Title

Presentation

Vaxcyte, Inc. misses on earnings expectations. Reported EPS is $-1.8 EPS, expectations were $-1.46.

Operator: Good afternoon. My name is Chloe, and I will be your conference operator for the Vaxcyte Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] Today’s call is being recorded. I will now turn the call over to Andrew Guggenhime, President and Chief Financial Officer of Vaxcyte. Please go ahead, sir.

Andrew Guggenhime: Thank you, operator. Good afternoon, everyone, and thanks for joining us today as we review our 2025 results and provide a business update. I am joined by our Chief Executive Officer, Grant Pickering; and our Executive Vice President and Chief Operating Officer, Jim Wassil. Earlier today, we issued a news release announcing our results. Copies of this and our other news releases, latest corporate presentation and SEC filings can be found in the Investors and Media section of our website. Before we begin, I’d like to remind you that during this call, we’ll be making certain forward-looking statements about Vaxcyte, which are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those referred to in any forward-looking statements.

For a discussion of the risks and uncertainties associated with these statements, please see our press release issued today as well as our most recent filings with the SEC, including the risk factors set forth in our Form 10-K for the year ended December 31, 2025, and any subsequent reports filed with the SEC. With that, I’ll turn the call over to Grant Pickering. Grant?

Grant Pickering: Thanks, Andrew. As we close out 2025 and look forward to multiple clinical readouts beginning later this year, I’m proud of the progress we made across the company, particularly within our pneumococcal conjugate vaccine or PCV franchise. Despite decades of vaccination efforts, pneumococcal disease continues to drive substantial morbidity and mortality worldwide, particularly among young children and older adults. While current vaccines have made a meaningful impact, gaps in serotype coverage persist and the public health need for broader spectrum protection remains clear. Consistent with that need, we are seeing accelerating growth in the adult PCV market, driven by expanded age group recommendations in the United States and increasing international adoption of adult PCV vaccination.

Continued momentum in the PCV class has reinforced the size of the opportunity and demand for a PCV that increases disease coverage by protecting against both historically and currently circulating serotypes while maintaining robust immune responses. Taken together, this underscores our opportunity to improve public health as we prepare to enter an increasingly attractive commercial market. The unprecedented results from our Phase II study in adults demonstrated that VAX-31 may offer substantial improvement over existing products and achieve our objective to significantly expand disease coverage while maintaining high immunogenicity responses. And with the OPUS Phase III program underway, we believe that we are uniquely positioned to set a new standard by which future adult pneumococcal vaccines will be measured.

In December, we initiated OPUS-1, our pivotal noninferiority study and expect to announce top line safety, tolerability and immunogenicity data in the fourth quarter of this year. In January, we initiated OPUS-2, a Phase III trial evaluating VAX-31 when administered concomitantly with a licensed seasonal influenza vaccine, reflecting real-world vaccination practice. And earlier this month, we announced the initiation of our OPUS-3 trial to evaluate the safety, tolerability and immunogenicity of VAX-31 in adults who previously received lower valency pneumococcal vaccines. For this population, VAX-31 could represent a substantial incremental benefit and could be well positioned to obtain a catch-up recommendation. We look forward to the readouts for both OPUS-2 and 3 in the first half of 2027.

In infants, we reported the final data from the VAX-24 Phase II dose-finding study in November. These data were consistent with the previously reported positive interim results and provided important encouraging insights into immune responses, concomitant administration with other vaccines and dose responsiveness. Based on these learnings, we modified the ongoing VAX-31 infant Phase II study to include an optimized dose arm in order to evaluate multiple higher doses than those explored in the VAX-24 infant study. Enrollment for this study is now complete, and we expect to announce top line safety, tolerability and immunogenicity data for both the primary 3-dose immunization series and booster dose either sequentially or together by the end of the first half of 2027.

In parallel, we continue to make strides to fortify our manufacturing capabilities, commercial readiness and financial foundation. On the manufacturing front, I’m pleased to report that we have now completed the construction of the dedicated large-scale manufacturing facility on time and on budget that has been designed to support global commercial demand for our PCV candidates throughout the developed world. In addition, the build-out of a high-volume, custom fill-finish production line in North Carolina is underway as part of a long-term investment of up to $1 billion in U.S. manufacturing and services. To advance commercial readiness, we began to scale the organization, including the appointment of our first Chief Commercial Officer, Mike Mullette, and the initiation of launch planning activities in earnest.

These actions reflect our conviction in the long-term potential of our PCV franchise and our focus on a highly successful commercial launch. Turning to our balance sheet. We strengthened our already robust financial position with the successful completion of a public equity offering in February. We believe we are well positioned to advance our programs through multiple upcoming data readouts while continuing to invest in the capabilities needed to prepare for commercialization. Overall, 2025 was about focused execution on our clinical programs and establishing the infrastructure clinically, operationally, and organizationally to support what we believe will be a defining period ahead. None of this progress would have been possible without the expertise and dedication of our teams across the organization, and I want to thank them for their commitment.

With that, I’ll turn the call over to Jim to walk through our clinical programs in more detail, including the OPUS Phase III program, the infant program and an important update on VAX-A1, our Group A Strep candidate. Jim?

James Wassil: Thanks, Grant. I’ll start with an update on our VAX-31 adult Phase III program and then turn to our VAX-31 infant Phase II program and broader pipeline. Beginning with adults, the Phase III OPUS program represents VAX-31’s transition into late-stage development and is designed to support a planned BLA submission. The Phase III clinical trials were finalized in consultation and alignment with the FDA and are intended to generate a broad and robust safety, tolerability and immunogenicity data sets across relevant adult populations and real-world vaccination scenarios. OPUS-1 is our pivotal noninferiority trial evaluating VAX-31 for the prevention of invasive pneumococcal disease and pneumonia. This trial is evaluating the safety, tolerability and immune responses of VAX-31 in adults aged 50 and older through direct head-to-head comparisons with both Prevnar 20 or PCV20 and Capvaxive or PCV21, which are the current standard of care PCVs for adults.

We remain on track to announce top line data in the fourth quarter of this year. OPUS-1 was designed to establish a best-in-class profile for VAX-31. Based on the unprecedented clinical results we have generated to date, we believe this trial can deliver that profile and thus set a new standard in the adult pneumococcal vaccination. We believe the current standard of care vaccines, PCV20 and PCV21 have hit the ceiling of what conventional approaches can achieve. Each of these vaccines represented a meaningful advancement over prior generations, yet in both cases, trade-offs were required to obtain licensure. In the case of PCV20, they focused on making incremental serotype additions to PCV13, but fall short of coverage of the 31 serotypes in VAX-31.

For PCV21, while it covers a greater percentage of circulating disease than PCV20, the trade-off was sacrificing historically circulating strains, some of which are still circulating meaningfully and others that are likely to return if we fail to protect against them. VAX-31 is designed to overcome each of their limitations. By using our validated carrier-sparing platform, we have shown VAX-31 can provide protection against both currently circulating and historically prevalent serotypes while maintaining robust immune responses. With the OPUS-1 study where PCV20 and PCV21 are the comparators, totality of data framework supports our objective to deliver a best-in-class PCV. In this context, regulators assess both the public health impact and the overall strength of the data package, for which perfection on an individual serotype basis has never been required, nor is it our expectation.

With this in mind, we are confident we can deliver an outcome to support a robust BLA submission and with 10 or 11 incremental serotypes over our study comparators, we believe VAX-31 has the headroom to miss on a handful of individual serotypes without risking the ultimate goal of licensure with what we believe is a best-in-class profile. Now I’ll briefly review the other OPUS trials, which are also currently enrolling subjects. OPUS-2 is designed to evaluate the safety, tolerability and immunogenicity of VAX-31 when administered either concomitantly with or 1 month following a licensed high-dose seasonal influenza vaccine in adults. This descriptive study reflects clinically relevant real-world use scenarios, particularly for older adults who routinely receive multiple vaccines at one time.

OPUS-3 is evaluating VAX-31 in adults who have previously received lower valency pneumococcal vaccine. This descriptive study is intended to evaluate the safety, tolerability and immunogenicity of VAX-31, including whether VAX-31 can boost serotype-specific immune responses while providing the broadest coverage in a single vaccine in this adult population. OPUS-1, -2 and -3, complemented by a planned manufacturing consistency study are designed to generate a broad and robust safety, tolerability and immunogenicity data set. The 3 ongoing trials will enroll approximately 6,000 adults in total, of whom approximately 3,400 will receive VAX-31. Turning to our infant PCV programs. We completed the VAX-24 Phase II dose-finding study with final data confirming dose-dependent immune responses and the safety and tolerability profile consistent with the standard of care comparative.

As Grant noted, we used those learnings to modify the ongoing VAX-31 infant Phase II study to include an optimized dose arm. The higher doses being evaluated are designed to enhance and optimize immune responses to provide short-term and long-term protection while maintaining tolerability and safety. Enrollment in this optimized study is now complete with 900 infants dosed. In U.S. children, VAX-31 is designed to cover over 90% of IPD and acute otitis media due to strep pneumoniae, which represents a significant increase over today’s standard of care. By the middle of this year, we expect to provide an update on our unblinding and disclosure plans for this study. Beyond our PCV franchise, you will recall that we made a decision to pause non-PCV pipeline programs last year.

I’m now pleased to share that we plan to resume development of our most advanced preclinical program, VAX-A1 our Group A Strep vaccine candidate, which is designed to provide protection in both the adult and pediatric settings. We expect to initiate a Phase I study in adults this year with the primary objective of assessing safety and tolerability. We plan to conduct a study in Australia where Group A Strep has been especially problematic and with our experienced investigator networks with expertise in Group A Strep. This approach is designed to generate high-quality initial safety data and provide a foundation for evaluating next steps in this program’s development. Group A Strep remains a major global cause of morbidity and mortality due to its wide-ranging clinical manifestations and potential for severe complications.

Group A Strep causes common illnesses such as strep throat and skin infections, but it can also lead to serious conditions like sepsis, meningitis and rheumatic fever and is a leading driver of antibiotic use, most notably in children. Each year, it’s estimated that Group A Strep is responsible for over 600,000 deaths and 800 million cases of illness worldwide. In the United States, the medical and economic impact of Group A Strep is substantial with the estimated annual healthcare and productivity costs exceeding $6 billion. This underscores the importance of advancing a preventative vaccine approach. With that, I’ll turn the call over to Andrew.

Andrew Guggenhime: Thanks, Jim. I’ll begin with a brief overview of our financial position and then touch on our public affairs and policy engagement. As of December 31, 2025, we reported $2.4 billion in cash, cash equivalents and investments. Subsequent to year-end, we further strengthened our balance sheet through a public equity offering, raising approximately $600.2 million in net proceeds. The offering further enhances our financial flexibility as we advance our adult and pediatric VAX-31 programs, continue to invest in manufacturing readiness and prepare for potential future commercialization activities. Based on our current operating plan and including the net proceeds from our recent financing, we believe our cash on hand provides runway to at least the end of 2028.

This supports execution across multiple planned clinical, regulatory and manufacturing milestones over this period. From a total spending perspective, we saw an increase in 2025 compared to the prior year, driven primarily by continued investments in commercial manufacturing readiness and advancement of our clinical programs. R&D expense growth reflected manufacturing scale-up and validation activities and late-stage clinical execution. Separately, we saw an increase in capitalized costs primarily related to the build-out of our dedicated manufacturing facility. Our full year audited financials are available in our Form 10-K filed today. Looking ahead to 2026, we expect total expenses, particularly within R&D to increase meaningfully relative to both full year 2025 and fourth quarter 2025 annualized levels.

This expected increase is primarily driven by a few key factors: first, an increase in manufacturing spend to support commercial readiness, including the buildup of VAX-31 commercial supply in advance of potential launch; and second, higher clinical spend to support a greater number and size of clinical trials with multiple VAX-31 adult Phase III studies and the Phase II infant study. Within manufacturing, there are several initiatives running in parallel, preparing for the potential VAX-31 adult launch at the current Lonza shared facility, running batches at the dedicated large-scale manufacturing suite, the construction of which has now been completed, and to a lesser extent, bringing the dedicated fill-finish facility online. With respect to capitalized costs, we expect these to trend down in 2026 compared to 2025.

As I mentioned, we have now completed the build-out of a dedicated large-scale manufacturing facility with Lonza. And as a result, the majority of the costs related to this facility going forward will be expensed rather than capitalized. Turning to public affairs and policy engagement. During the year, we formalized and expanded our efforts to engage with policymakers and public health stakeholders. This included targeted outreach to federal government stakeholders and discussions focused on the importance of science-based vaccine policy, domestic manufacturing readiness and the role of broader spectrum vaccines in reducing disease burden and healthcare costs. We continue to engage constructively with the FDA as our programs advance, and we believe the regulatory framework for PCVs remains well supported.

These engagements are focused on process and clarity, and we view them as an important part of responsible development as we move into late-stage programs. And with that, I’ll turn the call back to Grant.

Grant Pickering: Thanks, Andrew. As we close our prepared remarks, 2025 was a year of executional excellence, laying the foundation for advancement into late-stage development and continuing our transition toward becoming a commercial enterprise. The progress we’ve made across clinical, manufacturing, and commercial readiness reflects an organization that will be prepared to seize the opportunity our PCV franchise affords. We believe the breadth of this franchise, the underlying strength of our platform and our ability to deliver disciplined execution position the company well for what we expect will be a catalyst-rich 12 to 18 months ahead. With that, we’re happy to take your questions. Operator?

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Operator: [Operator Instructions] We’ll take our first question from Roger Song with Jefferies.

Jiale Song: Two from us. One is for OPUS-1, how is the study powered to show the statistical noninferiority against each the comparator independently? Just curious if FDA look at the subpopulation they want to show the noninferiority against either Prevnar 20 and then vaxive (sic) [ Capvaxive ] independently, would you be able to show that? And then the other thing is since you have — you’re about to reach alignment on the manufacturing consistent study as the last phase of — last Phase III study. Just curious what’s remaining to be discussed? Would that involve the U.S. and ex U.S. regulatory? That’s it.

Grant Pickering: Yes. Thanks for the question, Roger. The first question was about OPUS-1 and the powering. I think the first key thing to point out is that we locked down that pivotal Phase III study in consultation with the FDA. The noninferiority, you asked whether or not it was independently assessed. The way the study is set up, first of all, as it relates to the power is, we’ve already performed a head-to-head study against Prevnar 20. And so we have really good data to perform the powering to set expectations as to our ability to hit the noninferiority. We think we have exceptionally high power across the board to deliver relative to Prevnar 20. We have not performed a head-to-head study against Capvaxive. So we need to look across their own comparisons to Prevnar 20.

So we do have high confidence there as well. But as it relates to the serotype-by-serotype comparisons, the way the study is set up is such that for the 10 serotypes that are in all 3 vaccines, the analytical plan has it such that we only need to show noninferiority to one or the other to declare success. And then as it relates to the incremental serotypes, there are 10 more that are exclusively in VAX-31 and in Prevnar 20. Those will be head-to-head comparisons. We’ve already seen the results in our Phase II. We’re quite confident there. And then as it relates to the exclusive serotypes in VAX-31 and Capvaxive, there are 8 of those, and we’ve been able to look across their GMRs compared to Prevnar 20 — our GMRs compared to Prevnar 20, the magnitude of the OPA responses, the magnitude of the IgG responses, the mean fold rise over baseline.

And taken together, it gives us confidence that we’re going to see a successful result. A successful result, as we pointed out in the call today, is not perfection, right? No pneumococcal conjugate vaccine has ever had a perfect slate of comparisons to the standard of care vaccines. These vaccines are approved based on the totality of what they offer over and above the standard of care vaccines. And when we bring 10 or 11 more serotypes to the equation, totality is tilted in our favor by design. And so we believe and the FDA has told us we don’t need to be perfect. We can miss on a few. We know that we have really robust immune responses, and it gives us confidence. But we know we don’t need to be perfect. We believe even if we were to miss on a handful of comparative serotypes that would still put us in a terrific position with an approvable BLA that would have a best-in-class profile.

You also asked about manufacturing consistency. Indeed, that is the last incremental study that we need to lock down on top of the 3 OPUS studies that are already underway and enrolling. And I would say, those conversations with the FDA are moving a pace. They’re constructive. And the real key agreement that we reached last summer was the ability to advance into Phase III for which there was an exhaustive review of all of the manufacturing to date for this complex biologic. And we feel good about where we’re tracking, and we anticipate that, that study will get underway and conclude in conjunction with our expected BLA timing.

Operator: We’ll take our next question from Jonathan Miller with Evercore.

Jonathan Miller: Looking forward to the, as you say, catalyst-rich time coming in the next 1.5 years. I would love to ask, first, you mentioned the catch-up rec being possible in the adult market. And obviously, it’s in the context of PCV21, which does deliver strong results across many serotypes that are relevant to the adult market. So what do you need to show specifically versus PCV21 for that catch-up rec to seem possible to get or it seem likely to get from the ACIP? And then secondly, dose response, which you’ve shown a couple of times, looks good for many serotypes, but it’s not the same across all serotypes in those infant studies that we’ve seen. So when we think about the new dosing regimen in the updated VAX-31 infant study, what drives your confidence that the serotypes that need the additional immunogenicity boost are going to get what you’re hoping for out of the increased dose?

Grant Pickering: Yes. Jon, thank you for the question. And indeed, we’re really excited about the catalyst-rich year ahead for us starting in the fourth quarter and then into 2027 with the 3 readouts we expect then. So as it relates to the OPUS-3 study, which is the one that we’d set up for a catch-up recommendation where we’re giving VAX-31 to adults who have previously received a lower valent pneumococcal vaccine, the convention has been to run these types of studies and to demonstrate the ability to improve the responses to those serotypes for which they received vaccination in the past, so effectively see a boost to what they came into the study with after having previously been vaccinated. And then to demonstrate that the incremental serotypes on top of what they saw previously are also delivered with robust immunogenicity.

So I mean, what we’re looking to do is to demonstrate across the span of historical vaccines, inclusive of Prevnar 13, the 15-valent, the 20-valent, the 21-valent Capvaxive and then also against Pneumovax that we can expand coverage over and above what they have benefited from with a previous vaccination and potentially boost the responses to the strains they saw previously. That’s what the competitive programs have showed. That is what we would expect to show. And the broadest spectrum vaccine has enjoyed this sort of catch-up recommendation in the past, and that’s what we’ll be shooting for. One of the challenges for us is that Capvaxive is only recently on the market. So there will be fewer individuals who’ve received that vaccine, but we’ll do what we can to produce evidence to suggest that there’s a benefit there, too.

Then your question about the infant expectations, I appreciate that comment about the demonstration of dose responsiveness. That is definitely what we see in the data. There are some serotypes that are more responsive to increased doses than others. And what we’re looking to showcase in the VAX-31 data that we’ll see next year is a continued ability to demonstrate the incremental serotypes that we bring over and above the standard of care can produce that sort of expanded coverage footprint. And that has been reasonably straightforward to show based on our VAX-24 infant data and for others historically. So we have high confidence that the incremental 11 will come through over and above the 20-valent. And then as you’ll recall, the 20 for which we have compared already in the context of the VAX-24 study, most of the serotypes looked great for our product.

There were a handful that showed room for improvement. Fortunately, for us, they were key circulating strains. But what we’re looking to show is continued strong, robust responses on the serotypes for which there is the most strategic importance. Those are the strains that are circulating. And then for those serotypes where we did show room for improvement that aren’t circulating, we’ll look to recover as many of those as possible. And what we’ve done is introduced multiple doses in the context of the VAX-31 Phase II study that are using higher doses for any of these serotypes that showed room for improvement. So again, as is the case in adults, most certainly in the infant setting, we’ve seen as many as 6 missed noninferiority comparisons already in this segment.

And we’re looking to recover as many of those as possible, but we know perfection is not the requirement. So even if there were still a handful of misses at the end of the day, in the context of a 31-vallet vaccine that increases coverage from in the 60th-ish percentile of circulating disease to the 90th-plus percentile of circulating disease, that would be a huge step forward for the class.

Operator: We’ll take our next question from Salim Syed with Mizuho.

Erik Lavington: This is Erik on for Salim. Yes, just curious about the Group A Strep. I understand that it’s early yet, but just trying to think about what we might expect to see the plans for development, what other things are out there. Is there an accepted standardized standard for immunogenicity? Do you think that longer-term, all things going well with Phase I, Phase II that you might expect to run an efficacy trial for Phase III for submission?

Grant Pickering: Erik, thank you for the question. I’m going to hand it off to Jim in just one second, but I really appreciate the acknowledgment around VAX-A1. This is a program we’ve been really excited about for quite some time. It was a really tough decision to pause that program last year, but we’re thrilled to be able to guide to the initiation of clinical development this year. This is a really important vaccine. This has a blockbuster kind of profile. It’s an important unmet need in both adults and infants. So yes, I think it’s going to get substantial attention as we move into the clinic. But I want to hand it to Jim, who’s been the chief architect of this program to answer those questions as it relates to setting expectations around clinical data coming out of Phase I. Jim?

James Wassil: Thanks, Grant. Erik, our plan is to start in adults with the safety assessment. We will also be looking at immunogenicity, both IgA and IgG, we’re going to be looking at both serum and saliva to see what the responses are to our antigens. There is no correlative protection, so we will not be able to predict whether or not there is efficacy. However, what’s unique about Group A Strep is that strep throat is so ubiquitous in school entry kids that we can do a very small study, and you’re talking hundreds, maybe just barely in the thousands, and you can really get an early read on proof-of-concept even before going into a Phase III. So our intent here is to get some safety from adults as well as immunogenicity and dose-ranging analyses, move into the toddlers and then do a proof-of-concept.

Andrew Guggenhime: And Erik, this is Andrew. Consistent with prior practice, we’ve obviously guided to initiating the Phase I study this year. We’re excited about that. As we’ve noted and consistent with our prior practice, we would intend to outline the specifics of the trial design upon the commencement of enrollment in the trial.

Operator: We’ll take our next question from Seamus Fernandez with Guggenheim Securities.

Boran Wang: This is Evan Wang on for Seamus. Just 2 for me. Just one follow-up on Group A Strep. Great to see that back by the way. Just curious if you mentioned that does this reflect more of the updated financial position or any incremental confidence around either the vaccine or development path? And then on VAX-31, can you just describe some of the work with respect to the pre-commercialization planning underway now and some of the regulatory discussions around post-marketing efficacy studies? And then maybe on the post-marketing studies, just how we should be thinking about how you’re tackling these versus to some of what we’ve seen in the past from Merck or Pfizer.

Grant Pickering: Yes. Maybe I can take the second one first and then pump the first to Andrew. As it relates to the post-marketing efficacy studies for VAX-31, what we have worked out with the FDA is entirely consistent with the same agreements that were made with the currently marketed standard of care pneumococcal conjugate vaccines. So in the case of Merck and Capvaxive, they agreed to a test negative design surveillance approach where you monitor pneumonia cases in the environment to confirm that you see the amelioration of disease from your product in relation to the other products that are out there. So that’s a standard study that has already been blessed, and we will be following an extremely similar approach. So I hope that answers your question. And then, Andrew, can you address the Group A Strep related question, either you and/or Jim?

Andrew Guggenhime: Yes. Yes, sure. Thanks for the question, Evan. You may recall last year, when we announced our decision, as Grant said, difficult, but we think the right one to pause advancement of our pipeline programs in the clinic. The most implicated program of that decision was the VAX-A1 Group A Strep program. And that decision was made principally for financial reasons to extend our runway to ensure we could deliver on the key milestones for our PCV franchise, which, of course, remains the biggest value driver. And we, obviously, executed financing that closed in February of this year and in our discussions with investors and others, one of the benefits of the financing was to enable us to, again, resume advancement of the pipeline programs, and we specifically highlighted VAX-A1 in those discussions.

And so we can now move into the clinic with confidence and at the same time, preserving all the significant milestones across our PCV franchise that we can continue to deliver on with cash now through at least the end of 2028.

Operator: We’ll move next to Carter Gould with Cantor.

Carter Gould: Congrats on all the progress. Looking forward to exciting 2026. Back to OPUS-1. Jim and Grant, I appreciate your comments around the regulatory flexibility on individual serotypes. But I guess I wanted to pressure test how much that commentary should be read to extend even to scenarios around serotype 3 comparisons against PCV21 given its importance in IPD prevalence. And maybe just speak as well to the commercial importance of demonstrating noninferiority there to avoid counter detailing.

Grant Pickering: Yes. Thank you, Carter. Appreciate the question and the recognition of the moment for us. Yes, so I think the key for us is that the test for vaccines in this class is the totality of the vaccine’s contribution on a relative basis. And so in our conversation and exchanges with the FDA, we’ve acknowledged that they said in writing, we could miss on a few serotypes, and that was without designation. So there isn’t a serotype that would be a disqualifier. Now that said, I can completely appreciate why you’re raising serotype 3. It is the outlier in the entire pneumococcal space. It is an infuriating serotype that despite its inclusion in the marketed pneumococcal conjugate vaccines for now over 15 years, it continues to be the top circulating serotype.

And the reason for that is, unfortunately, none of the vaccines have produced a magnitude of antibody responses that can keep that particular serotype in check. This is a complete outlier relative to the remainder of the serotypes that have been included now up to as many as 21. And our objective is to include that up to 31 soon. So yes, serotype 3 is just the total outlier. And even though there have been some of the vaccines that have been able to show higher serotype immune responses relative to others, unfortunately, they’re all still well below that protected threshold. So we’ve seen this play out already. When the 15-valent from Merck came out, they had higher immune responses to serotype 3, but the reaction from all the key decision-makers was, well, better to have more, but not enough for it to be meaningful.

And so that is the reality of where we find ourselves is in a situation where no one has been able to produce meaningfully different antibody responses that anyone thinks would produce a better outcome, unfortunately. So serotype 3 has not proven to be a differentiating feature for anyone. And we already have our serotype 3 responses. Ours looked better than Prevnar 20, both in the adult setting for VAX-31 as well as for VAX-24 and in the infant setting for VAX-24. So we know we’re on the right track, and we’ll have to see what ultimately our immune responses look like in a direct comparison to Capvaxive. But ultimately, it has not proven to be a benefit to the products that have had slightly higher immune responses. So we do not expect that to be a competitive differentiator coming out of these studies.

Operator: We’ll take our next question from Jason Gerberry with Bank of America.

Dina Ramadane: Congrats on all the progress this quarter. This is Dina on for Jason, by the way. I guess, maybe just a follow-up on the prior discussion of the various OPUS-1 data scenarios. You’ve kind of outlined a clear base case in order to kind of clear the regulatory bar for approval. Curious, in your view, just maybe thinking about the future competitive landscape, what is the bull case on data? Is it hitting statistical superiority on a certain number of strains or statistical superiority on some high-priority strains? And then just a quick one on VAX-XL. Can you talk about where this program just kind of generally sits in terms of development? If you felt compelled to advance it, how quickly could you move it into the clinic?

Grant Pickering: Well, thank you for those questions, Dina. Thank you for being a pinch hitter for Jason. So the first question as it relates to OPUS-1, I’m glad the base case is clear, and thank you for asking about the upside case. I mean, the first thing to emphasize is that coverage is king in this class. We’ve seen it over and over and over again, and we’re seeing it playing out once again. Even in the context of Capvaxive relative to Prevnar 20, which are the 2 currently recommended vaccines for adults, Capvaxive is obtaining market share at a really rapid clip based on its coverage advantage, and yet it has this Achilles’ heel of not covering 10 of the historically circulating serotypes, a couple of which are still circulating significantly.

So we think we have an opportunity to once again prove that coverage is the key adoption feature, and we’ll have an improved coverage advantage that exceeds what has turned out to be a substantially winning strategy for others in the past. So coverage, coverage, coverage. But then as it relates to superiority on a relative basis for immunogenicity, that is something that we haven’t really seen much of in this class. The only example of that ironically was with serotype 3, and it was a really difficult uphill climb to use that to their benefit because even though they were statistically higher, and this is kind of consistent with what I was saying in the last response, that serotype statistically higher immune response that was in the case of one product, it didn’t turn into a competitive advantage because everyone acknowledged that while statistically higher, it was not clinically meaningful for a serotype that continues to circulate in earnest.

So that’s the only example we have to look at, and that was a single serotype for a broad-spectrum vaccine. We have an opportunity to potentially have a different set of arguments. Obviously, we have the Phase II data relative to Prevnar 20, where we showed consistently higher immune responses across an array of the common serotypes along with an incremental 11 serotypes on top of their 20. So I think it’s a very different set of arguments when you’re combining coverage and improved immune responses. So as you may recall, in our Phase II study, 18 of the 20 common serotypes we were directionally higher and 7 of those 20 had statistically significantly higher immune responses. So I think it is a different set of arguments when you’re combining coverage and a broad array of improved immune responses.

And of course, this is in the context of the historical trade-off where you’re training coverage for lower immune responses. So we’ve really flipped the script on being able to have the opportunity to demonstrate both. So yes, I think we’re incredibly confident that coverage will carry the day, and then we’ll see how much improved immune response may or may not further the advantage as the data comes into focus. Now you also asked about VAX-XL. That’s our third-generation broader spectrum vaccine over and above the 31 serotypes in VAX-31. This is a life cycle management strategy. As we’ve said, when you have a vaccine like VAX-31 that covers 95% to 98% of the circulating disease in the U.S. and in Europe, respectively. There really isn’t enough headroom to warrant bringing out a third-generation vaccine just yet.

But the reality is that serotype replacement is a key phenomena in this class. And we believe that with the utilization of VAX-31 broadly, we will begin to see serotype replacement from those very modestly circulating serotypes today to something more significant. And in that regard, we want to have the readiness to expand coverage over and above the 31 in order to produce the most beneficial vaccine societally. We also want to make sure that we continue to flex a coverage advantage relative to any potential competitors. And yet in this moment, it’s really more about preparedness and identifying those serotypes for which may circulate and having readiness to add them on top of VAX-31 to have this third-generation program move forward into the clinic in earnest at the appropriate time.

Operator: We’ll take our next question from Tara Bancroft with TD Cowen.

Tara Bancroft: So I feel like we have a pretty good grasp of data expectations, your regulatory commercial readiness. So I kind of want to ask something more qualitative, perhaps your thoughts on OPUS-2 and -3. Between those, I’m curious to hear from you guys, which of these do you find more or really the most meaningful in the commercial setting and why? And how could these specifically impact an ACIP recommendation beyond the OPUS-1 data?

Grant Pickering: Thank you for that question, Tara. I always appreciate you being a student of the vaccine space. So yes, I think for OPUS-2 and OPUS-3, each of these studies will contribute meaningfully to the overall BLA package. First of all, they’re going to help us round out the safety database to ensure we get enough adults exposed to VAX-31. But then each of them provide their own additional elements to the set of arguments that we want to make, both in the context of the BLA, but then also in the context of the recommending bodies as they determine how to slot VAX-31 into the schedule. And so OPUS-2 and its examination of concomitant vaccination with flu vaccines and with VAX-31, it’s important. Pneumococcal conjugate vaccines are given only so often versus flu vaccines that are given annually.

So I think it will be helpful, but I wouldn’t call it instrumental. I do think the OPUS-3 study is perhaps a more strategically important outcome. And when you think about the context of a potential catch-up recommendation, where we’ve had adults now vaccinated in earnest in the United States for 12 years, you have an entirely massive potential catch-up population of individuals who have received lower valency vaccines. And that could create a really large bolus market that we would work through over many years to give as many people the benefit of the breadth of coverage that VAX-31 could provide. So yes, if I had to pick 1 of the 2, I think it’s OPUS-3 that could unlock the most commercial potential for the company.

Tara Bancroft: Okay. Great. And I also — I have to say, specifically to Jim, I’m very happy for you guys that you have strapped back.

James Wassil: I appreciate that. I’m really pleased that we can start this program again.

Operator: We’ll take our next question from Asad Haider with Goldman Sachs.

Asad Haider: Congrats on all the progress. A lot of mine have been answered already. Just 2 quick ones. First, just on the infant program, what factors are you considering in whether to announce the infant data either sequentially or together? And maybe just talk about the pros and cons of each approach. And then on the competitive front, as you look out over the PCV competitive landscape, what are the key developments that you’re monitoring? And how can you ensure your lead longer-term?

Grant Pickering: Maybe I’ll take the competitive landscape question and then hand the question about the trade-offs to Andrew in just a moment. So yes, I think as it relates to the competitive landscape, Asad, we’re in front, right? We’ve got 2 vaccines that are the standard of care today. One is a 20-valent, the other is a 21-valent. Our 31-valent is in the midst of its Phase III program, as we’ve discussed. The only other 30-something that’s out there is the program that we’re aware of from GSK. They’re in Phase I. They just announced today the initiation of a second Phase I study on top of the Phase I that they started last year. Apparently, it’s a new formulation. We don’t really know much more than that. But I think their expectation is to hope to have Phase I safety data by the end of this year.

And of course, we’re anticipating having the outcome of our pivotal Phase III foundation of our BLA filing by the end of this year. So I think we’re comfortably in front with a technology that is much more based in certainty. And then, of course, Pfizer and Merck have their own programs. We’re not aware of any further development in the adult side from Merck. We are aware of the program that Pfizer has in Phase II, which is a 25-valent vaccine. And as we understand it, there are as many as 15 different formulations currently in Phase II for that program. So it sounds like they’re still working it out. So of course, we’re watching everybody, but those are the folks that are at the top of our list. And then Sanofi has a 21-valent infant program.

It did not work in adults, but they did proceed with the 21-valent in infants. So yes, I mean, we’re obviously trying to keep our finger on the pulse of everyone who’s working in the space, but that’s the landscape as we see it. Andrew, do you want to comment on the first question?

Andrew Guggenhime: Yes, sure. And thanks for the question, Asad. And just to set the context, as we’ve said, right, the current disclosure is that we would announce the PD3 and PD4 data either sequentially or together by the end of the first half of next year. And the real question that we are interrogating is whether there are any operating benefits to unblinding the PD3 data in advance. And of course, if we can blind it, we would announce when it’s a reality. And those potential operating benefits we’re interrogating would be, would it enable us to engage with the FDA earlier in an end of Phase II meeting? Would it allow us to initiate a Phase III program sooner. So that discussion is still underway internally. That’s the primary driver of our decision here. And as we’ve noted, we expect to provide an update on this and kind of declare what our plan is by mid this year.

Operator: We’ll move next to Tom Shrader with BTIG.

Thomas Shrader: It’s certainly going to be an exciting 18 months. I have a kind of a question on OPUS-3. Is that the same format as Merck’s equivalent STRIDE-6? And I guess what motivates the question is if you’re looking at the relative boost of 2 different vaccines with people who have had a prior PCV maybe a year before, maybe 10 years before. I’m just wondering if the final immunogenicity is so broad that it’s going to be hard to say anything. So I guess the question is, did Merck run the same trial? And is the trial tricky because of that big window of how long they had a prior PCV?

Grant Pickering: Yes. Yes, Tom, thank you for the question. I’ll tag team this one with Jim. But indeed, both Pfizer and Merck have run similarly designed studies as ours. Ours is of similar size in terms of enrollment and similar design, but not precisely the same. I would say your question is an interesting one as it relates to the duration between vaccinations. It was interesting, the Pfizer study, they did present the baseline presentation immune responses, which was helpful. The Merck study did not include that, at least in the published findings. So we didn’t get the benefit of that particular effort to look across the magnitude of immune responses based on which vaccine and how long ago they received it, but we did see some of the data from Pfizer. So I just wanted to acknowledge that first part. Jim, any other comments? I don’t recall if STRIDE-6 was the name of their study or not, but what would you have to say?

James Wassil: Yes. No, what I would comment is, I think you’re absolutely right, Tom, that there’s a lot of heterogeneity here. What we want to show is that if you give up VAX-31 that you don’t have what’s called hyporesponsiveness, which is a reduction in the immune response with subsequent exposures to your vaccine. Now that has been seen with people who receive Pneumovax, which is the polysaccharide-only vaccine. It has not been seen in this category with PCVs, the conjugates. So our goal is to show that we can expand coverage for these other vaccines, give them the extra coverage that whichever vaccine — 13, 15, 20, 21 that they would be getting and not have any hyporesponsiveness. And I think if we achieve that, then we can go forward and work with recommending bodies to see if we can get a recommendation for a catch-up or an expansion for those who have been previously vaccinated.

Thomas Shrader: So if you get more breadth, the bar for common serotypes is just be no harm. Is that?

James Wassil: That has been the case historically. And like I said, when you had Pneumovax and then you got a PCV, you did see some reduction in diminution in the immune response, but you haven’t with PCVs. So I think that’s the bar we’re hoping to achieve.

Operator: [Operator Instructions] We’ll move next to Joseph Stringer with Needham & Company.

Joseph Stringer: You commented that FDA has historically required greater than 3,000 patient exposures from a safety database perspective. It sounds like you’ll have more than that in total from your Phase III trials. Could you just characterize how your conversations with FDA have gone on the safety database requirement and your level of confidence that having at least 3,000 would be sufficient? Any additional color on this would be helpful.

Grant Pickering: Yes. So we have been aware of the 3,000 minimum standard for quite some time. We have not seen a shift in that thinking. We have initiated these 3 OPUS studies on the merits and in order to not only meet the minimum exposure for VAX-31, but to also set us up to have the ammunition to make that best-in-class set of claims. So I think our view is that it’s been a consistent request and really not sure I have anything to add on top of that. Jim, would you add anything?

James Wassil: No. I think historically, there’s been 3,000 subjects exposed. And yet, like Grant said, we’re going a little bit above to make sure we get a really robust label. And I’ll leave it at that.

Andrew Guggenhime: Yes. I would just say this is one of the — this is Andrew, one of the many components of the protocol that was developed in alignment and consultation with the FDA.

Operator: [Operator Instructions] And we’ll take our next question from David Risinger with Leerink.

Unknown Analyst: I’m [ Edward ] calling in for David Risinger. So just a quick question on PCV uptake for those who are like 50 years old and above. What is the current trend right now?

Grant Pickering: Yes. Thank you for that question, Andrew (sic) [ Edward ]. I think I will turn that one over to our Chief Commercial Officer, Mike Mullette, who is with us. Mike, do you want to comment as to what we’re seeing with regard to uptake of pneumococcal conjugate vaccines now that the age has been reduced down to 50 and up from 65 and up?

Mike Mullette: Yes, sure. So first of all, thanks for the question. It’s I think, a really exciting time and opportunity for commercialization of VAX-31. So we’re getting ramped up and ready to go. Some positive signals we’re seeing in the marketplace already. Obviously, the drop to 50 to 64 is progressing. We start to see both Pfizer and Merck sales in the segment account for immunizations in that age group, 50 to 64. I would say that in some ways, those immunizations were probably lower this year because of the lower influenza vaccination rates over the course of Q4 of this year. So we’ll continue to monitor those and see how they progress. Also, I would say, encouraged to see the market share that Capvaxive has been able to achieve, again, solidifying this market dynamic of shifting from lower serotype vaccines to higher serotype vaccines.

We continue to see Merck report strong earnings in the United States and strong market share figures, targeting in the high 30s, low 40s, depending on the segment of the market that we saw last year. So we’ll continue to follow that trend as well, which we see as a supportive signal for the market likely moving to VAX-31 in the future. We also, I would just say quickly are encouraged by the uptake internationally of some of the adult vaccination programs in European countries, Japan, Canada, where Merck and Pfizer continue to make inroads in driving adult immunization in the pneumococcal space, which, again, we hope to follow on with the licensure of VAX-31. So I would say really positive and encouraging signals so far from the market, and we’ll continue to keep everyone updated as we progress with preparations.

Grant Pickering: Excellent. Thank you, Mike. Yes, I think I would just want to caveat that the U.S. is a bit of an outlier making the universal recommendation for adults 50 and up. While the international adoption is increasing at a terrific rate, most of the major developed countries have now made recommendations. They’re sticking with a slightly older age group, more like 60 and up and sometimes 65 and up. But these are countries for which there was no universal recommendation. So it’s really leading to a substantial increase in the overall opportunity for pneumococcal conjugate vaccines in adults. And Mike, thank you for bringing that up. And Edward, thank you for the question.

Operator: That concludes today’s question-and-answer session and also concludes today’s Vaxcyte fourth quarter and full year 2025 financial results conference call. Please disconnect your line at this time, and have a wonderful day.

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