Good morning, everyone, and welcome to Moderna's second quarter 2020 conference call to discuss financial results and business update. You can access the press release issued this morning as well as the slides that we'll be reviewing by going to the Investors section of our website.

On today's call are Stephane Bancel, our Chief Executive Officer; Tal Zaks, our Chief Medical Officer; Stephen Hoge, our President; and David Meline, our Chief Financial Officer.

Before we begin, please note that this conference call will include forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see slide 2 of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to update or revise the information provided on this call as a result of new information or future results or developments.

I will now turn the call over to Stephane.

Stephane Bancel - Chief Executive Officer

Thank you, Lavina.

Good morning or good afternoon, everyone. I hope all of you are in good health and remain safe. Thank you for joining our Q2 business update.

We are committed to building mRNA as a new class of medicines with Moderna positioned to remain the leader in this space. As you know, we believe our mRNA medicines have a potential to address large unmet medical needs and to treat diseases that are not addressable by recombinant protein or small molecules. Due to the platform nature of mRNA, we believe our mRNA medicines provide a higher probability of technical success to commercial launch and faster timelines to clinical trials and to the market relative to traditional medicines. We also believe that the manufacturing capital intensity of mRNA is materially lower than recombinant proteins and cost of manufacturing at commercial scale should be similar to small molecule injectables.

Let me start by summarizing the key achievement of the Company in Q2 on slide 4. mRNA-1273, our COVID-19 vaccine candidate saw the start of its Phase II, and the team focused on the Phase III design and preparation for a July start. We signed a strategic long-term partnership with Lonza to have significant manufacturing capacity to make mRNA and formulate it at large industrial scale to complement our Massachusetts manufacturing site capacity in the context of the pandemic. We started the technology transfer to Lonza in Q2. We raised $1.3 billion on May 18, and as communicated in our S-3, this capital was raised to enable us to scale up at risk our manufacturing capacity in anticipation of a potential approval for mRNA-1273. We started investing the proceeds for additional capital equipment at the Massachusetts plant as well as the Lonza plants in New Hampshire and in Switzerland, ordering raw materials at large scale and hiring additional personnel to make mRNA-1273.

In April, we finalized and announced an award from BARDA for up to $483 million for clinical development costs for mRNA-1273. An additional award was also announced last week for up to $472 million given the increased size of the Phase III to 30,000 participants. The total world is now up to $955 million.

In a very difficult environment during this spring, given the many lockdowns across the US due to COVID-19 outbreaks, our clinical team was able to continue to operate on most of our clinical trials on schedule, and we remain on track to provide in Q3 the Phase II interim data for our CMV vaccine candidate, mRNA-1647. The team continues to work relentlessly to start the Phase III study for CMV in 2021. We continue to believe that our CMV vaccine candidate's annual peak sales could be $2 billion to $5 billion. And like [Phonetic] mRNA-1273, our COVID vaccine candidate, we own the global commercial rights of mRNA-1647, our CMV vaccine candidate.

Q2 marked a new growth phase for our Company as we started to build and hire our commercial team. This is a historic moment for those of us who have worked at the Company for many years since it was a breakthrough research enterprise working with small animal models, and now we are building commercial. In Q2, the team started discussions with several countries around the world about potential supply agreements for mRNA-1273. We saw our first deferred revenues booked in Q2 on the balance sheet for $75 million of cash receipts from deposits for first potential supply of mRNA-1273. As of July 27, we have received approximately $400 million of cash deposits.

For today's call, we will cover three main topics. First, Tal will review and update you on our clinical programs and share some new clinical data on our CMV and Zika vaccine candidates. Then Stephen and I will share with you our value framework for vaccine COVID-19 candidate and [Indecipherable] bring value during the pandemic. Finally, David will take you through the second quarter financials.

Let me now turn the call to Tal.

Tal Zaks - Chief Medical Officer

Thank you, Stephane, and good morning, everyone.

Let me start with our prophylactic vaccines portfolio. A quick overview of the programs is on slide 7. mRNA-1273, our vaccine against COVID-19 has made very significant progress. The interim results of the Phase I trial has now been published in the New England Journal of Medicine. The Phase II trial was fully enrolled, and importantly, we recently started the Phase III trial of 30,000 volunteers in the US.

Our CMV Phase II dose confirmation study remains on track for interim data in the third quarter this year and the Phase III trial is expected to begin in next year. The Phase I trial for Zika is fully enrolled, and I'll share some data from the 100 microgram and 250 microgram dose cohorts shortly, while we are preparing for Phase II. Our Phase Ib age de-escalation study with our combination hMPV/PIV 3 vaccine remains on pause with enrollment suspended due to COVID-19 disruptions. And finally, the Phase I study with mRNA-1172 against RSV led by our partner Merck is ongoing.

So new additional data from our CMV and Zika Phase I programs. For CMV, this includes 12 months immunogenicity data from dose cohorts 30 microgram, 90 microgram and 180 microgram and safety data from the 300 microgram dose cohort. For Zika, we have disclosed data from the 10 microgram and 30 microgram cohorts, and today I'll show you the safety and immunogenicity data for the 100 microgram and 250 microgram dose groups.

So starting with CMV. On slide 9, you will see a table of the solicited adverse events after the third and final vaccination in the highest dose we tested, 300 microgram. The safety and reactogenicity data from this dose is displayed side by side with the other lower dose cohorts from the trial. At the 300 microgram dose level, solicited adverse event reactions showed a trend towards increases with the higher dose and were higher in seropositive. This is consistent with what we've seen in the other doses as we moved from 30 microgram to 90 microgram and 180 micrograms. The most commonly reported adverse events were pain at the injection site, headache, fatigue, myalgia and chills for seronegative participants, with fever and arthralgia as more common adverse events in seropositives. Importantly, at the 300 microgram dose, there continues to be no related serious adverse events reported and no unexpected safety findings.

Moving to the 12 month immunogenicity data for the full 30 microgram, 90 microgram and 180 microgram dose cohorts in the Phase I CMV trial. We're happy to report that six months after the last vaccination with mRNA-1647, we have durable neutralizing antibody responses out to the 12 months time frame.

Slide 10 shows the data in the same format we reported previously. At the top part of the table you see the geometric mean neutralizing antibody titers against epithelial cell infections or the pentomere [Phonetic] at the 12 months mark as well as the fold increases above the seropositive benchmark of 5,917. At the 90 microgram and 180 microgram doses, the fold increase in geometric mean titers above that seropositive benchmark were 3.6 and 3.9 fold higher respectively.

In the bottom of half of the table figures for the geometric mean antibody titers against fibroblast infection or the gD antigen for the same doses can be seen, and the geometric mean titers against fibroblast cells in the 90 microgram and 180 microgram were 0.7 and 0.9 fold for [Phonetic] a seropositive benchmark level of 1,449.

On slide 11 is the graphical representation of the geometric mean antibody titers against epithelial cell infection relative to the seropositive benchmark, geometric mean titer. And this scale is a log scale. You can see the seronegative participants by the solid lines and the increase in neutralizing antibody titers for each of the doses after each vaccination. The 90 microgram and 180 microgram does are shown in solid blue and orange, and they are well above the benchmark seropositive level of the 12-month mark. This is six months after the last vaccination, so the persistence of neutralizing antibodies is encouraging. Seropositives are represented by the dash lines. These participants enter the trial with neutralizing antibodies, as you can see from the start, and they also saw their neutralizing antibody levels further increase with each vaccination, remaining above the geometric mean titer for neutralizing antibody levels to the 12 months mark.

CMV is an important unmet need and we are encouraged and excited by these 12 months data. We're currently running the Phase II dose confirmation study where we're testing a narrow range of doses at the 50 microgram, 100 microgram and 150 microgram. 252 seronegative and seropositive adults have been enrolled, and we remain on track for an interim readout in the third quarter of this year. We continue to plan for the Phase III trial in 2021, pending further regulatory interactions and feedback. The primary endpoint as we have previously reported is anticipated to be prevention of primary infection in seronegative women of childbearing age and we expect to include less than 8,000 participants in the US and Europe.

Let me now move to mRNA-1893, our vaccine against the Zika virus where we've seen additional data at the 100 microgram and 250 microgram dose levels. Both of these dose levels were generally well tolerated with a trend towards more observations of local erythema and swelling at the injection site with the higher dose levels and after the second vaccination. Consistent with what we've seen across our vaccine platform, there was a trend of more solicited systemic adverse events noted with 250 microgram dose levels, particularly after the second dose. There were no related serious adverse events. You can see some of the 30 microgram data have been updated from our Vaccine Day presentation back in April.

In terms of the immunogenicity response, both the 100 microgram and 250 microgram dose level induced a strong neutralizing antibody response in both seropositive and seronegative participants. The table on the left-hand side focuses on the seronegative participants and the data for the 10 microgram and 30 microgram cohorts that have been previously shared. All seronegative participants in the 100 microgram dose cohort seroconverted after the second vaccination similar to that seen with the lower 30-microgram dose cohort but now with higher geometric mean titers, as depicted graphically on the bottom. We did not see any further increase at the 250 microgram relative to the 100 microgram dose.

Now, on this page you can see the data for participants with preexisting flavivirus immunity or the seropositives for mRNA-1893 was still able to mount a Zika specific neutralizing antibody response. Here, the first vaccination is comparable to a booster response and the response was similar between all dose levels, although of course I would note that these are very small numbers. We are reviewing the data and will make the dose selection decisions in preparation for the Phase II, and this program continues to be supported by BARDA.

So let me quickly review at a high level the data generated to date with mRNA-1273, our vaccine against COVID-19. The Phase I clinical data published in the New England Journal show that 100% of the participants vaccinated generated neutralizing antibodies and the geometric mean titer level at day 43 were 4.1 fold higher than those seen in convalescent sera from three representative COVID-19 patients. As published recently in the New England Journal of Medicine, in the nonhuman primate, vaccination with a two dose regimen of mRNA-1273 led to rapid protection against infection in both the lungs and nose of the animals. Finally, a pre-print from a mouse challenge model has showed consistent protection in the lungs and noses of those animals as well, and this morning we are happy to hear that Nature published this study and is available online today.

So we've been able to show protection against viral replication in every species we've tested so far, and the levels of neutralizing antibodies, the correlate of this protection, are roughly similar to those we achieved in humans in Phase I. So we look forward to the data readouts expected in the coming months, which will include the older and elderly cohorts in the Phase I, the safety and immunogenicity data from the Phase II and the potential for interim safety and efficacy analysis from the Phase III COVID trial.

Let me now quickly review our other clinical programs. In the systemic secreted and cell surface therapeutics, I'm happy to report that the additional two cohorts in the Phase I trial for mRNA-1944 have recently completed enrollment. As a reminder, in this program, the mRNA-1944 encodes for an IgG antibody against the chikungunya virus. The two additional cohorts are testing an IV infusion of mRNA-1944 at the high dose of 0.6 mg/kg with steroid premedication as well as two doses of 0.3 mg/kg without steroid premedication given a week apart.

The randomized Phase II trial of our personalized cancer vaccine in combination with KEYTRUDA versus KEYTRUDA alone which is partnered with Merck is ongoing and we have also made progress with the intratumoral immunooncology programs. Our OX40 ligand program has expanded into a Phase II dose expansion study in combination with durvalumab in patients with ovarian cancer and is actively recruiting patients. The Phase I program with our triplet of OX40L/IL-23/IL-36 gamma is ongoing and data were recently presented at ASCO. You can find a link for the data at the bottom of the slide.

Within our systemic intracellular therapeutics modality, both MMA and PA studies remain on pause due to COVID-19 disruptions.

Finally, our partner led programs, including the mutant KRAS vaccine with Merck in IL-12 and VEGF with AstraZeneca are continuing.

Slide 10 is a snapshot of our development pipeline, with mRNA-1273 in Phase III and CMV in preparation for Phase III start in 2021. We have four trials now in Phase II and two preparing for Phase II and 10 development candidates in Phase I with a further nine in preclinical studies.

So, with such a broad development pipeline, we anticipate many readouts and next steps in the near term and they're listed on slide 19. These include, as I mentioned, the Phase I results from the older and elderly age cohorts Phase II and interim analysis for Phase III for mRNA-1273, the Phase II results from CMV in the third quarter and the complete Phase I data from the additional cohorts from our antibody against the chikungunya virus.

With that, let me turn the call over to Stephen.

Stephen Hoge - President

Thank you, Tal.

I'd like to start our discussion on mRNA-1273 value. By - on slide 21, just recapping the scale of the loss that we've all been facing. It is remarkable that this pandemic has harmed millions of people already, and our hearts go out to those who've lost loved ones or have been made sick themselves. Given the scale and devastation, it is hard to believe that just seven months ago, none of us had ever heard of SARS CoV-2 or COVID-19. Globally, now over 18 million people have had confirmed infections with the virus and almost 700,000 have died. In the US, that looks like 4.7 million confirmed cases and 150,000 deaths. And the estimates are that by year-end in the US alone, there could be up to 400,000 deaths in this country.

What we're learning about the virus almost every day is that it may have a number of long-term sequelae beyond the short-term impacts of the disease. So beyond the pulmonary infection, pneumonia, acute respiratory distress syndrome and pulmonary embolism that we see, there have been increasing reports of other coagulation disorders, cardiac injury and long-term sequela as well as disturbing reports of potential long-term neurologic complications and potential inflammatory symptoms in children. Clearly, we're learning more and more every day about the terrible devastation of this virus and it's absolutely imperative that we and others advance a vaccine to try and blunt this pandemic and control these long-term sequelae.

So on slide 22, in trying to assign value to a vaccine during a pandemic such as this, there are a number of approaches. But one of the most established is using incremental cost effective ratios. Using a health economic assessment framework, you usually look just at healthcare costs, really the direct medical costs associated with caring for disease. Through the ICER analysis, we look at the incremental change in cost divided by the incremental change in health outcome. And the health outcome, the value of that improvement, is measured based on willingness to pay thresholds, generally $50,000 to $150,000 per quality adjusted life years.

And on slide 22, I'm presenting a recently completed analysis by Quadrant Health Economics, looking at an ICER at a $50,000 quality threshold. This analysis looked just at the short-term benefits of vaccination during a pandemic. And what I mean by that is just the value created in the first year after rolling out broadly of a vaccine. Now, scenarios depend on which populations you're looking at, and the value also depends upon the epidemiology of the virus that's ongoing. But looking at the current trajectory of infection in terms of epidemiology and vaccinating all adults, meaning those 18 plus, the ICER $50,000 value of the vaccine would be approximately $300 per course. If you focus vaccination just initially in the high-risk populations, say those over the age of 65, that value expands substantially, not surprisingly, given the high burden of disease in that population. Obviously, as transmission increases, the potential value of vaccine significantly increases beyond that.

Now, on slide 23, it's important to note the limitations of these ICER type analyses. So while there is obviously a lot of value in a vaccine in directly impacting the healthcare costs, such analysis does not look at the long-term sequelae and long-term disability potential of a disease like COVID-19. It also does nothing to capture the social disruption that's having a huge impact on all of our lives, nor does it do anything to reflect the economic loss that is rampant across our economies globally.

And with that, I'd like to turn it over to Stephane to talk to our approach.

Stephane Bancel - Chief Executive Officer

Thank you, Steven, for the value framing.

I think it is most appropriate for me to start with Moderna's mission. We set out nearly 10 years ago now with a mission to deliver on mRNA science to create a new generation of medicines for patients. Our mission has been on compass for almost a decade, and will continue for the long term.

On slide 25, I want to share our approach to delivering value during the COVID-19 pandemic. During this pandemic and throughout the development process of mRNA-1273, our promise to deliver for patients has never been clearer. We have a responsibility to do everything we can to develop a safe and effective vaccine. We have invested in manufacturing at risk ahead of approval to ensure supply if our COVID-19 vaccine candidate is approved. We are working with governments around the world and others to ensure a vaccine is accessible regardless of ability to pay and we will be responsible on price well below value during the pandemic.

Let me now turn to slide 26 and give you some more specifics. First, as we thought about a responsible pricing, we concluded it is important to consider different time horizons. We are currently under a pandemic, as defined by the WHO. At Moderna, like many public health experts, we believe that SARS-CoV-2 virus is not going away, and that there will be a need to vaccinate people or give them a boost for many years to come. So we think about two time horizons, the pandemic period as defined by WHO and the endemic period.

During the pandemic period, we are priced well below value with pre-approval supply agreements mostly to governments. To-date, smaller volume agreements have been executed between $32 and $37 per dose. Larger volume agreements under discussion will be at a lower price for higher volumes. In the endemic period, pricing considerations will follow traditional dynamics and market forces, including vaccine efficacy and the competitive landscape. We will look to price in line with other innovative commercial vaccines. We expect traditional approaches to vaccine purchase and distribution in the endemic phase.

With this, let me now turn to David for a review of our financials. David?

David Meline - Chief Financial Officer

Okay. Thank you, Stephane.

Turning to slide number 28. In today's press release, we reported our second quarter unaudited 2020 financial results.

We ended Q2 2020 with cash and investments of $3.1 billion compared to $1.7 billion at the end of Q1. The increase is driven by the capital raise in May of this year. Net cash used in operating activities was $130 million for the first half of 2020 compared to $253 million in 2019. The decrease in 2020 is mainly due to deposits of $75 million received as of June 30 for potential future supply of mRNA-1273. Net cash used in operating activities for the first half of 2019 also included $22 million of in-licensing payments to Cellscript to sub-license certain patent rights. Cash used for purchases of property and equipment was $25 million for the first half of 2020 compared to $18 million in 2019.

Total revenue was $66 million for Q2 2020 compared to $13 million for the same period in 2019. Total revenue was $75 million in the first half of 2020 compared to $29 million for the same period in 2019. Total revenue increased for both the three month and six month periods in 2020 due to increases in collaboration and grant revenue. The collaboration revenue increases were mainly attributable to an increase in revenue in the second quarter, particularly from AstraZeneca. The increases in grant revenue were primarily due to our BARDA agreement related to the development of our vaccine candidate, mRNA-1273.

Research and development expenses were $152 million for the second quarter of 2020 compared to $128 million for the same period in 2019. Research and development expenses were $267 million in the first half of 2020 compared to $258 million for the same period in 2019. The increases for both three month and six month periods in 2020 were mainly due to increased headcount and mRNA-1273 clinical development activities. Overall, in both periods, we saw a significant increase in expenses for our prophylactic vaccines modality as a result of our focus on mRNA-1273, while expenses related to the rest of the portfolio were stable.

General and administrative expenses were $36 million for Q2 2020 compared to $29 million for the same period in 2019. Expenses were $61 million for the first half of 2020 compared to $56 million for the same period in 2019. The increases for both periods were mainly driven by increases in personnel and legal expenses.

Turning to cash flow from net operating activity and purchase of property and equipment on slide 29. Cash used in operating activity and for purchase of property and equipment was $118 million, excluding the $75 million for deposits received as of June 30 for potential supply of mRNA-1273, in line with previous trends. On a reported basis, including the mentioned $75 million deposits, cash used in operating activities and purchase of PP&E were $43 million for the quarter.

Turning now to updated guidance for 2020. Our guidance today maintains the metric of net cash used in operating activities and for purchase of property and equipment. We will adopt additional guidance metrics in the future as the business progresses towards commercialization. As always, we'll be interested in any advice you may have on how we can be clear, concise and comprehensible. On an overall basis, the net cash used in operating activities and purchases of property and equipment in 2020 will increase to $0.65 billion to $0.85 billion from the prior guidance of approximately $0.5 billion for the year. Updated guidance for 2020 reflects ongoing investments in Moderna's broad mRNA clinical and preclinical pipeline as well as the significant activities associated with our efforts to advance our mRNA-1273 COVID vaccine toward approval and launch. With regard to the ongoing investment in our base business, we remain on track to prior plans where we continue to expect net cash used in operating activities and purchases of property and equipment to be approximately $0.5 billion in 2020.

Turning now to the financial impacts of our rapidly advancing mRNA-1273 COVID vaccine. First, expenses that fall under the scope of our BARDA agreement. These are primarily research and development activities to drive the COVID vaccine to licensure and scale up activities on the technical development and manufacturing side. As we expect a relatively close matching of expenses and reimbursement, we do not expect these activities to materially impact our cash flow and hence these are not shown separately on slide 29.

Next, looking at the COVID vaccine related non-reimbursable investments primarily for manufacturing of product to be commercialized in the US and internationally. We expect the net - the cash impact of COVID related investments to be between $0.55 billion to $0.75 billion in 2020. This includes approximately $0.2 billion in capital investments, with the balance of the expenses related to raw materials and production activity in our network. Additionally, this investment includes initial commercial infrastructure buildup. The sum total of net cash used in operating activities for all of Moderna's business is expected to total $1.05 billion to $1.25 billion before consideration of customer deposits. Also included in today's guidance are the deposits we have received to date for potential future supply of our COVID vaccine. Deposits as of July 31 totaled $0.4 billion, including $75 million received during the second quarter. We remain in active discussions with a number of potential customers, and we'll update the status as the market evolves.

In summary, on a net total Company basis, we update our 2020 guidance for net cash used in operating activities to $0.65 billion to $0.85 billion for 2020. We expect this number to reduce as we receive further deposits.

As we progress towards approval and commercialization of mRNA-1273, there is heightened interest in several areas of accounting that will increasingly impact our reported results as we move forward. Slide 31 highlights several of these items. Costs associated with pre-launch inventory are expensed to R&D in the period incurred. We will capitalize our inventory when regulatory approval and subsequent commercialization is determined to be probable and we expect future economic benefits from sales to be realizable. Customer deposits for potential supply of mRNA-1273 are recorded as deferred revenue and will be recognized as revenue when revenue recognition criteria are met at a future date.

Accounting for the BARDA grant follows a reimbursement model where we will recognize revenue as we perform services and closely match expenses as they are incurred. For purchase and supply agreements, we disclosed the aggregated amount of the purchase obligation that is fixed and determinable as per GAAP accounting requirements. This is regardless of whether these obligations have been recorded as actual costs in our financial statements in the current period.

With that, I turn the call back to Stephane for closing remarks.

Stephane Bancel - Chief Executive Officer

Thank you, David.

In closing, let me share with you a snapshot of Moderna today. The Company continues to progress its clinical pipeline and got closer in Q2 to becoming a commercial company. We have our first Phase III program with our COVID-19 vaccine, but we're also preparing the Phase III for our CMV vaccine.

We have three programs in Phase II, CMV; personal cancer vaccine, PCV; and VEGF, and we're also preparing Phase II for Zika vaccine and OX40 ligand development candidate in immune-oncology. We have eight programs in Phase I. We have had 12 positive Phase I readouts across five different technology modalities.

The primary development includes seven vaccines for unmet medical need, which if approved, could be first-in-class vaccines. This includes our vaccines against COVID-19, CMV, hMPV plus PIV3 combo, RSV in older adults and RSV pediatric population, Zika and EBV.

We have five immuno-oncology programs in clinical studies. We have four rare disease programs in both MMA and PA with open INDs. We have two autoimmune disease candidates with IL-2 and PD-L1 in preclinical studies.

The foundations of Moderna have never been stronger. We have about 2,000 healthy volunteers and participants enrolled in our studies as of the end of July, and that number will grow considerably over the coming weeks as we continue to enroll 30,000 participants in Phase III COVID study for our COVID-19 vaccine candidate. We have over 1,000 employees. We have a fully integrated GMP site in Massachusetts and a strong, experienced manufacturing partner in Lonza. Our biopharmaceutical partners are leaders in their respective fields and include Merck, AZ and Vertex. And finally, with a strong balance sheet at the end of June, we have the ability to invest $3.1 billion to create value.

We have entered a new growth phase for our Company. mRNA-1273 is now in Phase III. We have received approximately $400 million of cash for customer deposits for potential supply of mRNA-1273 as of July 31. And we continue to discuss with many governments around the world who are interested in getting access to mRNA-1273. The last six months have been extraordinary by many measures for our Company. The next six months could see us our first product filed for BLA approval.

We know that we have a special opportunity, and we are committed to delivering on the promise of our science to bring forward a new class of medicines for patients. That is why we started this company, that is why we work hard every day. mRNA-1273 is the head of a spear. We have a large pipeline with more than 20 development candidates. Since our founding, we have believed that it makes no sense that Moderna will be a one medicine company. It will be zero if we fail to make mRNA science work or it will be many medicines if the first one gets to market thanks to an FDA approval. That is because mRNA is an information molecule which makes Moderna a unique biotech platform company.

I would like to end our remarks by thanking the many people who participate in our clinical studies, including patients, healthy volunteers, physicians and nurses. I would like to thank our partners at the NIH and BARDA and in our biopharmaceutical partners. I would like to say a special thank you to Moderna team. They have done a remarkable job in Q2 during a very complex time, scaling Moderna quickly while managing lockdown and many personal disruptions. I'm very proud of the team's achievement in the first seven months of 2020.

With that, we are happy to take any questions. Operator?

Question & Answers

Operator

[Operator Instructions] Our first question comes from the line of Matthew Harrison from Morgan Stanley. Please go ahead.

Matthew Kelsey Harrison - Morgan Stanley - Analyst

Great. Good morning. Thanks for taking the question. I guess two from me this morning. First, on manufacturing for 1273. Can you give us an update on how much inventory you've built so far and where you are in terms of scaling to that 500 million dose per year run rate that you've previously highlighted? And then second, I was hoping you could comment on some media reports we've seen over the last day or two about FDA potentially convening a panel for vaccines in October and I guess also comments that there is going to be real-time review of vaccines and what exactly that means given the timelines potentially for your Phase III study. Thanks very much.

Tal Zaks - Chief Medical Officer

Matthew, this is Tal. Let me maybe take the second question first and then I'll defer to Stephane to take the first one. Look, I can't comment on media reports. I think that - we have been working very closely with the agency as I'm sure my colleagues have from other companies, to make sure that we're in lockstep and give them the greatest, best visibility we can to our data as it emerges. We continue that dialog as our Phase III is now enrolling.

The Phase III trial has pretty clear, if you will, interim analysis and the statistical robust - statistical plan that we had described in the past, but obviously with the level of unmet need and more and more data emerging to substantiate the potential for benefit as we continue to accumulate safety data on the Phase III, I'm very happy to see that FDA continues to take a very proactive stance in evaluating for the totality of the clinical data as it emerges. And as soon as I have any more insight than that, I'll be more than happy to share.

Stephane Bancel - Chief Executive Officer

Thank you, Tal. And Matthew, on the first question on manufacturing, we will not share inventory numbers at this time. What I can tell you is that as we speak our teams are making commercial products, receiving the potential approval of mRNA-1273, so we are literally making product and stockpiling at risk.

In terms of capacity, I'll confirm what we have said before, which is for 2021, the 500 million dose per year continues to be our base plan, meaning the team has a good sense of how to execute toward that plan, and the team continues to work really hard over many different approaches from new process, equipment to debottleneck to find a path to 1 billion dose which we still consider these days as an upside. So the base of 500 million is still our base case and the team is still working hard to figure out how we can get closer to a 1 billion capacity for 2021 output.

Matthew Kelsey Harrison - Morgan Stanley - Analyst

Okay. Thanks very much.

Stephane Bancel - Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from the line of Ted Tenthoff from Piper Sandler. Please go ahead.

Edward Andrew Tenthoff - Piper Sandler & Co. - Analyst

Great. Thank you very much and good morning, everyone. A question with regard to assumed infection rate for the Phase III. Obviously, this is going to be somewhat dependent on sort of where you are enrolling and things like that. So what can you tell us about the general assumed infection rate and kind of how many infections you may need to see to be able to power the Phase III study of that size? Thanks so very much.

Tal Zaks - Chief Medical Officer

Hi, Ted, it's Tal. It's a great question. The challenge is that I don't know how to build those assumptions given the huge wide variability we see in actual infections rates. So the number of infections you need to see correlates to the number of cases required to pass the interim. And as we've disclosed, it's roughly a little over 50, a little over 100 and 150-some for the first and second interim and then the final. That's the number of cases, and I think the advantage of running a 30,000-subject trial with 15,000 of them getting active vaccine and the rest of them placebo is that the larger that cohort, the more likely you are to see those cases early. But it's of course a direct function of infection rates.

I think the - sort of if you step back, philosophically, we designed with our partners at NIH such a large trial with the initial goal - not knowing at the time, what the infection rates were. You kind of just take it across country average, you figure you're going to be able to enrich it somewhat and you make it broad enough so that it's representative of good diverse population. I think what we've seen is an anticipated acceleration of the timeline to cases, not just by us, but I think by many people out there, recognizing that infection rates currently in the US are actually higher certainly in the areas in which we're doing this trial than maybe we would have thought three, four months ago.

So I think the initial projections and people smarter than me have sort of made them was that we had expected to see the cases come in towards the end of the year or by the end of the year. I think with infection rates currently, there may be an acceleration of that, but it's extremely hard to predict. We, like everybody else, sort of follow these on a daily and weekly moving average, and I don't think I've got a better crystal ball than anybody else in that domain. Over.

Edward Andrew Tenthoff - Piper Sandler & Co. - Analyst

That's helpful. Thank you very much, Tal.

Operator

Thank you. Our next question comes from Salveen Richter from Goldman Sachs. Please go ahead.

Salveen Jaswal Richter - Goldman Sachs Group - Analyst

Good morning. Thanks for taking my question. And so with regard to the volume agreements that will be executed at a higher price point for smaller versus larger volume orders, how are you delineating between the smaller versus larger in term of volumes? And then secondly, if two different companies developing vaccines for SARS CoV-2 both use let's just say that the PRNT50 assays, are those assays identical? So could you actually look at these programs head to head? Thank you.

Stephane Bancel - Chief Executive Officer

Good morning, Salveen. So let me take the first one, and I will turn over to Tal or Stephen for the second one. On the volume agreements, we are not disclosing a very precise cutoff because, as you can appreciate, there is a lot of different components that go into getting those agreements to the finish line with potential customers. I think small is more kind of in the millions and large, as you can imagine, probably where countries will be a very different ballpark.

Steven, you want to - or Tal - talk about the PRNT50 assays, please?

Tal Zaks - Chief Medical Officer

Yeah, this is Tal. I'll take a run at that. It's a great question. I think all of us are trying to look at them and understand the assays. There are big differences because those assays are not standardized and you've seen a range of PRNT50s, you've seen assays against live virus, pseudovirus neutralization. What's clear is that all of these correlate with each other pretty well, but there also are differences. And I think if you look across, that's why everybody is trying to sort of report it out as a ratio to the convalescent plasma.

The challenge there is, again, there is no standard panel for what the convalescent plasma is, so everybody is using different panels of sera. I think the ballpark estimates are probably roughly comparative. My sense is sort of between half a log and a log of each other, for sure, maybe even tighter than that. But it's hard to drill down and get confidence that you're really comparing apples-to-apples, and there is certainly I don't think identical people try to set them up in identical ways, but you're going to have minor variances. There is also variability in the preclinical models reported. You can see different - especially in the NHP, you can see people using different inoculums or inoculum levels, so different severity of infections in the different models and then reporting out protection or not.

So unfortunately we're still relatively in the early days. I think the good news is that you've seen for our data, pretty robust titers in every which assay you measure as it relates to convalescent plasma. I'm happy for all of us that I think we're probably not alone. There are going to be other vaccines that also seem to be getting close to that. And so ultimately we'll all get wiser when we see the Phase III results. Over.

Salveen Jaswal Richter - Goldman Sachs Group - Analyst

Thank you.

Operator

Thank you. Our next question comes from Michael Yee from Jefferies. Please go ahead.

Michael Yee - Jefferies - Analyst

Thanks. Good morning. Appreciate all the updates. Two quick ones for me. First, you've seen - or the market has seen a lot of contracts being deployed both in UK. This morning also, another US contract deployed, J&J. Could you just put into some context for us how we should think about Moderna's position here, a presumption of a diversified stockpiled, maybe why or why not there hasn't been anything to announce just yet? Maybe just make some broad comments about that.

And then the second question I guess is, since you've reported data, there has been obviously a lot of other platforms with data that have come out, both adeno and Protein last night. Maybe just make a comment about how to put that into perspective and the market's enthusiasm or people's enthusiasm about those datasets. Thank you.

Stephane Bancel - Chief Executive Officer

Good. Thank you, Michael. Good morning. Let me talk - little bit of contrast and then I will hand over to Tal. So, as you know, Michael, to get to a contract, you need two parties to agree on terms. As I said in my remarks, we are discussing with governments around the world. As you know, we have a longstanding relationship with the US government, with different agencies, BARDA, DARPA and NIH. The contracts that have been signed so far are contracts so that actually literally around the world, in all the key regions. And so as we get to the right place, of course, we will make the right announcement as appropriate.

Our understanding, and it has been said publicly, that different governments have different strategy. Some of them wants to build a portfolio to manage risk, because of course at this stage nobody knows which vaccine will get approved. Nobody knows will we find efficacy, which will be most probably a very important, especially for the population at risk, the elderly people with comorbidity factor. To them, the difference in efficacy might be very, very important. And so I think what we're seeing is the governments doing what I think we would do or you would do if you were running a country or trying to get - take care of the health of a large group of people, which is to build a portfolio, thinking about both risk to success performance of a product and so covering the country.

So, as you see, a lot of those agreements have options built into them, which I think again makes a lot of sense. As we said, we want to be part of the solution and make sure that we can be helpful. As we've said, we are cautiously optimistic about the good clinical data so far of our vaccine and want to make sure we can help as many people as we can around the world, as many governments as we can, to help protect as many people as we can, to kind of stop this pandemic.

Tal, can I pass it you for the second part of the question from Michael?

Tal Zaks - Chief Medical Officer

Yes. It's a great question on how the platforms are starting to stack up to each other. I think we - I think our data continue to be as good or better than anything anybody has reported both in terms of what we're able to show in neutralizing antibodies and in terms of the challenge with doing in the nonhuman primate and the ability to completely eradicate or eliminate the viral replication in both the lung and the nose. It's been nice to us to see Pfizer validating our data in a way with the BioEnzyme contract. Of course, we're still very curious to see what they're taking into Phase II and III because reportedly they're taking a different construct than the one for which they've shown data.

I think the adeno vectors, writ large - it's been an interesting story initially. It's pretty clear that there is less expectation for their ability to boost, given the nature of their platform. And indeed, the first one I don't think boosted at all. The AstraZeneca Oxford data I think are encouraging in that they can get with the boost, apparently two levels of convalescent plasma. Hard to say. Very early data, as I think - even though they does more than 1,000 subjects, they showed data for 10, which they gave a prime boost. So I'm encouraged by those data, and I hope that that's enough. I suspect that if that ends up being the case, then hopefully for all of us, you will see them sort of be able to reach the minimal bar. But I am encouraged by our data and expect that they will translate into - I'm optimistic that they will translate into higher point estimates for efficacy.

We saw Novavax data last night. I think any of us who has been following the field of vaccines anticipated that a recombinant protein done the right way with a strong adjuvant could be effective. I think their - certainly their neutralizing antibody data are encouraging, and ultimately I think the Phase III results are going to be required now to really understand fully the point estimate for efficacy as well as a better understanding of the reactogenicity and safety profile of these various approaches.

So in summary, I think the mRNA platforms are clearly there with our data looking great. I think Novavax did a very nice progress. And I think the adeno vectors, I hope they get there, but I think they're going to struggle to boost, and I think all - anybody who has done a boost or is able to show a boost is able to show as immunology would anticipate a very nice potentiation with a booster shot. Over.

Michael Yee - Jefferies - Analyst

Thank you. Thank you.

Operator

Thank you. Our next question comes from the line of Gena Wang from Barclays. Please go ahead.

Gena Huidong Wang - Barclays - Analyst

Thank you for taking my questions. I have two questions. So the first one is regarding the Phase III primary endpoint. Just wondering how do you count infection. I think according to the clinicaltrials.gov, it's basically number of participants with the first occurrence of COVID-19 starting 14 days after second dose. Just wondering is there a time cutoff so that every patient will have a same time exposure or will you report it as event per 1,000 patients years?

And the second question is regarding the Phase I/ Phase II data update hopefully this month or next month. So will we see more meaningful number of convalescent serum from severe patients using PRNT, either PRNT50 or PRNT80?

Tal Zaks - Chief Medical Officer

So let me take those. I'm not sure we're going to see significantly additional data on convalescent plasma. We're going to look at that when we report out the Phase II. So I think it's premature for me to say one way or another. Regarding your question on Phase III, I'll make two points. The primary analysis is just the number of cases. It's not really - it's a slightly different method statistically, but you end up with the same place as - I think what you're referring to is the Pfizer methodology. You will see the number of cases, and then the split in those cases, and of course we'll describe the timeframe.

In terms of counting those cases, you are correct in that the formal counting of cases where you want to fit a distribution occurs 14 days after the booster shot. That's the definition of the primary endpoint. There is however a secondary endpoint that we'll look at the totality of cases that emerge once people start the trial, and of course, I think that could be further supportive evidence, especially if the infection rates are so high that indeed we start to see some cases even in the first six weeks. The case definition for us is symptomatic disease. Again, there may be some minor variations between sponsors. I'm not sure everybody is fully harmonized to the same definition. We've been very transparent with the exact definition of our endpoint so that people can draw their own conclusions and comparisons. Over.

Gena Huidong Wang - Barclays - Analyst

Thank you.

Operator

Thank you. Our next question comes from the line of Cory Kasimov from JPMorgan. Please go ahead.

Cory William Kasimov - JPMorgan Chase & Co. - Analyst

Hey. Good morning, guys. Thank you for taking my questions. Two from me as well. First one is on pricing. I appreciate all the thought and detail that went into your prepared comments on the value proposition this morning. But I guess what I'm wondering is, if we see other companies out there currently agreeing to contracts with various governments with price points that appear to range from the low single digits to nearly $20 per dose, doesn't that make it inherently more difficult for you to try to charge something materially higher than that?

And then second question is probably for Tal. I'm wondering how difficult is it to maintain the integrity of the Phase III blinded trial when you would suspect a large proportion of the mRNA-1273 treated patients are expected to get common vaccination adverse events like fever and other symptomatic - other systemic events where presumably that wouldn't happen with placebo? Does that matter much in the end in your view? Thanks.

Stephane Bancel - Chief Executive Officer

Good morning, Cory. So, it's Stephane. I'll take the first one on pricing and then I'm sure Tal will take the P3 question. So I think like in any discussion, Cory, many factors go into arriving on - to an agreement. I would say, first, the totality of the data that is available at the time of the discussions, preclinical model, clinical data. Again, given us, so we have a platform, we have the possibility to share the public information that has been shared before over the dataset.

So I mean, data is an important one because I do not think all products are equal. And as Tal said, we would of course learn much more our Phase III data in the fall. Another consideration of course is volume. As we indicated in our remarks. And then another factor that is important is time of payment, how is the risk distributed between a lot of companies. But as we discussed in our remarks now, like us, have started to make product at risk not knowing if 1273 in our case will be approved or not. And so - and there are many more consideration as well. So I think when you look at the totality of data. As we've shared, we have signed a number of agreements already for potential supply in the $32 to $34 range. And we also said, as volume will increase, we'll of course integrate that into the analysis. So, we'll work - we'll work with the market, but we also know what we have in term of product.

Tal, you want to take the P3 question?

Tal Zaks - Chief Medical Officer

Yes. So, of course, an astute observation and we and our partners at NIH have thought about this one long and hard. I think at the end of the day, you're right, especially after the second dose. First dose, probably people still won't know. At second dose, people may intuit whether they've got the active one or not. I think the important piece here is that the endpoints are pretty hard endpoints in that - I don't think that you're going to be less likely to report significant symptoms if you've got placebo or not and the measurement of a PCR test is a PCR test.

We have put in place measures to ensure that there is no sort of quirks of the unblinding. For example, we're going to be testing PCR everybody both on this one and when they come in for the second dose just to make sure that if they do see some mild flu like symptoms, there clearly attributable to vaccine or it is an infection, and we're not by biasing by measuring more frequently in those that got a vaccine. I think beyond the first couple of days, I don't expect there to be significant symptoms in anybody, so I don't think there's going to be biasing of any testing. In terms of the asymptomatics, we're going to look retrospectively anyway and call that based on serology and everybody will get tested.

So I think by making sure that all the objective measures are done on both arms at the same time points, I think we should be in pretty good shape here.

Cory William Kasimov - JPMorgan Chase & Co. - Analyst

Okay. Thank you. Appreciate the thoughts.

Operator

Thank you. Our next question comes from Geoff Meacham from Bank of America. Please go ahead.

Geoff Meacham - Bank of America Merrill Lynch - Analyst

Hey guys, good morning and thanks for the question. Just had a few. So what we've learned on the value of 1273 is that T-cell responses are important as our antibody titers. And so when you look at the new data today for Zika or for CMV or really anything going forward, do you think you'll place more emphasis on optimizing T cell responses just with respect to the platform? And then just a follow up on 1273 pricing, when you look at the Phase III data, is there a single element that you would say justifies differential pricing, be it T-cell or B-cell or safety profile, things like that? Thank you very much.

Tal Zaks - Chief Medical Officer

So let me take, Geoff, the first question and I will let Stephane answer the second. I think a lot of hay has been made out of T-cell responses. Look, T-cells are near and dear to my heart, being a medical oncologist. They are required to cure cancer. I don't - I'm not quite sure they are as important to cure COVID-19, frankly. I think what they are is a measure of the quality of the response. So, if you will, they - the fact that we see the right kind of Th1 helper I think makes everybody feel good about the antibody responses.

But at the end of the day, the best measure of the immune response you're getting is look at the ability to boost after a prime, and that tells you that the immune - even after one dose, once you get the boost, you can see the antibody levels come up quickly, they come up to high levels, they come up with good neutralizing activity which is the best predictor that should you get infected the immune system will trigger again in a similar manner, and that's how the immune system works. I think we've had plenty of data from other infectious diseases demonstrating that whenever you try to find a correlate of protection and Merck had done that with Zostavax years ago, and that's even a disease where you think T cells matter more, the correlate of protection comes up time and again being neutralizing antibody, not T cells. T-cells are an adjunct sort of measure of the quality of the response when it comes to these kinds of viruses, and I think the totality of the data that we've seen with SARS-CoV-2 in terms of all the animal models you can possibly transfer antibodies and get protection. So I think that there has been a lot of variability on the T cell side in terms of people reporting assays. And I think people are trying to read into the T log and assume something about the quality of the response.

But to me, that's a more distal measure of what matters when you've got the most obvious proximal measure of what we think is the correlate and the thing that will translate to benefit, which is thriving antibodies. So it's a bit of a long-winded way of saying that I don't think it matters as much. And certainly when you look at optimizing our platform, look, we know our platform is optimized to generate T cell responses. We've seen that in the cancer T cell space where we just do - all we do is raise CD8 positive T cells by putting in concatenated CD8 positive epitopes. We get some CD4s but that is - an innate function scientifically of the ability to translate the antigen from within the cell with an mRNA. So I don't think it would be fruitful to try and optimize to T-cells - I don't know that it matters and I wouldn't know how to do it. And by the way, we already have something that seems to do that based on the fundamental science of what our platform is doing. Let me just stop here and transfer to Stephane.

Stephane Bancel - Chief Executive Officer

Thanks, Tal. So on the - on the Phase III pricing, so safety of course is very important. But I would say important for us, the sponsor, for regulators obviously and that would be kind of an important consideration to look at the totality of the data, especially for approval of a product.

So, as you may, good safety profile. We believe that one important parameter of course is efficacy because again I think if you can see has different. I mentioned that if you can see that is important to reach herd immunity at the population level but there is so efficacy, if you look at it in the eyes of whoever received the vaccine, because as you can appreciate the vaccine 50% efficacy or a vaccine with a 90% efficacy will be very different than what it means to you potentially just statistically in term of you getting protection or not.

And then I would say the study population. I mean of course no healthy adults is what has been mostly reported so far. It's a very important population obviously, but we all look forward to looking at the data in the elderly. As we all know, as Stephen described again during the remarks, the elderly are very reasonable to this virus and so, understanding antibody titer, understand efficacy in the elderly, we believe is going to be important.

So diversity, we talked about that next group has been widely reported that some ethnic groups are impacted very differently by the virus, and so, getting an understanding of that through the study as you know we have paid a lot of attention and we've talked about it within one of our call, about the effort the team is going through to ensure a good representation across ethnic groups.

And then I would say comorbidity. It is very important again because of who is being hurt the most by this virus, to understand, though, is there a difference for different commodity groups for different vaccines. So as you can see, I mean there's going to be a lot of pieces to efficacy picture. Again, some public payers in some countries might be willing or not to pay for different efficacy for the different efficacy group. The private market might have a very different inclination. And again in places where it's out of pocket, you will have to actually I think also making very on top of the decisions.

The other dimension of course is duration of protection, which obviously we take time for all the vaccine manufactures to really understand at large scale in the clinical setting. But as you heard us say, we believe like many of our health experts that this virus is not going away. We believe it's going to be an endemic market once the pandemic is declared over by the WHO. Duration would be an important factor. As you can appreciate, if a vaccine provides a one-year protection versus six month versus two year versus three years, that will all will play into the equation. So those are some of the factors that we will carefully think about again both independent setting where we said we will make sure that we price our product at a big discount to value and in the endemic setting when we look at all these different product performance and market forces to determine what we believe is the most optimal price for our product.

Geoff Meacham - Bank of America Merrill Lynch - Analyst

Okay. Thanks guys.

Stephane Bancel - Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Hartaj Singh from Oppenheimer. Please go ahead.

Hartaj Singh - Oppenheimer & Co. - Analyst

Great. Thank you for the questions and for all the words. Just a couple of quick questions off the topic of the COVID-19 vaccine. One is, can you just go over quickly the CMV Phase III program, the initiation, the development. And when you would expect that readout and potential approval for that sort of product? And then secondly, in some of our calls with pulmonologists that treat cystic fibrosis, there seems to be a lot of excitement around mRNA therapy for treating cystic fibrosis patients. The belief right now is that it could only treat a minority of those patients, but our call seem to suggest that it could treat a majority of the cystic fibrosis patients. Could you talk a little bit to that and where exactly are you with the Vertex collaboration? Thank you.

Tal Zaks - Chief Medical Officer

So let me start with the Phase III and let Stephane talk about the Vertex collaboration. The Phase III as we had previously articulated - I don't think anything has changed. The trial should follow participants for at least a couple of years. It will probably take around 18 months to enrol and then you wrap up the data. So that sort of gives you a sense of the overall duration. We're on track to start next year. I think what should be obvious to everybody is, once we have the Phase II data, it's going to require some regulatory interactions and the Phase II meeting and so forth.

We had gotten feedback in the past from FDA about the primary endpoints, which I think reassured us that it was feasible because we're looking to prevent primary infection in women of childbearing age. Not directly looking at outcomes in maybe babies, at least not as part of the Phase III program. That being said, obviously it will require much more detailed discussions with them on the Phase III design and the dose and alignment with them prior to start of the Phase III. So I hope that gives you some additional color.

I can tell you my sense on Vertex as a scientist. I am super excited by the potential for mRNA to not be limited by any particular mutation just from the fundamental science of it, but let's Stephane speak to the overall status of the collaboration.

Stephane Bancel - Chief Executive Officer

I will let maybe Stephen talk about it, given it's his team is doing all the work.

Tal Zaks - Chief Medical Officer

I think Stephen had to jump off our call.

Stephane Bancel - Chief Executive Officer

Yeah, sorry. Thank you. So on Vertex. So as we've communicated, I think it was in the Q1 call, Vertex decided to expand the collaboration with Moderna on CX. The joint teams discovery have done a really remarkable drug in the last few years in term of delivery. As you can imagine, given you know us well making a CFTR mRNA is not that complicated given all the things we have done and the current state of our platform and the technology. It is obviously the challenge entirely in delivery.

We look forward to sharing some data soon. Again, it's a partnership so we need of course to align with Vertex on what do they believe is the right timing, but as Tal said, the teams on both side, I think Vertex and Moderna are very excited about the progress, about the possibility of what it will mean for patients. And as we've discussed before we know if we can find the technology to deliver safely into the lungs mRNA obviously we will be able to use that for other diseases of the lung.

And just to remind everybody, the Vertex collaboration is focused on the CFTR gene. And so the other applications will be long-term within that from a commercial standpoint. Thank you.

Hartaj Singh - Oppenheimer & Co. - Analyst

Great. Thank you.

Operator

Thank you. Our next question comes from Alan Carr from Needham & Company. Please go ahead.

Alan Carr - Needham & Company - Analyst

All right. Thanks for taking my questions. Just following on the theme programs other than COVID-19, you mentioned before enrollment in two of these programs is still paused or suspended because of COVID-19. I'm just kind of wondering if you're able to still I guess prioritize and move forward some of the programs such as the rare disease programs. Do you feel like you can still keep your eye on the ball in terms of the rest of the non- COVID pipeline at Moderna?

Tal Zaks - Chief Medical Officer

So this is Tal. Let me maybe take a stab at that. I think the answer is absolutely, yes, and I think it's evidenced by the progress that we continue to show for the rest of our pipeline. We've expanded the development team quite significantly to go after the COVID-19 vaccine so that I think we've got very capable teams that are pushing everything else. The fact that we continue to enroll in oncology has been a little bit of a slowdown similar to others. And we, it really depends on the individual centers - that as to who is enabled and when to treat patients.

I think on the rare disease, not only is our eye on the ball, I think we've, as we had alluded to in the past, we're actually using the time to kind of step back and engage deeper with both investigators and patients and advocates to make sure that when we do restart those programs because the kids can finally come back in, those programs are better optimized so that they can, we can perform better in terms of recruitment and analysis of data on the study.

So we're continuing to execute across all these fronts, and I think you'll see as hopefully the pandemic proceeds or centers figure out how to despite PPE and social distancing to continue or restart clinical activities, then we should come back online across the board. Over.

Stephane Bancel - Chief Executive Officer

Yes. And maybe just to add to Tal's important comment, when things started to look bad from a global basis in terms of the spread of we SARS Covi-2, we spent quite a long time, I would see in the February timeframe with the Board and the team to think about how do we structure of the Company, how do we resource of Company, to Tal's point so that we can do both. It was very clear that a lot of focus and energy was going to be required to march at a very fast pace without compromise the safety for 1273. But at the same time, Moderna has always been a platform company, it has always been about managing risk through a very diverse pipeline across different therapeutic areas, across different modalities or technology for those on the call [Indecipherable] used to Moderna. And so, it was really important for us given the inherent risk of developing a product like 1273. Again, we feel much better now given the data we have seen, but I'm looking back in February.

And so we, we could it correct. A large number of very experienced development professionals in clinical, regulatory, clinical operation to be able to actually do both. And that was one of our big challenge, and I have to say the team as we've done a remarkable job to both push 1273 as safe as we can, as hard as we can, because we know that every day does matter and at the same time continue to execute on the pipeline. It has been very challenging given the lockdown, given our focus on safety. Some of the studies were easier to keep rolling. Some of the studies because involving children who are there to make sure especially children with very severe disease that we didn't take the risk to expose them to infection by going to clinical trial sites or the caregiver and family. And so we have not laid down an inch on the focus on the pipeline outside of COVID.

Alan Carr - Needham & Company - Analyst

Geat. Thanks for taking my questions.

Operator

Thank you. Our next question comes from George Farmer from BMO Capital Markets. Please go ahead.

George Farmer - BMO Capital Markets - Analyst

Hi. Good morning. Thanks for taking my question. Quite struck by the fact that neutralizing antibody titers don't really seem to emerge until after the second boost whereas antibodies in general seem to be elicited after the first injection. How do you think about this? I mean it seems to be across the board, not just with your vaccine but with these other vaccines. And importantly, how would such patients be treated in the Phase III? Should they come down with COVID say after the first injection because of not having the sufficient titer going into the second injection? Thanks.

Tal Zaks - Chief Medical Officer

Thanks, George. It's Tal. Yes, it is interesting. I think it kind of speaks to basic immunology which is if your immune system thinks it can clear an infection easy it doesn't try too hard. If you come back later in and basically show that know the infection isn't gone, then it tries harder and that's usually manifest with affinity maturation improvements and in the antibody qualities as well as the absolute titers. And so I suspect what you're seeing is a subtle manifestation of that.

Now the question is, though what happens after just the prime. Yes, you don't have neutralizing antibodies. But clearly the immune system now reacts differently once it's the antigen because you get the boost. And so it's an interesting question, well, what happens if the boost happens not with the vaccine but with the natural infection. I would suspect based on sort of first principles that you should see some benefit, probably not the full benefit you would see if you get infected after the boost, but just by nature of the boost boosting you would expect that an infection would also boost in the sense of the immune response would react quicker and more vigorously and maybe you won't prevent infection and maybe you won't even prevent disease. But hopefully you would prevent the more severe manifestation of disease because disease, at least as we understand it in the first phase here, is a balance between your immune response and clearing the infection.

So it will be very interesting I think both for us and for other platforms that user prime boost to do that secondary analysis of understanding whether we've seen any cases in that first month or six weeks and what the distribution of cases are between placebo and your treated.

The last piece, I'd say that I think also gives me some hope here is the non-human primate where a single dose in the non-human primates can - or at least the mouse models, the experience with the non-human primate is ongoing, but in the mouse model clearly see that even though you don't see - you don't measure the neutralizing antibodies just yet, you are already able to limit viral or abrogate viral replication in the lungs. And so I think that gives you a sort of immunological readout on the phenomenon describing. Over.

George Farmer - BMO Capital Markets - Analyst

Okay. And then along those lines, do we have a view on durability yet? I mean, following these - following both the non-human primates and maybe the mice if they live long enough, do you have a sense for how durable the vaccine effect could be?

Tal Zaks - Chief Medical Officer

Yeah, I do not - I would make two points on that. First, I don't think any of us yet understand durability. What is emerging is that if you have mild infection you're more likely to have a lower level of antibodies and they're more likely to weigh that kind of goes with the quality of immune responses I described previously. It's also - I mean let's not mistake the ability to measure antibodies over time as the sine qua non of having a memory and immune response, right. Otherwise, by the time you were my age, you'd be walking around with your blood thick and clotting with antibodies against every infection you've ever seen and yet I am immune too many things that you are not going to necessarily see high levels of neutralizing antibodies in my blood. It's more about the memory of B cells and the persistence. I think that initial level of neutralizing antibodies what gives us the confidence that we've got the right quality of the response and the magnitude is as high or higher than what you can see with disease with real infection in convalescent plasma.

Now, all that being said, I think it's obviously reassuring to see the quality of a response by maintaining high neutralizing antibodies. I think if you look at what the platform is able to induce, it's pretty evident from the CMV data described earlier this morning that certainly in that instance with the third boost at six months, you now look out to a year and you see levels that are still higher than what you had targeted. I think as it all boils down to the utilization in the context of a pandemic here if what we have is 12 months of durability, I think that's a great starting point for us to start protecting the population and we'll worry about what happens in year two, three and four, when we get to 2022, 2023 on the other side of this pandemic. Over.

George Farmer - BMO Capital Markets - Analyst

Okay. Thanks, Tal.

Operator

Thank you. Our last question comes from Mani Foroohar from SVB Leerink. Please go ahead.

Mani Foroohar - SVB Leerink - Analyst

Hey guys, thanks for taking question. A couple from me. One quick one from an investor. Could you lay out the economics you guys receive on a commercialized vaccine, how to think about percentages paid out to academic partners and the NIH commercial economic interest, etc., just breaking it out as we try to understand what unit margin might be? And then secondarily, as we look at pricing, it's been commented by a couple people here, a couple of analysts regarding pricing in the low single digits to up to just below $20 for example in a larger volume contract. It sounds like we should think as somewhere in that range as par for larger contracts for you guys during the pandemic.

But as you talk about the endemic environment and potentially higher pricing, could you lay out how you expect to realize that pricing and the set-up where demand will likely decline as the severity of COVID-19's impact globally is reduced during an endemic versus the pandemic period in a setting where perhaps a half dozen or more vaccines being commercialized by large established players with commercial experience and tender markets such as these will be actively competing on price and volume. So if you could lay out how you expect to substantially increase your realized price in the setting of increased competition, increased supply and reduced demand, that will be really helpful. Thank you.

Stephane Bancel - Chief Executive Officer

Thank you and good morning. This is Stephane. So this first one is going to be quick, because we are not disclosing [Indecipherable] margin product.

On the endemic market, clearly, as we said in our remarks the collective dynamics are going to be important. We continue to believe that when you look at the totality of the data, not only across 1273 but across 1273 [Indecipherable] public and are on the platform that efficacy is going to be an important parameter. We've hired people and we'll continue to have people in the commercial world that comes from large established vaccine players who have relationship with [Indecipherable] relationship with people in the channel. And so we believe that we should be able to establish good commercial presence based on the performance of the product.

Mani Foroohar - SVB Leerink - Analyst

Great. And as a follow-up, when you talk to - so a couple of things about the CD8 T cell response, T cell biology, just to clear up. The comment that you've - across your platform you've shown effective T-cell response that was directed regarding constructs in your cancer portfolio right and not at this particular vaccine where we haven't seen a CD8 T-cell response of any measurable level as described in your non-human primate our human disclosures thus far. You were talking about the cancer vaccines, right, you weren't talking about any prophylactic vaccines so any CD8 T cell response here.

Tal Zaks - Chief Medical Officer

So this is, Tal. That is correct, although I have to go back, as we did disclose some T-cells for CMV. I don't recall whether they were CD8 or just CD4 frankly off the top of my head.

Mani Foroohar - SVB Leerink - Analyst

Yeah. Awesome. Thanks, Tal. Thanks for correcting me there. That's really helpful. And thanks for taking the questions guys.

Tal Zaks - Chief Medical Officer

Pleasure.

Operator

Thank you. I show no further questions in the queue. At this time, I'd like to turn the call over to Stephane Bancel, CEO, for closing remarks.

Stephane Bancel - Chief Executive Officer

Well, thank you very much everybody for joining today. Stay safe and we'll speak soon.

Operator

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MODERNA INC

Q2 2020

Earnings Transcript

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