Good morning and welcome to the Moderna's Third Quarter 2019 Conference Call. At this time, all participants are in listen-only mode. Following the formal remarks, we will open up the call up for your questions. Please be advised that the call is being recorded. At this time, I'd like to turn the call over to Lavina Talukdar, Head, Investor Relations in Moderna. Please proceed.

Thank you, operator. Good morning and welcome to Moderna's third quarter 2019 conference call to discuss business updates and financial results. 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. Today on this call we have Stéphane Bancel, our Chief Executive Officer; Tal Zaks, our Chief Medical Officer; Stephen Hoge, our President; and Lorence Kim, our Chief Financial Officer. Before we begin I would like to remind everyone that this conference call will include forward-looking statements. Please see slide two 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 developments or updates. I will now turn the call over to Stéphane. Stéphane Bancel: Thank you, Lavina, and good morning, everyone. We are committed to building mRNA as a new class of medicines with Moderna positioned to remain the leader in the field. As you know, we believe our mRNA medicine have a potential to help patients by addressing large unmet medical needs and treating diseases that are not addressable by recombinant proteins or small molecules. Due to the platform nature of mRNA, we believe mRNA medicines provide a higher probability of technical success and faster timelines to clinical trials compared to traditional medicines. We also believe that the manufacturing capital intensity of mRNA is materially lower of a recombinant protein and the cost of manufacturing at commercial scale will be similar to small molecule injectables. We continue to focus on managing risk across the portfolio, especially technology…

Thank you, Stéphane. We're advancing our pipeline of medicines in six different modalities. So let me start with the prophylactic vaccines where we've treated over 1,000 healthy volunteers across seven programs to-date. We're pleased with the emerging consistent safety and tolerability profile and of course with the repeated demonstration of peptide immunogenicity, which we had expected based both on the fundamentals of expressing a viral antigen using our body's own cells and the wealth of preclinical data that continued to translate well in the clinic. The CMV Phase 1 success is the latest addition here. These data have exceeded our expectations. But before I review them, let me first briefly update you on other progress. Both the RSV and Zika programs continued to dose patients in their respective Phase 1 studies. For Zika, we also presented preclinical data at the International Society for Vaccines conference in late October, where vaccination with mRNA-1893 was shown to be fully protective at the lowest dose tested. On the hMPV/PIV3 program, I'm pleased to report that the age de-escalation study as Stéphane noted has started with the first subject dosed. We also presented 7-month immunogenicity data at Infectious Disease Week in October. And finally, with our chikungunya vaccine program, we continued to see good durability with 78.6% of the subjects seropositive to chikungunya virus at 12 months post vaccination. So let's get back to CMV. CMV is a common pathogen that is a member of the herpes family of viruses. And like other herpes viruses, it's a lengthened virus, which means once we're infected it's for life. The largest associated with CMV is birth defects and disease in babies born to mothers who are infected during pregnancy. The burden of disease is significant with approximately 25,000 newborns infected each year and is infected each…

Thank you, Tal. In today's press release, we reported our third quarter 2019 financial results. Please note these results are unaudited. We ended Q3 2019 with cash, cash equivalents and investments of $1.34 billion. This compares to $1.69 billion at the end of 2018. Net cash used in operating activities was $363 million for the first nine months of 2019 compared with $240 million in 2018. And cash used for repurchases of property and equipment was $25 million for the first nine months of 2019 compared to $92 million in 2018, which was the first year that we put our Norwood manufacturing facility into service. Now recall that on January 1, 2019 we adopted the mandated revenue recognition standard ASC 606 using the modified retrospective transition method applied to those contracts, which were not completed as of January 1, 2019. And so the decreases in total revenue for Q3 and for the first nine months of 2019 compared to 2018 were mainly attributable to the adoption of this new revenue standard. Revenue for Q3 2019 was $17 million as compared to $42 million for Q3 of 2018. And for the first nine months of 2019 revenue was $46 million compared to $100 million in 2018. Total revenue under the previous revenue recognition standard would have been $25 million for Q3 2019 and $80 million for the first nine months of 2019. R&D expenses for Q3 2019 were $120 million compared to $109 million for Q3 2018. For the first nine months of 2019, R&D expenses were $379 million compared to $304 million in 2018. The increase in Q3 and for the first nine months of 2019 compared to prior year was mainly driven by an increase in personnel-related costs including stock-based compensation with additional increases for the first nine months…

[Operator Instructions] And our first question comes from the line of Matthew Harrison with Morgan Stanley. Your line is now open.

Great. Good morning. Thanks for taking the question and thanks for the detail on the update here. I guess two parts for me. So first, could you just talk about the progress in being able to enroll patients in MMA? I think you've had sites opened for a bit of time here and now you've been able to expand the age group but it doesn't sound like you've enrolled a patient yet. So maybe you can just talk about what's going on there? And then second on, chikungunya maybe just talk about when we should expect to see some information about dosing profile and if you're able to drive dose higher with premedication or split dosing?

Thank you Matthew. This is Tal. Let me address both of your questions. You're right on MMA. We have not yet dosed our first subject. We as noted initially FDA had requested that we limit the first three subject to ages 12 and above and before we can proceed to the children that are young as – as young as one year old, where the highest unmet need is. And I think we found in opening the sites and trying to enroll this that there are several factors that come into play. By the time somebody gets to be an adolescent, if their disease has been severe they've often had a liver transplant. In fact liver transplants in the U.S. are recommended between the age of a 1 year in preschool. And when a kid with MMA shows up for liver transplant they move to the top of the queue, so there's not much waiting. Those who don't get a liver transplant often suffer from kidney deterioration and do a Phase I trial with really abnormal kidney function. So we have gone back in the summer as noted to discuss with FDA, lowering the age criteria. They had agreed to take it down to the ages of eight and above. And while we're still in dialogue with them about that the amendment to enable us to do that has just recently opened at some of the leading institutions. And I look forward to enrolling the first subject soon. It has been a challenge for all those factors that I alluded to. But I think between lowering the age and now being open at some of the select institutions we should see progress soon. Now you'd asked me about the chikungunya and when do you expect to see data? This is a healthy volunteer trial. So we had gone back to the safety monitoring committee aligned with them on the next steps and we're actively working with the site to get the next cohorts enrolled. So as soon as data will become available and we understand what it is, we have we'll be sharing it with you. Being a healthy volunteer trial it should move relatively quickly.

Thank you. And our next question comes from the line of Ted Tenthoff with Piper Jaffray. Your line is now open.

Great. Thanks for the update and all of the great progress. I want to ask about the CMV vaccine, really just get a little bit better clarity on what you see as the path forward here, appreciating a Phase II dose confirmation start next year. Can you give us a sense of the size of that study and maybe how long it would take? And then looking kind of forward how soon do you think you could actually initiate pivotal studies in women of childbearing age?

Thank you, Ted. This is Tal. I'll take that question. So a couple of points. First in terms of size and timing, the Phase II is about 250 subjects or so. The design is really meant to confirm the dose and give us more color on both immunogenicity and safety and tolerability, so that we are able to pick the right dose for Phase III. That being said, the time should be relatively quickly because the -- we'll make the decision based on a 3-month endpoint once everybody has been dosed similar to what the interim data that we've shown in the Phase I. By then we will have the further follow-up post the third dose in the Phase I, so we'll have overall more data to be able to share and substantiate that decision. Now the path to Phase III I think the big change here for me has been the fact that FDA has provided guidance that speaks of the potential for licensure based on the prevention of primary infection. And that's very significant because that means that it is imminently doable with the trial of the size that we've discussed. In terms of launching that, I would say the two gating factors that I think to actually launching that study are going to be the Phase II data and some regulatory discussions. This was just very preliminary initial guidance of course before one launches a Phase III trial here, we'd need to have those more deep discussions with FDA and other agencies to make sure we're launching the right study. Now once we get their agreement, I think the design is fairly straightforward, one would expect an incident rate of about 1.5% a year. So hopefully with a couple of years of follow-up once everybody is enrolled, you could see the effect that you're looking for and wrap it up. So that gives you a rough sense of the overall time line here.

Great. That's super helpful. And then if I may just ask a second question. Appreciating that it's with Merck, when could we get data from the enhanced RSV vaccine? Thanks so much.

Yes. That's a great question. I ask it as well. The truth is that they are pretty efficient in running these trials. They've got a long track record of running a healthy volunteer vaccine trials and of analyzing data quickly. So as soon as they have something material to share with us we'll of course share it with you.

Awesome. Thanks so much guys.

Thank you. And our next question comes from the line of Salveen Richter with Goldman Sachs. Your line is now open.

Good morning. Thanks for taking my questions. Maybe a first question here on how your chikungunya vaccine clinical development plan reflects the guidance that was provided by the FDA. And then a second question on the chikungunya antibody program here. Could you just walk us through your plans for evaluating repeat dosing recognizing that you do have this cohort study coming up with two doses about a week apart?

Thank you Salveen. This is Tal. I'll take that. So the plan to develop a chikungunya vaccine is a great question. It's true that FDA is giving a potential path. In fact, there's a big discussion in a couple of days time down at FDA where our team is presenting alongside others to flesh out what that could look like. To-date, it hasn't been clear how one could develop it and do it in a commercially viable setting. To the degree that the discussions with the agency in the near term will actually paint a path where it would be worth our capital and time to go there we'll obviously be looking at it carefully. So I don't have a clear answer because I think this is a work in progress. To date, we've not seen a commercial path. I'm happy with the recent agency guidance and we'll see how the conversations go. Your question on repeat dosing for the monoclonal antibody program. The goal really here is to substantiate our ability to stack pharmacology. In other words to show that the antibody level, the protein level production of two doses given a week apart behave as expected in the clinic. We have seen that in the preclinical toxicology in the nonhuman primate. But I think being able to show that and leveraging the fact that the adverse event profile seems to be a very quick infusion-related reactions that come on quickly and come off quickly, we would expect that there would -- there should not be any stacking in terms of safety, while there would be stacking in terms of pharmacology. And that's the rationale of doing two doses one week apart at a dose where we actually have not seen any significant adverse events. Did that answer the question?

Yes. That was helpful. Thanks.

Thank you.

Thank you. And our next question comes from the line of Cory Kasimov with JPMorgan. Your line is now open.

Hey, good morning guys. Thanks for taking my questions. So two as well. So first is just following up on CMV. And as you get the Phase 2 sites up and running and plan for your Phase 3, are there any additional processes or challenges we should be thinking about given the new modality you're introducing? Or is this something that you think you can go pretty quickly from a patient accrual point of view? And then my second question is just regarding your natural history studies for MMA and PA. What's the age range you have there for the natural history? And do you think that provides any read-through to how enrollment might go once you have a broader age range introduced for your clinical trials? 87 subjects at this stage, it seems like a pretty decent number for rare diseases? Thanks.

Thank you, Cory. It's Tal. Let me take those two in sequence. I don't foresee any additional challenge for enrolling the CMV out of the Phase 2 or the Phase 3 that are platform-dependent. And I'll sort of give you the two reasons for that. The first is the totality of safety and tolerability data that we've seen across the portfolio are consistent with what one would expect. We haven't seen anything surprising. There's no scientific reason to expect anything untoward and we haven't seen anything untoward in preclinical. So I think this is going to be a vaccine platform that will behave as such. In fact, the CMV data suggests that the more potent the vaccine is, the more adverse event you get there were flu-like symptoms. But the adverse event the type of adverse events as I've noted is what you'd expect. I think the other reference point is the fact that this is -- the platform as a platform is no longer considered as an adjuvanted vaccine by the agency. And I think that is also reassuring in that respect. So I don't see any hurdles that are a function of the platform to enrolling CMV or getting in the market frankly. Your question about the natural history study is a good one. You're right. I was pleased by the rate of enrollment and the numbers that we've gotten there to date. The age distribution is pediatric. We are seeing I think a median age of around five to eight roughly speaking, looking at the totality of the data so far. It is providing us I think good information as it relates to the variability, the biomarkers, the clinical endpoints all the things we've expected to see. And I think it is substantiating our sense that the older the children are at least those that are found at any given time points in terms of prevalence, certainly in the U.S. tend to have either undergone transplant or have deteriorating kidney function. So it all -- it is very coherent I would say overall with what we're seeing in starting up sites now in trying to enroll the first subjects into the MMA trial.

Okay. That’s helpful. Thanks, Tal.

Thank you. And our next question comes from the line of Alec Stranahan with Bank of America. Your line is now open.

Hey, guys. Thanks for taking my question. So on the ongoing follow-up from the Phase 1 trial of the personalized cancer vaccine. I appreciate that the objective of the Phase 1 is primarily to assess safety and immunogenicity. But do you intend to present any outcomes-type data from the study beyond immunogenicity, say with this next six months? Or will we need to wait on the Phase 2 study for this sort of analysis? And then on the KRAS vaccine, is this something that Merck will report since they are the ones leading the study?

Hi, Alec it's Tal. So yes, yes to both questions. The Phase 1 PCV data, we will share that data once we've got a sort of a cogent totality of it. Every Phase 1 or every clinical trial that we do as a matter of policy and ethics in the company we will publish and this is no different. So at the next opportune moment when we have a body of evidence there we will share it, including the totality of the clinical data. And in fact, I think it is the clinical data that is important to me and I think the rest of the world to assess activity here. In that regard, recall that one of the cohorts there is testing patients with previously refractory to PD-1 inhibitor and so I think that will be meaningful data once we have it. KRAS, you are correct. Merck is running it. And so Merck will be I think the party reporting out the data and I look forward to that as well.

Okay. Great. Thanks. And I had one more question if I may. So I noticed that the follow-on Phase 1b for the hMPV/PIV3 vaccine was posted at ct.gov last week. Now looks like you've dosed the first patient in the study. So a few questions. What kind of safety metrics are required for gating between the adult and pediatric cohort? What dose levels of the vaccine will be included in the study? How quickly do you foresee the study completing? And from your conversations with the FDA, do you have a sense of potential registrational path following the study? Thanks.

Those are great questions. Let me answer them in turn. The safety metrics are your typical vaccine safety metrics, so you look for safety tolerability. And we have a safety monitoring -- an independent safety monitoring committee that reviews that and we've actually had our recent inaugural meeting with them. And so, it won't be just us making that. We've got some of the world's experts in this, actually looking over our shoulders and helping make those decisions. The dose level honestly on the top of my mind, I don't remember. It's the honest truth. I'm happy to get back to you. If it's not on the trial let's double check that. The path to approval, that's a great question. I think as we had -- as disclosed in the past, we had an initial interaction with the agency. We had a Type C meeting in response. And we had a line of sight to the possibility to have a pivotal trial that would test both viruses together. So, roughly speaking the path there is demonstrate safety in the seropositive toddlers and then go on to a larger Phase 3 study that would demonstrate efficacy in seronegative toddlers, because remember we're trying to establish immunogenicity from before anybody has been exposed. And so I can't give you a clear time to completion. And as with CMV before one goes into a Phase 3 trial, we're going to have to have more in-depth discussion with the regulatory authorities before we do that.

Great. Thanks for the color.

Thank you. And our next question comes from the line of Hartaj Singh with Oppenheimer. Your line is now open.

Great. Thank you for the questions. I just want to ask one question about an asset that you got the furthest along AZD8601. I know that's in partnership with AstraZeneca, the CABG study. I mean that's when you're treating patients for almost about a year and half now. Just any thoughts there? And could -- with the readout of this Phase 2 basically a study could A, move that along faster or into a pivotal clinical trial? So any thoughts there? And then I just have a couple of quick follow-ups.

All right, Hartaj. It's Tal. Let me take that. Two points on that trial. It is -- I mean to give AZ credit, they've designed a very informative pharmacology trial because they're using sort of state-of-the-art as you may recall oxygen labeled CAD imaging to really very finally map the heart and the areas at risk. Now the challenge for them has been that the half-life of that isotope is extremely short and so you have to find a hospital that basically has a cyclotron next door. And so what they've done, I think in this past year has been to go and find additional sites where they can launch that trial. So they're now open not just in Finland as they were but actually in Germany and in the Netherlands and are actively looking for patients. The good thing about that trial is that the endpoint once they enroll the subject should be relatively quickly because it is a six months endpoint. And the trial overall is not very large. I think that's as much insight as I have in terms of enrollment. Could they move faster? I think there are other ways that one could think of how you would develop an intracardially injected molecule. They've got a ton more expertise in this space than I do and they're actively thinking and working along those fronts. But frankly I'd have to defer to them to give you more color on what that could look like. And I think you had a few follow-ups. Yes.

Yeah. A quick one, I'll just mention them quickly. I know you had mentioned that the seropositive patients there's -- the data seen in those in the CMV trial that had not been seen previously in other trials. For your Phase 2 and your Phase 3 will you stratify by seropositives? And could those be a group that you could get approval just on their own? Just any thoughts there?

Yeah. So a couple of thoughts. I think the fact that one sees this effect on seropositives, I think is really scientifically interesting and I've got a deep curiosity to try and figure out where it could translate to benefit. That being said, in terms of enrolling on the Phase 3 and the eventual label, I'd make two points, one I think the Phase 3 will be focused on seronegatives because that's where you can see the obvious effect of preventing infection. It's hard if not impossible to actually demonstrate a clinical benefit in the seropositive, although of course I remain intensely curious about that. The second point to note is that FDA in their response had told us that they understand that one is not expected to demonstrate the benefit in seropositives. But in order for this vaccine to be viable in terms of access to patients and having an impact on the population, you would need a label that would encompass both populations. So the expectation is that we would demonstrate immunogen -- I'm sorry prevention of primary infection in the seronegatives, but we would demonstrate safety and tolerability in the entire population that is all-inclusive of seropositives and that could lead then to a label irrespective of sero status. Does that answer your…

That's great Tal. Yeah, great. Thank you.

Thank you. And our next question comes from the line of Yasmeen Rahimi with Roth Capital Partners. Your line is now open.

Hi, Tal, thank you for taking our questions. Questions are all around PA. Congrats on recently receiving fast track designation. So the first one is for you, can you tell me when you're thinking about dosing strategy for MA -- I'm sorry PA, how it will differ from your strategies in 3704? And then when we think about sort of key PD biomarker, what key biomarker in your view proves established proof-of-concepts? And then part three of the question is, what do we know from the literature in regards to what level of expression of PCC one needs to achieve to provide therapeutic benefit?

Thank you ,Yasmeen. Great questions. Let me take them one at a time. The dosing strategy is roughly similar to what we expect to see in MMA. It is based on our translation of the preclinical data. We've done long-term models in animals and have used that to extrapolate. So far the technology has extrapolated nicely from all the preclinical species in the various modalities. And so I would expect this one to be similar. So, I expect the dosing strategy to be once every two or every three weeks. So, I think we're going to have to define that and see the effect we have on Phase I. There is a whole slew of biomarkers here that one looks at and I think it's premature to specify which one is going to be the one. It is true. I think what you're indirectly alluding to is that the biomarkers on PA are not maybe as clear-cut as they are in MMA. I think that remains to be proven. I think, the information we hope to achieve from the natural history study in terms of biomarker levels where we're collecting it should also be informative. So, I mean we'll continue to update that as we learn more. I think our understanding of the literature and of our natural history level here is evolving. In terms of the level of expression needed, I think it's hard to quantify. What we've seen from our preclinical models suggest that it is a similar level that we need of MMA in order to have the effect in the mice be effective as profound in the PA models as it is in the MMA models. And so, we expect a similar dosing level to be required for both. It may be a little bit higher given that in PA we are encoding for two proteins, not one, right? So, on a model basis, we would expect similarity on a mg per kg. It may be a tad higher, but it's clearly within the same ballpark.

Thank you. And then if I may have a quick follow-up in regards to the antibody against chikungunya. And we're excited to see the data from the two doses of 0.3 mg per kg. How far out are you going to assess safety? So, what are you planning to do? And what has regulators asked you to do?

Just to clarify the question. You are asking how far are we looking at safety?

Yes. Yes. Just monitoring the safety, since you're giving for the first time two doses. How far out will you actually monitor these patients and therefore will provide for us the safety results?

Several weeks I would say. I don't think it's going to be much longer than that. The reality is you've seen the adverse event profile to-date. It really is a function of the LNP as I understand it more than the protein that we make. We'll be continuing to follow these patients -- I'm sorry these subjects for weeks, but I've not seen anything that leads me to expect that there's a long-term challenge here. I think the safety profile within a week we'll describe what it is.

Thank you.

Thank you. And our last question comes from the line of Alan Carr with Needham. Your line is now open.

Hi, thanks for taking my questions. Can you give us an update on where the other rare disease programs stay? And might those be a little bit easier to enroll? And then also, do you have any update on AZ's program with Relaxin?

Yes. So this is Tal. Let me take them. They're in their preclinical phases. Once we file the IND and we get rolling, we'll update you accordingly. And I think, we don't typically comment on where exactly in the early research space they are. I think the same holds true for Relaxin which is partnered with AstraZeneca.

All right. And then, you also mentioned in the press release some interest in more partnerships and that sort of thing. I was wondering if you were getting at more in terms of with academic institutions or talking about partnering programs with pharma and that sort of thing. Stéphane Bancel: Yes. So, thank you. This is Stéphane. So, I mean if you look at the company history, as you know we have done a lot of partnership. On the last 12 months, you might have observed we have been quiet a lot of issues because we are very busy. We're preparing the IPO and then spending a lot of time on the road as a newly public company. But if you look at what the team has achieved and what we believe a platform can provide in term of new medicines for patients, we have a primal abundance which is a wonderful point to have in this industry. And so, we think that we cannot take all the drugs that are coming from Stephen's team on the platform into the clinic by ourselves. And so, we will continue to have dialogue with biopharmaceutical companies. If you look at the company history, we work around the clock there of our capital since inception of the company through partnerships. And we think this is a wonderful way to tap capabilities that we don't have to tap capital that we don't have and to just increase the opportunities of getting Moderna's mRNA medicines to patients and to a finish line. And so, we anticipate to continue to have new partnership set up in the quarters to come.

And what's the profile of programs that you might partner versus keep in-house when you're looking at this? Stéphane Bancel: So, I mean speaking to what we have done before is looking at where do we have expertise and keep us looking at biology risk. So, this is what we're selling for.

Thanks for taking my questions. Stéphane Bancel: Thank you.

Thank you. And this concludes today's question-and-answer session. I would now like to turn the call back to Stéphane Bancel for any further remarks. Stéphane Bancel: Yes. Thank you very much for joining us today and for your questions. We look forward to seeing many of you in the coming weeks and at the JPM conference in January. We also wanted to share with you that we are planning to start an Annual Day focused on manufacturing and digital. This new Investor Day will complement our Science Day which usually happen in the spring and the R&D Day usually in September. So, 2020 manufacturing and digital events will be held at our Norwood plant on the afternoon of March 4 on the back end of a Cowen conference in Boston. Juan Andres who leads our Technical Development, Manufacturing and Quality; as well as Marcello Damiani our Chief Digital Officer will host the event. They will share with you what the progress their team have made in 2019 and the new initiatives they will do in 2020. We hope to see many of you on the afternoon March 4, in Norwood. Have a nice day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.