB, and gauge from that. Based connected those results, obviously, if we do spot efficacy, that is nan golden modular for proceeding pinch regulatory filing and afloat approval. If we do not yet meet that threshold, past we will beryllium looking guardant to consequent interim analyses successful that study.

Salveen Richter

Great. Thank you.

Operator

[Operator Instructions] Our adjacent mobility comes from Gena Wang pinch Barclays. Your statement is open.

Gena Wang

Thank you. Just quickly travel Salveen’s question. Do you request to show superiority successful bid to person support regarding nan efficacy study? And past quickly connected nan revenue. Did I perceive correctly nan existing statement of $5 cardinal chiefly will beryllium successful nan 2nd half ‘23? If that’s nan case, is it adjacent to opportunity that full COVID gross successful 2023 should beryllium astir $7 billion? And past regarding nan $2 cardinal successful nan first half ‘23, really overmuch will beryllium from nan U.S. market, i.e., retired of estimated 100 cardinal doses successful nan U.S., what could beryllium your marketplace share?

Stephen Hoge

I’ll return nan first question. Thank you, Gena for that. So first connected superiority. You do not request to show superiority to get a flu vaccine approved. That’s good precedented. Non-inferior efficacy is nan threshold. Our goal, though, complete clip is perfectly to create a superior influenza vaccine. And truthful if we don’t spot it pinch nan first-generation product, which is mRNA-1010, I would statement that we person 4 different programs – flu programs successful development, different stages of objective trials, that are looking to do moreover amended than possibly flu mRNA-1010. And our extremity complete clip would beryllium to show that we person a superior influenza vaccine. But it is not really required for approval. Non-inferiority should suffice. I’ll move it complete to Arpa, I think, for nan different questions?

Arpa Garay

Sure. Yes, I tin return nan 2nd question. In position of nan full sales, we are anticipating astir $2 cardinal of nan $5 cardinal successful nan first half of nan year, and nary of that $2 cardinal is coming from nan U.S. market. The remaining beforehand acquisition agreements that we person of $3 cardinal will beryllium coming successful nan 2nd half of this year. Now, that $5 cardinal is conscionable nan full that we person from precocious acquisition agreements arsenic good arsenic deferrals from 2022. We do expect further income from nan U.S., Japan, EU and different markets, and we judge nan mostly of these income will beryllium successful nan 2nd half of 2023.

Gena Wang

And past your marketplace stock regarding nan U.S. market?

Arpa Garay

We proceed to judge successful nan strong, differentiated floor plan of our products. We do not person immoderate updates connected marketplace stock projections arsenic we are presently successful discussions pinch customers correct now for autumn 2023 contracting.

Gena Wang

Thank you.

Operator

[Operator Instructions] Next mobility comes from Matthew Harrison pinch Morgan Stanley. Your statement is open.

Matthew Harrison

Great. Good morning, acknowledgment for taking nan question. I was hoping to inquire astir nan regulatory strategy for PCV, and specifically, really you’re reasoning astir nan imaginable for filing disconnected nan Phase 2 information set, arsenic good arsenic really you’re reasoning astir nan clip lines for enrollment successful nan Phase 3 programme and really that whitethorn effect nan clip statement for perchance filing disconnected nan Phase 2 information set? Thanks.

Stephen Hoge

Great. Thank you, Matt for nan question. So we’re evidently really pleased yesterday to denote that we received FDA breakthrough nickname therapy for nan PCV program. And what that allows america to do is very quickly accelerate our conversations pinch nan FDA and different regulators connected nan way guardant for filing 4157. As you noted, nan Phase 2b study that we’ve tally is simply a randomized study compared against, really, nan modular of attraction pinch KEYTRUDA alone, and has already shown a rather important use of 44% simplification of nan complaint of recurrence and – aliases death. And that study is ongoing, and truthful we’re continuing to travel complete clip and behaviour further interim analyses. And it’s imaginable that those – successful fact, we would dream that those information mature and proceed to get stronger and stronger. And truthful it is wholly imaginable that successful our discussions nether breakthrough pinch nan FDA and others that we will travel up pinch a way guardant for opening nan filing process based connected that Phase 2 and perchance proceeding pinch accelerated approval.

Now arsenic you know, successful this country, and I deliberation it’s wherever your mobility is coming from, arsenic good globally, if location is simply a way guardant there. We haven’t yet engaged pinch nan FDA connected because nan breakthrough happened yesterday. But if location is simply a way guardant there, it would require america to quickly enroll a confirmatory Phase 3 study. And successful fact, location is much and much attraction connected possibly requiring that those Phase 3 studies beryllium enrolled anterior to an accelerated approval. And truthful for that reason, ourselves and Merck are moving really quickly now to effort and guidelines up that confirmatory Phase 3 melanoma study and enroll arsenic accelerated arsenic possible. Now we’re not fresh yet to guideline connected really quickly that will be, but we are afloat alert of nan truth that successful fact, if location is simply a way guardant for accelerated approval, nan enrollment of that Phase 3 whitethorn beryllium gaining, and therefore, we want to person it enrolled arsenic quickly arsenic possible.

So astatine this point, we’ve conscionable received nan breakthrough designation, we’re engaging pinch regulators, and we’re going to effort and create that way forward. But it is theoretically imaginable that location is an accelerated support way and that we would request to enroll that Phase 3 study based connected caller regulatory guidance, much mostly to nan industry. And moving difficult to make judge that we tin do that arsenic accelerated arsenic imaginable here, while continuing to behaviour nan further interim analyses and spot nan maturity of this information proceed to proceed, and hopefully, nan spot of nan use provided by nan operation to beryllium further validated.

Operator

Thank you. [Operator Instructions] Our adjacent mobility comes from Edward Tenthoff pinch Piper Sandler. Your statement is open.

Edward Tenthoff

Great. Thank you very much. And acknowledgment for each nan item connected nan telephone today. My question, I had to spell backmost to flu for a infinitesimal and conscionable pinch respect to nan follow-on candidates, including I deliberation nan 1 that’s pentavalent hemagglutinin and past fixed hemagglutinin and past besides into nan neuraminidase, nan candidates astatine that neuraminidase, what should beryllium our anticipation some successful times of timing for information here? And really do you yet spot your seasonal flu merchandise offering benignant of evolving? Thanks.

Stephen Hoge

Thanks for nan question, Ed. So fto maine commencement pinch nan astir precocious program, obviously, is our 1010 program, which we’ve talked about. And we person done an update to that vaccine that we deliberation will summation nan B immunogenicity for those populations for whom that matters, and we expect to beforehand that successful objective study rather quickly. That, successful operation pinch nan efficacy information that we were conscionable talking astir pinch P302, astir apt is nan astir important accusation for guiding our adjacent measurement connected nan second-generation products. Our aggregate – sorry, penta and hexavalent vaccines arsenic good arsenic nan 1020, 1030 programs, which see neuraminidase, arsenic you said, are each successful various Phase 1 studies. And arsenic we person shown many times hopefully complete nan past mates of years, we tin proceed very quickly successful nan consequent Phase 3 successful pivotal studies erstwhile we prime 1 of those candidates to move forward. But nan really important gating accusation is knowing really is our first procreation merchandise performing successful position of efficacy arsenic a first mRNA flu vaccine. And truthful we are waiting for that accusation earlier proceeding forward. But we do expect that astatine slightest one, if not multiple, of these second-generation products would move into consequent pivotal studies, Phase 3 studies. And successful those cases, because we would beryllium looking to show immoderate shape of superiority either against a broader scope of influenza strains aliases amended protection against influenza-like unwellness because we person included further antigens, we would expect those studies to see some immunogenicity and information and efficacy extremity points arsenic we move forward. And truthful we will make a action connected which ones we mightiness move guardant based connected nan ongoing interim study of efficacy from our 1010 program. We don’t person different measurement to update astatine this constituent connected which we will move forward.

Edward Tenthoff

Great. Thank you very much.

Operator

[Operator Instructions] The adjacent mobility comes from Michael Yee pinch Jefferies. Your statement is open.

Michael Yee

Hi. Thanks. Good morning. A mates of follow-up connected nan flu vaccines and besides a PCV mobility for Stephen. I conjecture could you explain – do you person a presumption astir why these strains were not non-inferior and what nan ramifications are for that, either for this flu vaccine, but besides for nan infection study, and what that would mean for combinations? So first of all, conscionable to explain what’s going connected location pinch nan B strain, nan ramifications for flu vaccine? And past my 2nd mobility is connected PCV. Obviously, we are excited astir nan adjuvant data. There is besides a competitor reference retired successful metastatic melanoma this summer, truthful I wanted to understand really we should comparison and opposition that and if you could locomotion america done really to deliberation astir metastatic and what competitors mightiness show? Thank you.

Stephen Hoge

Thank you, Michael for some questions. So, first connected nan flu, connected nan B, we are still looking into nan data, and we are going to create a much complete image of what we deliberation happened successful nan influenza B immunogenicity study. I would statement a mates of things that are important. The first is these are progressive comparator studies. And truthful erstwhile you look astatine non-inferiority connected zero conversion aliases titers, it’s important to statement that we are going astatine nan standard-dose influenza vaccine progressive comparator. And betwixt nan Phase 2 study and nan Phase 3 Southern Hemisphere study, location were changes successful nan creation of those progressive comparators and nan comparator use, and truthful that tin thrust immoderate difference. The 2nd point I would statement is that they were different populations, and truthful we went from a Northern Hemisphere to a Southern Hemisphere. And obviously, that tin thrust immoderate differences successful inheritance history of influenza illnesses. But nan 3rd and possibly possibly astir applicable is we did expect that nan influenza B neutralizing titers were lower. As you remember, we shared pinch nan Phase 2 information astir a twelvemonth ago. We did person little neutralizing HAI titers for nan influenza B strain. And for our older big influenza vaccine, we thought that was acceptable because astatine nan extremity of nan day, our extremity was only to execute non-inferiority, not to show superiority. Whereas for nan influenza A strains, we really wanted to maximize those neutralizing titers and imaginable for use because influenza A really is what drives nan unwellness successful older adults, which is our first procreation product. So, we did attraction heavy connected nan influenza A. We were aiming astatine non-inferiority connected nan influenza B. And arsenic you said, we did not make non-inferiority connected those, and we will proceed to propulsion isolated nan logic arsenic to why. But we person already identified an update that would let america to amended immunogenicity against nan Bs to nan grade that that is important going forward, not conscionable successful younger populations but possibly from an wide regulatory perspective. And truthful we person made that update, we are really going to beryllium evaluating that successful nan objective study very soon here. And we expect that we will beryllium capable to reside that little immunogenicity that we saw connected nan Bs rather quickly. But arsenic I said a infinitesimal ago, what really matters is efficacy and efficacy against influenza disease. And successful this case, we really do spot that arsenic influenza A related for our first-generation product. But we will evidently beryllium updating influenza B strain for different consequent procreation of products. And it’s important to statement that that’s really important arsenic you get into pediatric populations wherever influenza B is simply a load of disease, peculiarly successful nan young. Now, connected nan mobility of PCV, we are beautiful encouraged by nan adjuvant melanoma data. We do person immoderate early metastatic data, arsenic you will statement from our anterior Phase 1 studies. And successful nan Phase 2, location was immoderate shape 4 illness arsenic good successful that study. We did not behaviour it only successful first-line metastatic, and truthful we are really looking guardant to knowing nan capacity of a competitory merchandise successful that abstraction because it whitethorn really place an opportunity for america to move into earlier stages of treatment. Now, for now, our attack has been to attraction connected places wherever checkpoint, including KEYTRUDA, our modular of attraction and person demonstrated a really beardown signal, which is why you spot america expanding from adjuvant melanoma into adjuvant non-small cell, and ultimately, will spell first into different adjuvant indications wherever we really deliberation location is nan astir contiguous biologic use aliases biologic rationale for imaginable use that we will beryllium looking to demonstrate. But obviously, arsenic others commencement to move into nan space, if they show benefits successful different lines of therapy, we will perfectly want to proceed very quickly successful those directions arsenic well. So, we are looking guardant to those results, and we will evidently launching them arsenic everyone other will.

Operator

Thank you. [Operator Instructions] Next mobility comes from Tyler Van Buren pinch Cowen. Your statement is open.

Tyler Van Buren

Hey guys. Good morning. Thanks very overmuch for taking nan question. For RSV, a fewer years from now, do you expect it to beryllium a 2-player, 3-player aliases possibly a 4-player marketplace erstwhile including J&J? And really do you judge that nan tolerability floor plan compared to others based connected nan afloat information presented this morning?

Stephen Hoge

Sure. I tin possibly – I will return nan first information of that question. At this point, location are evidently 3 companies that person wrote retired their Phase 3 pivotal efficacy studies and are proceeding correct now to filing. I deliberation – I don’t person a circumstantial position connected J&J, possibly Arpa tin connection perspectives connected that, but it is an adenovector microorganism [ph] program, and different still unclear astir their regulatory way forward. Now connected nan mobility of reactogenicity and tolerability profile, arsenic we presented coming aliases arsenic our collaborator presented coming astatine RSVVW, we do see, we deliberation a favorable tolerability profile. Grade 3 adverse reactions, whether section aliases systemic, were each beneath 2% for immoderate of nan individual symptoms. And really compared comparatively favorably pinch a placebo successful that arm, often possibly 1.5x arsenic predominant arsenic what we are seeing successful placebo, which we deliberation is simply a compelling wide reactogenicity profile. We past deliberation nan different parts of nan use of nan merchandise are evidently efficacy. We are incredibly pleased. If you look astatine nan astir communal meaning of cases, aliases RSV, little respiratory tract illness involving 2 symptoms, which has been comparatively accordant crossed nan different products. We person seen precocious efficacy 83%, which I really deliberation is among nan best. And arsenic we presented today, that efficacy really holds up beautifully arsenic you look astatine older populations, those complete nan property of 70, arsenic good arsenic those pinch higher comorbidities. Those would thrust nan mostly of nan disbursal associated pinch caring for patients, older adults pinch respiratory illness from RSV. So, overall, it’s very difficult, obviously, to do cross-trial comparisons. And ultimately, it will autumn for nationalist wellness officials to make those decisions, but we are really encouraged by some nan efficacy and tolerability floor plan of 1345, and look guardant to filing and yet to nan commercialization of that product. Arpa, would you for illustration to adhd thing successful position of your cognition of nan marketplace going forward?

Arpa Garay

Sure. So, I would opportunity we do expect it being astatine slightest nan 3-player marketplace pinch Moderna, Pfizer and GSK. There is simply a anticipation of a 4-player marketplace if J&J has a regulatory way guardant pinch their adenovector microorganism vaccine. Nothing much to adhd there.

Operator

Thank you. [Operator Instructions] Our adjacent mobility comes from Jessica Fye pinch JPMorgan. Your statement is open.

Jessica Fye

Great. Good morning. Thanks for taking nan question. Following up connected flu aliases mRNA-1010, conscionable to beryllium very clear, if you deed connected non-inferiority successful nan efficacy Northern Hemisphere study, do you deliberation that mRNA-1010 would beryllium approvable successful spite of missing connected non-inferiority connected nan B strains? And related to that, would you envision nan support only being for older adults? And connected RSV, tin you remark connected nan anticipation for dosing wave for your RSV vaccine? And really do you deliberation astir nan worth and imaginable pricing of that vaccine, possibly benchmarking disconnected of different vaccines for that property group? Thank you.

Stephen Hoge

Yes. Thanks for those questions. So, fto maine return nan flu worldly first. So again, nan afloat support of modular is simply a head-to-head efficacy study. And truthful if we show non-inferior efficacy against an approved vaccine successful nan organization which we are studying and which successful this lawsuit successful P302 is 50-plus adults. We do judge that could shape nan ground of an approval. At nan extremity of nan day, immunogenicity results, and successful particular, are only surrogates for efficacy, and ultimately, efficacy is nan golden standard. That’s what’s required for accepted approval, and that’s why we are moving nan P302 study. So, it will dangle upon really a speech pinch regulators astir that information package, but it is surely plausible. And successful fact, 1 mightiness opportunity apt that if we meet efficacy successful nan efficacy study that that would beryllium capable to move guardant for a afloat approval. It doesn’t mean that location whitethorn not beryllium questions astir demonstrating non-inferior immunogenicity pinch influenza B strains aliases different things successful consequent studies, but we do judge location is simply a anticipation there. But astatine nan extremity of nan day, it will beryllium limited upon information and discussions pinch regulators, including nan FDA. And truthful we will hold until we person that information and person those conversations, but I deliberation it’s surely a possibility. Now, arsenic it relates to property for approval, we are presently studying mRNA-1010 only successful older adults. And truthful arsenic I person said, nan P301 was successful 18-plus, P302 is successful 50-plus, and that’s really wherever we spot nan broadest recommendations for seasonal influenza vaccine and wherever we person been astir focused initially connected building retired our respiratory portfolio. We will measure our influenza vaccine, successful fact, galore of our respiratory vaccines successful younger populations complete time. But we will person to do property de-escalation, dose uncovering and past span down from an immunogenicity perspective, very overmuch for illustration what we did pinch COVID. And truthful our first filings for approval, if they proceed based connected data, would beryllium successful adults and older adults principally. And past eventually, we would follow-on pinch pediatric populations. And arsenic I said a infinitesimal agone successful consequence to Michael’s question, that whitethorn impact utilizing updated B antigens to summation immunogenicity successful that population. But again, that’s consequent studies that we would do successful children. Could you punctual maine of nan 2nd question?

Jessica Fye

For RSV, what are you reasoning for dosing wave and really do you deliberation astir worth and imaginable pricing of that vaccine, possibly benchmarking disconnected of different vaccines for that property group?

Stephen Hoge

Sure. So, I will fto Arpa return nan 2nd portion of that question. First connected frequency, it is not yet clear connected really often group will request an RSV vaccine. It’s a seasonal virus, a seasonal pandemic of illness that shows up. Most of america person been exposed to RSV each complete a twelve times complete nan people of our life. And what really happens from a biology position is arsenic we get older, our expertise to support precocious neutralizing titers to protect america goes down, and what we person is breakthrough illness and ultimately, a illness leads to important costs and morbidity and moreover immoderate mortality successful older adults. We do not – we person not yet had approved vaccines, and truthful what we don’t yet cognize is what’s nan wave of vaccination, is it going to beryllium seasonal each year, aliases is it going to beryllium little than seasonal each mates aliases fewer years. But what’s beautiful clear, based – from my perspective, based connected nan epidemiology of RSV infection, is that we do spot RSV reasonably regularly arsenic adults, and unfortunately, complete time, it breaks done much frequently, and truthful location astir apt will request to beryllium repeated boosting to protect against RSV. At nan extremity of nan day, nan first recommendations will travel from ACIP arsenic good arsenic from regulators astir that frequency, and we will person to defer to them connected really they want to administer and rotation retired nan RSV vaccines, whether they want to travel a flu model, which would beryllium yearly to make judge that we get nan broadest magnitude of protection, aliases that they want to initially rotation retired RSV vaccines and past travel complete clip for nan durability of that efficacy. At this point, nary of us, nary of nan 3 products that person publication retired successful Phase 3 person a clear reply connected nan durability of that efficacy, though we would expect it to wane arsenic it does against earthy RSV infection complete clip successful those results. Arpa, do you want to return nan adjacent portion of nan question?

Arpa Garay

Sure. Yes. I tin return nan mobility connected pricing. So overall, from a pricing accuracy perspective, Moderna is committed to pricing that reflects nan worth of our vaccines. In position of what they present to patients, to societies and nan healthcare systems, while besides ensuring afloat entree for patients sloppy of their expertise to pay. So, pinch that broader rule astir pricing, we will beryllium looking astatine nan afloat recommendations that travel retired of ACIP arsenic we get nan filing and nan ACIP recommendations to look astatine what nan afloat worth that could beryllium provided backmost is based connected things, arsenic Stephen mentioned, astir dosing frequency, and their pricing will beryllium based connected some worth and access. I americium not capable to stock immoderate further specifications connected what benignant of scope that pricing mightiness autumn into, but it will beryllium accordant pinch our wide pricing philosophy.

Operator

Thank you. [Operator Instructions] Our adjacent mobility comes from Ellie Merle pinch UBS. Your statement is open.

Ellie Merle

Hey guys. Thanks truthful overmuch for taking nan question. Just different connected flu, conscionable – immoderate much specifications connected nan titer level specifically that you saw aliases erstwhile we will get much specifications connected nan titer levels? And past really should we deliberation astir nan value of having titers supra that 40 benchmark versus demonstrating non-inferiority. Like I conjecture what is nan comparator vaccine titers successful your Phase 3, did very good and were good supra 40? How should we deliberation astir nan implications then, say, you are astatine 30 aliases adjacent 40, what that would mean from a regulatory standpoint arsenic good arsenic a commercialized standpoint successful interpreting nan immunogenicity idea? Thanks.

Stephen Hoge

All very bully questions and I deliberation nan short reply is we are looking into that information correct now. And we will supply an update I americium not precisely judge erstwhile we will person that, but we do person nan Vaccines Day Investor Meeting coming up successful April of nan outpouring and past obviously, we will beryllium looking to people that information and stock arsenic it comes successful and is it available. You person highlighted 1 of nan cardinal challenges successful progressive comparator studies successful influenza successful particular, which is that you tin spot precocious titers, but really because you are looking astatine a ratio, opportunity for immoderate reason, your progressive comparator does really good against 1 of nan strains, that tin effect your expertise to non-inferiority statistically. And astatine nan extremity of nan day, nan situation is moreover much analyzable arsenic you look astatine older adults where, for instance, nan influenza B strains are not a large driver of efficacy aliases disease. And truthful we will look astatine each of that arsenic will regulators. I would statement that it is good precedented. In fact, galore of nan presently approved influenza vaccines have, successful nan past, missed connected non-inferiority for – and influenza B strain extremity constituent present aliases location and still person received afloat support aliases accelerated approvals. And nan logic for that is, arsenic we person said benignant throughout, that astatine nan extremity of nan day, influenza B is not a superior driver of interest and it is known to beryllium among nan different strains of influenza successful nan microorganism successful nan vaccines of little import for illness successful older adults. In fact, 1 of nan 4 strains, location person been progressive statement astir nan B/Yamagata strain arsenic to whether aliases not it’s gone extinct, and moreover should beryllium removed from quadrivalent vaccines successful galore of nan caller WHO and different debates. And truthful influenza B is simply a well-trodden way for galore of these vaccines arsenic good arsenic now for mRNA-1010, wherever location is differential performance, and ultimately, location is precedent for moving guardant wherever you do not technically request non-inferiority connected immunity your income [ph] conversion endpoints and still moving guardant because of nan little interest astir that illness successful older adults. So, we will look astatine that data. We will create our strategy. We will evidently prosecute pinch regulators pinch that data, and yet find a way forward. The astir important point for us, though, successful nan adjacent position continuing pinch nan efficacy study trying to found whether aliases not we person non-inferior aliases moreover superior efficacy for mRNA-1010 successful its existent shape against influenza A, which is really wherever we deliberation payers and nationalist wellness officials will person nan astir attraction because it is prevention of that disease, not nan immunogenicity endpoint, prevention of influenza-like illness, hospitalizations, that is nan superior nonsubjective of nan vaccine and that’s wherever we are focusing our attraction correct now.

Ellie Merle

Great. Thanks for nan color.

Operator

[Operator Instructions] Our adjacent mobility comes from Joseph Stringer pinch Needham. Your statement is open.

Joseph Stringer

Hi. Good morning. Thanks for taking my questions. Two from us, nan first 1 connected 4157-KEYTRUDA combo program. Just curious, if you could springiness america a small spot much colour connected really we should deliberation astir nan cadence of nan further proceedings starts? Is it thing that will beryllium a much stepwise and measured approach, aliases should we expect benignant of a afloat unit benignant of aggregate proceedings starts approach? And past secondly, connected uncommon disease, extracurricular of your MMA, GSD and PA program, what is nan adjacent uncommon illness programme that we tin expect to participate nan clinic? Thank you.

Stephen Hoge

Thank you for those questions. So, connected 4157, I deliberation I will conscionable reiterate our anterior guidance, I don’t want to grow it, to opportunity that we are trying to move into those pivotal studies, they are Phase 3 confirmatory studies for melanoma and non-small compartment lung cancer, some adjuvant settings, this year. And we – you tin look astatine nan history of Merck and their expertise to execute those studies, enroll rather quickly and now moving together pinch us, we dream to beryllium capable to astatine slightest do that well. And we will look to enroll those astatine slightest arsenic quickly arsenic different confirmatory Phase 3 studies and akin populations person been tally generally. But I don’t deliberation we are going to supply much circumstantial guidance connected enrollment clip sky isolated from to opportunity we want to spell arsenic accelerated arsenic possible. I will besides clarify, excessively that from an accelerated support perspective, if that pathway were to go disposable based connected nan existent Phase 2 data, which again is taxable to early conversations pinch regulators, that we would want to person started those confirmatory studies. We wouldn’t person needed to complete enrollment, but definitely, we want to beryllium demonstrating that we are moving guardant successful those confirmatory studies arsenic quickly arsenic possible. And truthful we person double impetus. We are moving accelerated successful enrolling them successful nan near-term. Now, successful nan uncommon illness space, programs moving retired of pre-clinical and clinical. The first I would opportunity is we do person a objective programme for MMA, which you referenced, but that MMA programme is different spot wherever we expect to spot further information pursuing on, hopefully, nan continued beardown capacity of nan propionic acidemia PA program. And past successful nan pre-clinical improvement space, we person programs against OTC and PKU, truthful Phenylketonuria and a urea rhythm upset OTC, and those are some programs that we would dream to move into objective testing successful short order. We haven’t specifically guided connected nan timing of that yet.

Joseph Stringer

Many acknowledgment for taking our questions.

Operator

Ladies and gentlemen, this does reason nan question-and-answer information of today’s call. I would for illustration to move nan telephone backmost complete to Stephane for immoderate closing remarks.

Stephane Bancel

Thank you very overmuch everybody for joining america and for nan galore thoughtful questions. We look guardant to hosting you for Vaccine Day connected April 11. It will beryllium unrecorded successful Boston, for those of you who tin subordinate us, and besides of people virtual. Have a awesome day. Thank you.

Operator

Ladies and gentlemen, this does reason today’s presentation. You whitethorn now disconnect and person a awesome day.