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Yahoo Finance Presents: Moderna CEO Stéphane Bancel

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In this episode of Yahoo Finance Presents Moderna CEO Stéphane Bancel, talks to Yahoo Finance senior reporter Anjalee Khemlani about the company's new boosters for COVID-19 variant strands as well as the continued rollout of their vaccines.

Video Transcript


ANJALEE KHEMLANI: Joining me now is Stephane Bancel, CEO of Moderna. Stephane, thank you so much for joining me today.

STEPHANE BANCEL: Thank you so much for having us.

ANJALEE KHEMLANI: So great news, you have the booster shots that target specifically the B 1351 South Africa variant being submitted for clinical studies by the NIH. Let's talk a little bit about that. Clearly has been a pretty short amount of time going to the point that the company has said that tweaks are going to be pretty quick. This is just the first example of that. What are you expecting in terms of results?

STEPHANE BANCEL: So we are expecting that we should have very high efficacy and high neutralizing antibody. If you think about it, the power of mRNA is its genomics medicine. And so we literally copied the new sequence of South Africa virus and dropped it into the same casette, everything the same that we used for the authorized vaccine that we developed last year.

So I would expect the same very neutralizing antibody and the efficacy, which is why I think mRNA between the high efficacy, we are seeing compared to other technologies and the speed to deployment which we saw last year, which we are seeing again today on the variants, is going to be very powerful to chase this virus.

And the other piece, too, is the ability to combine mRNAs. We have already put in the clinic a vaccine against CMV, cytomegalovirus, which is moving to phase three. And that has six mRNA molecule in one dose. And so if the world, if a virus and the evolution process, if human mutation in the next few months are of concern, we will chase all of those. We can combine them as biology, ask us to do to keep a high efficacy vaccine, so we can protect via boosting Americans and people in the world.

ANJALEE KHEMLANI: And I know, of course, the production of that is going to be sort of the next hurdle. You had, looking at starting basically from scratch when you started to produce the original vaccine, in large part because the technology that you're using is so new. Whether it's raw material, like liquid nanoparticles, or just general vaccine production equipment.

The access to all that and the buildup of all that has been, of course, a very storied experience. Though you have partners like Lonza and Catalent to help with the process, you're looking at expanding right now. And we won't see that for the next year or so. So explain what that process is like and why it's such good news right now.

STEPHANE BANCEL: Yes, so basically, as you know, we have had a lot of orders from many governments around the world. And what is very clear in the last 30 to 60 days, there's a lot of concern out there by governments who want to make sure they stay ahead of a pandemic. As you know, the death toll, the economic impact, as we all know, has been horrific in the last 12 months. And this winter, you know, has been very, very hard, and still is very, very hard. We're still losing a lot of people every day.

And the world leaders are very worried that if there's a variant of concern, especially as you might see waning immunity over time, especially of the elderly, as we know, as we get old, humans, our immune system becomes weaker. So what is unknowable today is what will be the efficacy of any vaccine six months, 12 months from now if you are infected by a new strain that seems problematic, like the one first identified in South Africa.

And so what we want to do based on that feedback from the government, that they want more. Some already, like the European Union, has put an option for 150 million does for 2022 already. That was announced last week. And so when we look at the demand coming from the countries, we thought, geez, we believe that's 1.2 billion dose for next year was going to be plenty.

And we think we most probably were wrong last year, that it's not enough. Because, so what we didn't know last year, is that the different vaccine were going to have different efficacy. Our vaccine, as you know, has very high efficacy. So we are seeing much more demand than we could have anticipated, even in an optimistic scenario last year.

And so what we decided to do and we are announcing today is moving the capacity for 2022 to 1.4 billion dose. If you assume 100 microgram, the dose of a current authorized vaccine. But what we announced in our variant boost strategy, is we believe that we should have good efficacy of a boost at 50 microgram all over.

Why? Because if you've already got vaccinated, your immune system has been already educated. And so you are boosting it to get back those antibodies to a good level, to educate your immune system on the new antibodies you need on the new variants. And so we believe that those could be lower. We have, of course, to prove it in the clinic in the next few months.

But if that was the case that the boosts at 50 microgram, then the mix will play of how much output can you get out of a system. 1.4 billion at 100 microgram. If you push it to only being a boost company, that means, only boost just [INAUDIBLE], that gets you to close to 2.8 billion doses. And of course, if you can have only 50-50 scenario in term of doses output at the two dose level, that's another 2 billion capacity output for '22. So we think that it really positioning Moderna to grow from a very strong 2021 revenue projection to an even stronger next year.

ANJALEE KHEMLANI: Let's talk about that. The buildup, let's go back to the beginning when you had to start building up for the original strain and for the original doses last year. What was it that you initially experienced as hurdles that with the help of the federal government and through your partners you were able to overcome?

STEPHANE BANCEL: So the first challenge we had was just enough equipment for just capacity. Because to give you a reference, in 2019 we made less than 100,000 dose over year. Because as you mentioned, we are not a commercial company. We're a clinical development company. And so if you look at the number of what we shipped to the US government, which is now around 17 million doses in December, it means that we made those doses through 2020, exactly a 200x increase just in 12 months, which is remarkable.

And so we bought machines, we scaled up a process, mean bigger and bigger reactor, so we can more and more product per unit of time. We did that in a factory in Massachusetts. We did that in Lonza in New Hampshire, we did it in Lonza in Switzerland. And then we have to deal with filling. Because a filling capability, we have a plant is only for clinical trials.

Thousands of those at the time, not hundreds of millions. And so we partnered with Catalent, who's doing a remarkable job. We partnered with Rovi in Spain. We partnered with Recipharm in France. And we will add filling capacity as we keep building the drug substance of a vaccine capacity.

ANJALEE KHEMLANI: And what about the substance? I know there's been a lot about the fact that the lipids, you know it hasn't been as widespread use-wise to the point of just in clinical. But to be able to scale that up, is that something you're looking to bring in house or have the capacity to?

STEPHANE BANCEL: So it's a different technology than mRNA, because it's a small molecule, more like traditional pharmaceutical product. So this early PEI that we invented in our labs that is biodegradable, so it's a big competitive advantage for us. But we have been working with our partners right away. I think the challenge we had, our head of manufacturing, he used to be the head of manufacturing of Novartis worldwide. He had been with us three years before the pandemic hit, so known us and the process very well and so on.

And so what we did last year when I challenged Juan back in February to say, hey, how do we go to a billion does, I think what has happened Moderna a lot, as a new commercial company is, we aim for a big number of very early on in the race against the virus. And we say, OK, how do we get to a billion? And so that allowed us by thinking big from the get-go, to think really outside the box, but also to give guidance to our suppliers.

And so one way we also helped our lipid suppliers is, we purchased by paying upfront cash a lot of product. Because they, in their turn, had to go buy machines and hire people. And they were worried, because they say, look, if the product fails in the clinic, you might go bankrupt and not pay us. So these were the type of issues we had to deal with last year.

And the way we dealt with it is, we funded upfront the raw material of supply. And if you remember, we did a big capital raise. On May 18, we raise $1.3 billion. And if you look at the SEC document, the proceeds of that raise were to buy machine, buy materials, and hire people to make the COVID-19 vaccine that was at the time, a candidate. And so I think us being aggressive and us being able to afford to put our balance sheet at risk to help our suppliers in their turn, raise capacity, was very important I think.

ANJALEE KHEMLANI: And looking at the production, increasing that target for next year, not that but you have all of this in swing, what specifically is part of that expansion? What parts of it are the expansion that you're looking at that's going to help you get to that $1.4 billion?

STEPHANE BANCEL: So a bit of everything in the process, meaning we need making more mRNA mass. We need to do more formulation of lipid. And of course, more filling. So it's really the entire. When you add a big stream of capacity, like by 100 million at the time, basically you need to increase capacity everywhere, because you have bottlenecks everywhere.

ANJALEE KHEMLANI: So now looking forward, the company have had a validation, like others in the space really. It seems like this pandemic has been, as we've discussed, almost a bright spot for you being able to validate not just the technology, but also the company and look for your pipeline going forward. Have there been discussions, are you working simultaneously on this? Or does the COVID vaccine still take up a lot of the time and energy and resources?

STEPHANE BANCEL: No, actually, the piece that's very important about Moderna, is we have not slowed down the 20 plus other programs we have. We have very important medicines in cancer, cardiology, autoimmune disease, [INAUDIBLE] disease, and many more important first in class vaccines. Our CMV vaccines cytomegalovirus, number one cause of birth defects, is on its way to phase three this year.

Had a beautiful phase two neutralizing antibody data. It's a very complex product. There is no products on the market. And so we need to get these vaccines out there, because we need to protect women and the idea of bearing her child, because it's the number one cause of birth defect in this country.

ANJALEE KHEMLANI: Absolutely. Well, glad to hear it's all going well, and hopefully we'll have you back soon to discuss even more milestones. Stephane Bancel, CEO of Moderna, thank you so much for joining.

STEPHANE BANCEL: Thank you so much for having us.