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

Thank you. Good morning, everyone, and welcome to the Moderna’s Third Quarter 2020 Conference Call to discuss Financial Results and Business Update. You should 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 Stéphane 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 safe harbor provision 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 revise the information or provide - provided on this call as a result of new information or future results or developments. I will now turn the call over to Stéphane..

Thank you, Lavina. Good morning or good afternoon, everyone. I hope all of you and your loved ones are in good health and remain safe. Thank you for joining our Q3 business update conference call. I will start with reviewing key highlights. I would like to focus on three topics. First, our COVID-19 vaccine. Second, our product development pipeline.

And finally, key financials. As many of you know, we completed enrollment of our Phase 3 COVE study for mRNA-1273. 30,000 participants have been enrolled in the study, 37% of whom are from diverse communities. Tal will give you some details in a few minutes. We are grateful for participants in the study and for our principal investigators.

I would like to also thank PPD and NIH for great job and collaboration. It is very important to Moderna team that we have a high bar for quality and transparency to ensure the public has trust in COVID-19 vaccine. We have reported weekly enrollment progress of the COVE study and have reported weekly enrollment numbers from diverse communities.

While we are not happy with the representation of these diverse communities, given the high burden of disease in these populations, we decided to slow down the overall COVE study enrollment process in order to recruit more people from diverse communities. As you can imagine, it was not an easy decision to slow down, but it was the right decision.

We signed the biopharma pledge to not submit for regulatory approval for mRNA-1273 until we have adequate safety and efficacy data. We were also the first company to file the full and redacted version of our Phase 3 protocol online to ensure clinicians around the world could see in full transparency how the COVE study is being run.

We were pleased to set the standard and have others in the industry follow early. We continue to expect our first interim analysis to readout in November. The independent Data Safety Monitoring Board, or DSMB will carry out this interim analysis and then inform Moderna.

We should have a post-second dose two month safety follow-up after the second vaccination of a 15,000 median participants in the second half of November. As many of you know, this is what the U.S. FDA has asked as part of the EUA submission in their latest guideline published ahead of October 22 VRBPAC meeting. We are working closely with the U.S.

FDA to file Chemistry, Manufacturing, and Control or CMC components as soon as they are available to ensure CMC is not on the critical path to an EUA approval. In addition to the ongoing dialog with U.S. FDA, we have announced rolling submissions for mRNA-1273 in the U.K.

and Canada and received confirmation of eligibility for submission of Marketing Authorization Application to the EMA for the EU. We are very pleased to announce this morning that we have signed a partnership in Japan with Takeda for an order of 50 million doses for the Ministry of Health, Labor & Welfare of Japan.

In the third quarter, we have received $1.1 billion of cash payment from governments around the world, and those are accounted in our financials as deferred revenues. Let me now turn to our broader pipeline. We announced at the R&D Day in September the positive Phase 2 readouts for mRNA-1647, our CMV vaccine.

We are on track to start the pivotal Phase 3 registration study for CMV in 2021. I would refer you to our April Vaccine Day presentation, in which we've communicated that we believe our CMV vaccine has a potential for annual peak sales between $2 billion and $5 billion.

There is no approved vaccine against CMV, and it is the number one cause of birth defect in the U.S. and in the developed world. Moderna owns global rights to CMV 1647. Our intratumoral OX40 ligand program that many of you have heard about at our recent R&D Day, is now doing patients in the Phase 2 expansion study.

In rare disease, start-up activities under an amended protocol for Phase 1 propionic acidemia or PA study are underway. All of our pipeline programs that were enrolling and dosing patients also continue and are ongoing. Let me finish this slide with a few words about the financials.

David will go through the financial numbers in a few minutes, but I wanted to share a few thoughts. As I mentioned earlier, we reported this morning that we booked $1.1 billion of deferred revenues in Q3 for supply agreements for mRNA-1273. This cash has been received by the company.

These cash receipts have enabled the company to generate $893 million of cash flow provided by operating activities in the third quarter after investments of approximately $300 million in the business.

If you turn to Slide 4, I am pleased to report that this is the first quarter in the company's history in which we reported positive cash flow provided by operating activities coming from product supply agreement. It has been 10 years after inception and after investing billions of dollars in science and product development.

Thank you to all our employees, scientists, of course to our investors and to all of you that have believed in Moderna. Let me turn to Slide 5 for my closing remarks. As a snapshot of Moderna, in October 2020, we have accomplished a lot and continue to have a broad pipeline that continues to progress well.

We have fully enrolled Phase 3 program with mRNA-1273. We now have four Phase 2 trials with CMV, personalized cancer vaccine, VEGF with AstraZeneca and now OX40 ligand, seven ongoing Phase 1 programs and 12 positive Phase 1 studies. Our vaccine franchise has six programs in development, addressing the major unmet needs.

We have five immuno-oncology programs in the clinic, four programs in rare disease and two programs in autoimmune disease. Our foundations have never been stronger with 32,000 participants and patients in our trials. We have now over 1,200 employees.

We have an international manufacturing capacity and capabilities with our partner Lonza, ROVI, and Catalent, and we have strategic partnerships with companies like Merck, AstraZeneca and Vertex. At the end of September, we have a strong balance sheet of $4 billion. I'm very proud of what we have accomplished so far and where we stand as a company.

The next few weeks and months are going to be quite historic for Moderna. I will now turn it over to Tal to talk about clinical updates.

Tal?.

Thanks you, Stéphane. And good morning, everybody. Let me give you a quick overview of our pipeline progress and starting with our COVID vaccine. The Phase 2 study looking at safety and immunogenicity in 600 participants is ongoing. Dosing has been completed, but we remain blinded while the final immunological testing is being conducted.

Once we have the results, we will share that. As a reminder, the safety data from this trial have of course been shared with regulators prior to the start of our Phase 3 COVE study. That is now fully enrolled, and I will share some details shortly.

For our CMV vaccine, mRNA-1647, we shared positive Phase 2 data at our annual R&D Day in September and the data enabled us to select the 100 microgram dose to take forward in our pivotal Phase 3 trial, which is expected to begin in 2021. For our Zika vaccine, we showed the positive Phase 1 results and are preparing for Phase 2.

On the pediatric front, I'm happy to announce that our hMPV/PIV3 Phase 1b age de-escalation study has resumed dosing toddlers aged 12 to 36 months following a pause that was related to COVID-19 disruptions. This is the first mRNA vaccine to be given to toddlers.

In addition, the first cohorts of adults participants in the Phase 1 study of our RSV vaccine, mRNA-1345, has now been fully enrolled. As a reminder, this is also an age de-escalation study similar to the hMPV/PIV3 study and the plan is ultimately to also those toddlers.

In another core modality, the systemic secreted and cell surface therapeutics, we showed the positive Phase 1 data from additional cohorts of the Chikungunya antibody program during our annual R&D Day in September.

Importantly, we demonstrated not only potentially therapeutic levels of a secreted systemic protein, but that a two dose regimen with a week between doses was safe and well tolerated and led to the predicted increase in Chikungunya antibody productions. This demonstrates our platform's ability for repeat dosing.

I'd further note that as a result of rapid systemic clearance, no significant accumulation of our lipid nanoparticle was seen after administration of the second weekly dose. Moving to Slide 8 and the updates from our pipeline of candidates across the four exploratory modalities, and starting with our personalized cancer vaccine, the PCV.

The randomized head-to-head trial of PCV with KEYTRUDA -- versus KEYTRUDA alone in the adjuvant melanoma setting is ongoing.

A reminder that our Phase 1 study continues with patients in the various tumor types who were treated in the monotherapy Cohort A and in combination Cohort B are in follow-up and the Phase 1 expansion cohorts of Cohort C is enrolling patients. Cohort D in the adjuvant melanoma is also ongoing.

For the intratumoral immuno-oncology, I'm happy to report that we have dosed several patients in the ovarian Phase 2 expansion study. Recall that we initiated this part of the study just last month, and I believe the team is focused on moving this trial forward along with the support of our clinical investigators has been very productive.

Our Triplet program in this modality also continues to enroll and dose patients in the Phase 1. In our systemic intracellular therapeutics modality study, start-up activities have resumed for the PA program following disruptions due to COVID-19. In addition, Nature published a preclinical study on this program.

For the MMA program, recall that we announced at R&D Day that we would take forward our next generation development candidate, mRNA-3705, which recently received a rare pediatric disease designation from FDA.

And finally, regarding our partner-led programs, the Phase 1 KRAS with Merck and the Phase 1 Interleukin-12 and Phase 2a VEGF studies with AstraZeneca are all are ongoing. So Slide 9 is a snapshot of our development pipeline.

And please note that eight preclinical programs across three different modalities that we didn't touch upon during the clinical review, bringing the total number of programs in development currently to 21. So let me move into more detail to mRNA-1273, our vaccine against COVID-19. Slide 10 is a broad overview of where we are.

mRNA-1273, led us to a robust immune response across species and can protect human and non-human primates from the virus taking hold in both the nose and the lungs.

In the clinic of the 100 microgram dose we observed consistently high levels of neutralizing antibody titers across all adult age groups and these titers were higher than those seen on average in convalescent sera.

And the Phase 3 COVE trial has completed enrollment, meeting our expectations, and I'll give you more details on the demographics in a moment. Let me briefly review the Phase 1 results that were published in The New England Journal of Medicine.

mRNA-1273 has been generally safe and well tolerated as the Phase 1 safety data at 100 microgram across the adult age cohorts demonstrate. As it relates to tolerability, the most common solicited adverse events were headache, fatigue, myalgia, chills and injection site pain, the majority of which were mild-to-moderate in severity and self limited.

Of note, local and systemic reactogenicity were more common and more frequently moderate in severity after the second dose. One severe solicited systemic adverse event occurred after the second dose and that was fatigue in the above age 71 age cohort who received the 100 microgram dose. What is important is that these flu-like symptoms are expected.

They're transient and generally mild-to-moderate in nature. And I believe they correlate with the underlying potency to stimulate an immune response in high levels of neutralizing antibodies. Importantly, there were no vaccine-related serious adverse events in this trial and no patterns of concern for any clinical labs.

And while these numbers are still small, we did not see a difference in safety or reactogenicity profile between younger and older adults. As it relates to the immunogenicity, I would make three points regarding the data. First, we see the same level of neutralizing antibodies in younger and older adults.

Second, we see these levels consistently in everybody who receive the vaccine. And finally, these levels are higher than those seen on average in the blood of people who had been ill with COVID-19 and whom we expect by and large to be immune to the second infection.

Now if you follow the timeline, you will see that the high levels of antibodies are achieved quickly upon boost. And I believe the speed and quality of this immune response speaks to the T cell supports and puts us in a good place to have durable protection.

Slide 13 shows an overview of our Phase 3 COVE study, which is now fully enrolled with 30,000 participants. The full protocol can be found on our website. And noteworthy points from this slide include the one-to-one randomization between 100 microgram of mRNA in the vaccine arm and placebo.

Every participant in the study was expected to be at higher risk than average of infection, that was inclusion criteria number one. And a significant proportion of subjects were stratified as being risk -- at-risk of worse outcomes from COVID-19 should they get infected.

These are people over 65 years old or those under 65 years old, but with chronic conditions that are risk factors for disease.

So how did we do in terms of demographics? We're very proud of the hard work of our clinical team, our collaborators at NIAID and our clinical trial sites that led to the successful recruitment of a diverse and representative study population, which is similar to the census of our country, with 37% of study participants coming from diverse communities, and you can see the breakdown on the left side of this slide.

We've enrolled 6,000 Hispanic or Latinx participants and 3,000 black or African American participants. Age distribution is shown in the middle. And of note, about two-thirds of the trial participants are older than 45. And the gender distribution was close to evenly split, as is seen on the right.

So what about risk factors for severe COVID-19 disease? The greatest risk factor is age, and a quarter of participants were over the age of 65.

In addition, 17% were younger, but still at risk of severe disease by virtue of co-morbid conditions, such that 42% of trial participants are in the high risk strata of having worst outcomes should they get infected.

There is another way of looking at it, which looks at the breakdown of the chronic conditions that put people at risk, shown on the right. These include diabetes at 36%, severe obesity at 25%, significant cardiac disease at 19% and 18% with chronic lung disease.

I would note that all in all, over 8,000 of the participants in our study are living with these chronic conditions. Now if you do the math, you'll realize that a significant proportion of participants in the COVE study had the independent risk factors of both an older age and co-morbid conditions. So Slide 16 sums it up.

Our Phase 3 COVE study is representative of the many diverse populations that make up our nation and by extension many parts of the world, and many people could identify with our study and can find themselves in it.

As we're anticipating the results of our COVID-19 vaccine study, let me take a few minutes to review the statistical analysis plan on what happens next. As many of you know, we have two interim analyses at 53 and 106 events and a final analysis triggered at 151 events.

At the first interim analysis based on the statistical plan in order to cover the success, we will need to show vaccine efficacy of 74% or greater. From the graphs on the left, you can see that there is a 50% probability of meeting that hurdle, assuming a vaccine efficacy rate of 75%. So there is an element of chance here as well.

At the second interim analysis, vaccine efficacy of 57% or greater is required to meet the statistical hurdle. And the probability of meeting this is actually 95% if the actual true vaccine efficacy is 75%. For the final analysis, as per FDA guidelines, at least a 50% efficacy is required.

And again, the probability of meeting that primary endpoint in the final analysis is in the high-90s, assuming that our true vaccine efficacy rate is 75% or higher. But we also need to remember is what's not on this graph, all of these assumptions are driven by the imperative to ensure that we have a high degree of confidence.

And I'm talking about statistical confidence that once one of these boundary conditions are crossed, not only do we have an initial point estimate about the vaccine efficacy, but we have a 95% confidence interval that the true efficacy, not the point estimate of the sample, exclude 30% or is higher than 30%, and I'm sure we'll be coming back to this crucial point in the future.

So in each interim analysis there are three potential outcomes; either the study meets the statistical hurdle, which is 74% at the first interim and greater than 57% in the second, enable us to trigger the full analysis required to evaluate whether to proceed with the regulatory submission, and of course the trial remains blinded and data continue to accrue at this time.

The study may not meet the statistical hurdle and then would continue to the next milestone or the study is determined to be futile. As we have committed to and have been transparent throughout the Phase 3 clinical program, today we released the informed consent form of our Phase 3 study on our website and we will continue to be transparent.

We'll announce the results and next step once the first interim analysis has occurred. Now the pressure on the results are driven by the fact that from a distribution standpoint, we're ready. We expect that mRNA-1273 be distributed within existing infrastructure.

There is nothing new required that hasn't already been used for years with many other vaccines.

Specifically the advantages of mRNA-1273 that allows us to do this includes the ability to package and ship boxes in any configuration, housing small or large quantities of vaccine, storage conditions of minus 20 degree celsius for six months, refrigeration temperatures of two to eight for up to a week and room temperature's conditions for up to 12 hours after a fall.

No special handling or dilution is required prior to vaccination with mRNA-1273. And by the end of this year, we expect to have approximately 20 million doses ready to ship in the U.S. With that, let me turn it over to David to take you through the financials..

Okay. Thank you, Tal. Turning to Slide 21 in the deck. We ended Q3 2020 with cash and investments of $3.97 billion compared to $3.07 billion at the end of Q2. The increase was primarily driven by $1.1 billion of customer deposits received in the third quarter for a potential supply of mRNA-1273.

Net cash provided by operating activities was $763 million for the nine months ended September 2020 compared to net cash used of $360 million for the same period in 2019.

The reversal from cash used to cash provided by operating activities is driven by total customer deposits for the nine months ended September 30 of $1.2 billion received for a potential supply of mRNA-1273. Cash used for purchases of property and equipment was $44 million for the nine months ended September 2020 compared to $25 million in 2019.

Total revenue was $158 million for Q3 2020 compared to $17 million for the same period in 2019. Total revenue was $233 million for the nine months ended September 2020 compared to $46 million for the same period in 2019.

Total revenue increased for both the three month and nine month periods in 2020, primarily due to increases in grant revenue from BARDA to accelerate development of mRNA-1273. Research and development expenses were $344 million for Q3 2020 compared to $120 million for the same period in 2019.

Research and development expenses were $612 million for the nine months ended September 2020 compared to $378 million for the same period in 2019. The increases for both three month and nine month periods in 2020 were mainly due to increased mRNA-1273 clinical development activities and headcount and pre-launch inventory buildup.

Overall, in both periods, we saw a significant increase in expenses for the prophylactic vaccines modality as a result of our focus on mRNA-1273. General and administrative expenses were $49 million for Q3 2020 compared to $28 million for the same period in 2019.

Expenses were $109 million for the nine months ended September 2020 compared to $84 million for the same period in 2019. The increases for both periods were mainly driven by increases in personnel, outside services and set-up costs associated with preparation for commercialization of mRNA-1273 globally.

Turning to selected cash flow information on Slide 22. On the top half of the page, we present information from our 10-K and 10-Q filings. And on the bottom part, we provide the quarterly trend and also items to take into consideration when assessing the evolution of this trend, in particular for Q2 in Q3 of this year.

Cash provided by operating activities and for purchase of property and equipment was $719 million for the nine month period ended September 30 and $874 million in the third quarter alone.

Excluding deposits received for potential supply of mRNA-1273 and the Vertex upfront payment, cash used in operating activities and for purchase of property and equipment was $296 million in the third quarter. This compares to $118 million in the second quarter of this year, excluding customer deposits received in Q2.

The increased cash used of around $200 million in Q3 compared to previous quarters is consistent with our expectation as we are making substantial investments in manufacturing and potential global commercialization activities for mRNA-1273 COVID vaccine candidate.

Let me now give you an overview about where we stand with regard to commercialization optimization activities. Please turn to Slide 23. On Slide 23, you see listed supply agreements that we have announced publicly today. As a reminder, these include the agreement with the U.S.

government for 100 million doses in options for an additional 400 million doses. We just announced a deal with Japan for 50 million doses. Canada has confirmed 20 million doses with an option for an additional $36 million.

We have also signed agreements with Switzerland, Israel and Qatar, and there are several other countries that have signed agreements that have not been publicly disclosed. We are thankful for the trust the governments around the world have placed in us to deliver a vaccine for their countries.

All of these agreements contain provisions for deposits and have contributed to our 3Q '20 deferred revenue value of $1.2 billion, including $600 million from the U.S. government. We continue to work with the European Union where we are in advanced discussions to supply 80 million to 160 million doses.

Negotiations with other countries are also ongoing, including with COVAX on the tiered pricing proposal. As a reminder, pricing for agreements with smaller volume were executed at $32 dose or $64 for two vaccination course with $47 per dose or $74 per course.

We remain on track to fulfill these contracts with anticipated supply between 500 million and 1 billion doses in 2021. Turning now to our 2020 financial update on Slide 24. On an overall basis, we now expect net cash provided by operating activities and purchases of property and equipment in 2020 in the range of positive $0.1 billion to $0.3 billion.

The change compared to our update in Q2 was primarily driven by the increase in customer deposits for the potential supply of mRNA-1273 as well as upfront payments for recently announced collaboration agreements with Vertex and AZ. Let me provide you more color on the individual components of our financial outlook.

With regard to the ongoing investment in our portfolio, excluding our COVID vaccine candidate and associated activities, we remain on track to our prior outlook.

We expect net cash used in operating activities and purchases of property and equipment to be approximately $0.4 billion in 2020, reflecting an improvement of $0.1 billion from prior outlook. This change is entirely driven by business development activities and related upfront payments as investment levels remain consistent with prior outlooks.

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 24. Next, looking at the COVID vaccine-related net investments, primarily for manufacturing a product to be commercialized in the U.S. and internationally.

We expect the cash impact of COVID-related investments to be $0.5 billion to $0.65 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 build-out and costs related to our supply agreements. The sum total of net cash used in operating activities for all of Moderna's business is currently expected to total $0.9 billion to $1.05 billion before consideration of customer deposits.

Including the customer deposits received by the end of September, which sum to $1.2 billion, we expect the total net contribution from cash provided by operating activities and used for purchase of property and equipment of positive $0.1 billion to $0.3 billion. We expect this number to increase as we continue to receive further deposits.

Turning now to Slide 25. 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 25 highlights some key areas, which will change with an approval event, for example, an Emergency Use Authorization in the United States. Costs associated with pre-launch inventory are currently fully expensed to R&D expense in the period incurred. This includes cost for acquired raw materials as well as production costs.

After an approval of that, we will capitalize our inventory to the extent that the commercialization is determined to be probable, and we expect future economic benefits from sales to be realizable. In the third quarter of 2020, we expensed pre-launch inventory of $52 million, largely raw materials.

The costs associated with purchases of property and equipment or leased assets related to our mRNA-1273 program are evaluated for assets with alternative use will be capitalized. Examples of these assets include IT and general production infrastructure.

Assets acquired to meet the current production needs of mRNA-1273 and before product approval will be expensed immediately as costs are incurred. This reflects the fact that Moderna does not yet have other platform products approved or commercialized.

After a regulatory approval event when PP&E at least assets are no longer required to be assessed for alternative use, such assets will be capitalized. In Q3, we recorded $10 million of PP&E as expense.

On product sales, customer deposits for potential supply of mRNA-1273 are recorded as deferred revenue and will be recognized as revenue when control of approved product has been transferred to the customer and customer acceptance has occurred.

In Q3, we recorded $1.1 billion of incremental deferred revenues associated with potential future supply of mRNA-1273. No product revenue was recognized in the quarter. 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.

As of 12/31/2019, we had $982 million of federal and state accumulated net operating loss carry forwards. And $471 million of net deferred tax assets, which were fully reserved as we concluded that realization of our net deferred tax assets was not yet more likely than not to be realized.

After a regulatory approval event, and as we expect to utilize the NOLs, we will reverse and release the valuation allowance or portion of the allowance, which will result in a tax benefit in our income statement. This concludes the financial update. And I turn now the call back to Stéphane..

Thank you, Tal and David. In closing, I would like to step back for a few minutes. Across the world, we are all, rightly so, very focused on the pandemic. The race against the virus, both in therapeutics and vaccines. The Moderna team has been incredibly focused in 2020 on getting mRNA-1273 to the market in time.

But an important part of my role is to look into the future, not only at the next few weeks, but the next few years and to look at the big picture, not only to look at Moderna.

I believe Moderna entered 2020 in a strong position, with a strong cash position of approximately $1.3 billion, with a diverse clinical portfolio of vaccines and therapeutics across six different modalities. We have always focused on a portfolio approach to reduce technology risk. We have 20 development candidates.

We had sustained over nine years since inception large investments in platform science, mRNA and LNP formulation. We have established a very broad and strong IP portfolio. We have sustained large investment in process development.

We owned a fully integrated plant that allowed us to go from raw materials to fill vials for all of our clinical needs at scale and with unprecedented speed. As I look at the end of 2021, 14 months from now, I believe that if we launch mRNA-1273, we will exit the COVID pandemic crisis in a unique position.

We should have a strong cash balance at the end of 2021. It will be made over $4 billion at hand as of September 30, 2020 plus the cash flow that we should generate in fiscal year 2021. The U.S. government has taken a very thoughtful approach with Operation Warp Speed or OWS.

They decided to support free vaccine technologies, including mRNA to diversify risk, to ensure we got stable vaccines to the finish line for the U.S. citizens. They decided to back only two companies per technology. Moderna was one of the two companies that the U.S. government ordered 100 million doses from. That is a very important market access.

We are grateful for the trust of the U.S. government placing us, our development process and our technology, and we're very thankful for the help. Moderna retains worldwide rights to give lot and commercialize mRNA-1273. Without a corporate partner, Moderna will realize all the profits from the COVID-19 vaccine.

We intend to reinvest the returns from the sales of the vaccine into our pipeline development and hope to bring more medicines to the market. I believe that the long-term strategic implication are large. We should have a unique cash position at the end of 2021. Moderna has been built to scale because mRNA is an information molecule.

We invested relentlessly in science at scale that no other company could have thought; in robotics, in digital, in process development, in the large manufacturing plant. We have always been limited in the last five year with cash. I believe that this is about to change in a very material way during fiscal year 2021.

The approval of mRNA-1273 for commercialization will provide a unique derisking of the entire Moderna vaccine platform. We use the same chemistry to make each mRNA vaccine. We use the same manufacturing process to make the mRNA. We use the same chemistry for our lipid. The same manufacturing process to formulate the mRNA in our lipid.

Think about what this team could do over the next five to 10 years starting from a growing credit balance of $4 billion and the knowledge that our technology leads to approved vaccines. I believe 2021 will be the most important inflection year in Moderna's history. Early on, we recognized that mRNA could be an entire new class of medicine.

We always said, since day one, that it made no sense that this would be a one-product company. It will be zero if we fail to make safe and efficacious product or it will be a new class of medicine changing medicine forever.

Our mission to deliver on the promise of mRNA science to create a new generation of transformative medicines for patients is when we strike for every single band. In 2020 we didn't wait long. We had many partners; the NIH, BARDA, Lonza, ROVI, Catalent, PPD, the clinicians that conduct clinical trials and our team.

I'm very thankful for the clinical trial participants for their trust and the participation in our trials. With that, we will now be happy to take your questions. Thank you.

Operator?.

Thank you. [Operator Instructions] And our first question comes from the line of Salveen Richter with Goldman Sachs. Your line is now open..

[Technical Difficulty] COVID-19 vaccine.

So just given the commentary from the recent FDA Adcom on COVID-19, just would like your thoughts here about how you intend to unblind potentially on the first interim or post the full three looks in the study? And then secondly just timelines around a vaccine EUA, just given some of the commentary, and I think Dr.

Fauci talking about at January green light for vaccines? Thank you..

Yeah. Hi, this is Tal. Let me try and take that. I think the bottom line here is that we feel I think an obligation to the participants of the COVE study, especially those for whom an EUA will be appropriate that there is a way for them to ultimately benefit from what they themselves have contributed to.

And of course, I think we all listened intently to Vertex last week. There is a balance to be had here. The way I think this is going to happen at the end of the day, unfortunately, the cases are accruing. We are in a period of increasing transmission.

And so I expect that there will be some time between knowing that the bar has been crossed for efficacy, doing the analysis and discussing with FDA. And part of that conversation is finding the right balance of how long do you continue to collect blinded data and what is the type of data that one can collect post blinding, but still on trial.

I mean if you do the math, if you're looking for very rare safety events for example, then an unblinded study actually could give you power to detect that even more than a blinded trial. So a lot of these elements I think are going to go into of the conversation that we're having with FDA.

And I'm confident that together with them we will find the right balance as to how to operationalize this. As it relates to the timing, I think we're on track to have the first interim in November. I think I expect unfortunately that we're going to be on track for additional cases occurring in December and beyond.

And so the totality of data in the coming months I think will cross that threshold I anticipate for efficacy and the rest will be a dialog with FDA and other regulatory agencies on the right process by which to ensure we demonstrate the safety and efficacy and ultimately make the vaccine available..

Thanks, Tal..

Thank you. And our next question comes from the line of Matthew Harrison with Morgan Stanley. Your line is now open..

[Technical Difficulty] all the information this morning. I guess two related questions from me.

Tal, can you comment at all about the attack rate that you're seeing in the study? I think given the Pfizer comments earlier this week, there is a lot of confusion among investors about whether the attack rate in these studies mirrors what we're seeing in the general population or if it's somehow lower than what we're seeing in the general population? And then a related question, something else that I think has come up a lot is this concern about functional unblinding potentially due to people recognizing some of the features of the boost and that may be leading towards certain people taking on different behavior, which may lead to this lower event rate.

So I was wondering if you could talk about if you have a concern about functional unblinding? And especially related to the fact that you obviously have the placebo data from the Phase 2 study, do you have a much better idea of placebo-adjusted tolerability versus what we've seen from an open label study? Thanks..

Thanks, Matthew. Let me try and give you a sense of how I see the data. First of all, my sense from the emerging data is that attack rates of our trial participants do mirror what we see in those zip codes where the subjects are coming from.

It's not a surprise because if you look at the demographics of what we've been able to achieve in the COVE study, having so many people, minorities older with co-morbid conditions, so it's on par with expectations, I think writ large.

And unfortunately with the current attack rates not slowing down, the math that we're doing, it's this paradox of more attack rates out there worse off for our subjects unfortunately, but the data will get there. So that's my sense.

Now there is a balance to be had, which I think is -- I've tried to address in the first question that not just us but everybody in the field is struggling with, which is the accumulation of data versus the eventual unblinding of participants and how does that all play into regulatory expectations, and I think we'll continue to have this dialog in the coming weeks.

The concern you raised about functional unblinding, yes, I share that. I think we all do, to a certain degree. We chose a dose that we believe is optimal in the sense that people may get some transient flu-like symptoms, but it's worth it for the opportunity to prevent this disease. I don't think this leads to lower event rates, per se.

I think my biggest concern is that, if anything, it would bias us against vaccine efficacy rate.

If people behave because they think they got something and that modifies their behavior, then if anything, you would expect that the behaviors would be such that the placebo recipients would be less at risk of getting infected and the vaccine recipients would be more at risk of getting infected.

So at least from a statistical and robustness of the data, it shouldn't have any adverse effect. If anything, it should hurt us. But I don't expect this ultimately to be significantly changing the event rates. And if I look at the macro picture, as I've said, I think we're going to be on track, unfortunately, for where we anticipate being..

Thanks. Thanks very much..

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

Great. Thank you very much, and thank you for all of your hard work in bringing 1273 forward. Amazing to see the company turning cash flow positive. A huge milestone. Let me get a sense for cost of vaccine at the price or at the quantities that you're talking about for next year with Lonza? Thank you..

Ted, it's Stéphane. As we've said in the past, we are not disclosing cost of goods for obvious competitive reasons. So I won't be able to answer that question..

Fair enough. Looking forward to data coming up. Thanks..

Thanks, Ted..

Thank you. And our next question comes from the line of Michael Yee. Your line is now open..

[Technical Difficulty] what do you think is going on with the event rates? I know that you said you actually believe you're on time, so maybe it's a question more in part based on the competitor.

And related to that, do you actually know your actual event rates, and therefore, you do you feel every day that you're seeing the numbers and feel very confident about November? Your competitor missed that timeline, so I think everybody is nervous about that.

So maybe just make a comment about what you think is going on in general? And then secondly, because if the NRM is actually pretty high interim, and I think you've actually commented on that.

Maybe just make a comment about if we don't hit that what that will mean for folks? And I think it has to do mostly with the alpha spend, so that's why I'm not too concerned.

But maybe just make a comment about that as well?.

Thank you. Yeah, this is, Tal. Look, I can't comment about our competitors. I don't know their data. So I'll leave that to them. I can repeat what I said about our sense. We do of course see the data coming in. There is a small team at Moderna that's aware of the cases that's following up.

That number is of course being kept confidential to minimize speculation here. But I can tell you that overall since we are following the zip codes and the counties from which these participants come, we have pretty sophisticated models of what to expect, and I think we're on track for those expectations.

So I think we should be on track for that first interim some time in November, as we have articulated. You raised a valid point about the interim, and thank you for asking that. Hitting that interim is going to be a function of what the actual vaccine efficacy is and an element of luck on the distribution of the first batch of data you see.

Not hitting it doesn't mean the vaccine doesn't work. And in fact, it doesn't even mean that the vaccine has a less than 75% efficacy. We could easily not hit and yet come back on the second interim and demonstrate an 80% or 85% efficacy. That's kind of the chance of how the stats work. I think the alpha spend, etc., you're correct.

This is a conservative design and maybe it's an opportunity to dispel a notion. The fact that we crossed the boundary at an interim doesn't mean it's less powerful than a final from the peer statistical standpoint. Once you cross that boundary, you have the same statistical conviction that you would have had on the final.

Now I think the way I think about the data here is irrespective of the point at which we cross the boundary, the trial will continue blinded for a period of time. Data will continue to accrue.

And as long as the trial continues blinded, we will get better and better with more and more data to increase the level of certainty we have on all the endpoints of the trial.

So in that regard, for me, this first crossing of the interim is just the basis that allows us to go and have confidence to start doing analysis and proceed down the path of regulatory interactions so that we can ensure that ultimately access is not delayed to people when there is such a high need out there in our communities..

Thank you..

Thank you. And our next question comes from the line of Gena Wang with Barclays. Your line is now open..

[Technical Difficulty] do you also see safety in a blinded format? If so, how is that compared to the Phase 1 profile? And then two questions regarding the interim analysis.

So if first interim -- if you missed the first interim, is this due four to eight weeks to hit the second interim? And then for the first interim, what is the futility boundary?.

Let me take that. The safety, yes, we see the totality in a blinded fashion. I would remind you that the Independent Data Safety Monitoring Board that's been appointed by the NIH and sees not just our trial, but also the other U.S. OWS-sponsored trials, in parallel sees both the blinded and the unblinded data.

Writ large, I can tell you that so far we're not seeing anything unexpected, so the trial continues. And in that regard, I don't expect surprises when we eventually unblind. Your second question around the timing is I think it's a matter of weeks between the first and the second interim, not months.

Now I can't be more precise because obviously it's a function of the future transmission rates in areas, and I hope that they go down. But for now this is four weeks, not longer. In terms of futility, I think the boundary is to show that this is going the wrong way.

It's specified to the degree that we felt it was appropriate to specify in the protocol. Beyond that, I can say that the reason you have a Data Safety Monitoring Board, you've got on that panel several statisticians and several experienced clinicians.

So it is where I expect them to exercise their judgment and experience when they're looking at it closely..

Okay. Thank you..

Thank you. And our next question comes from the line of Cory Kasimov from J.P. Morgan. Your line is now open..

Thanks guys for taking my question. This is Matthew on for Cory. Just on the COVE trial in light of subject mix and commentary that event rates are tracking geographically with infections.

I'm wondering what your assumptions are for the proportion of patients with SARS-CoV-2 infection that you expect to ultimately going to become symptomatic?.

Yeah. So let me make -- let me answer in maybe a simplistic form. The tracking is first and foremost of symptomatic cases because we're not routinely swabbing people just to check PCR as people self-identify.

The asymptomatic infection rate will be determined based on serology that distinguishes between infection and immunization by later comparing antibodies against nuclear capsid versus spike protein. So we are primarily aware of the symptomatic infections, to begin with.

And that is the parameter that we're primarily tracking as it relates to the epidemiology.

Hope that answered the question?.

Yeah. I guess maybe just to follow-up.

So when you say that rates are tracking the zip codes, what is the data that you are gathering from outside the trial to benchmark it to zip codes?.

Reporting of case rates and infection rates together. It's -- we've got a couple of independent expert panels and teams here that compile the totality of the data that emerges from the various surveillance programs and sophisticated models to create those predictions..

Great. Thank you..

If you're asking me to describe what's under that hood, it's a complicated black box for me. But I can tell you that the number that it spits out ultimately looks very close to the number that we see on a daily and weekly basis at this stage, and that's what gives me the confidence..

Got it. Thanks..

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

Hey, guys. This is Alec on for Geoff. Thanks for taking our questions.

Can you talk a bit more about the tiered pricing proposal with COVAX? What would this look like? And if you can talk about the agreement specifically, what's the logic of a tiered structure versus just a set price for a certain amount of doses seen in the other supply agreements? And on the Japan supply agreement, and I suppose on most of the OUS supply agreements, how do you plan to allocate manufacturing between your plants and launches? And are there any logistical constraints that would limit the vaccine produced in Norwood geographically? And I guess, just lastly.

What's being done to ensure consistency of vaccine produced between both your own internal and the external manufacturing sites? Thanks..

Hey, Alec. It's Stéphane. So it's a lot of questions. If I forget something, let me know. So on COVAX, what we want to do is to make sure that the vaccine is available around the world.

As you know, we believe based on -- I mean on the early development data that the vaccine has a chance to be protective across different age range, and we think it's very important. And so we want the vaccine to be available to help as many people as we can. The tiered pricing is very typical of what Gavi has done in the past.

As I'm sure you are aware, COVAX is being run by Gavi and CEPI. And so the idea here is to propose to low-income countries and middle-income countries a price that is lower than the price being paid by developed countries or high-income countries. And so that is basically the idea.

And so of course, we're not in a position to disclose those prices today because the discussions are ongoing with COVAX. But we want to make sure as a company that we are able to provide vaccines at a lower cost for low-income and mid-income country.

In terms of quality across the board, I would say it's typical of what is done in many biopharmaceutical companies when you have several sites in term of a quality organization, technology transfer validation and so on to ensure that the -- a product that is made at Lonza in Visp or at Lonza in New Hampshire or at Moderna in Massachusetts is of the same quality and the same spec.

And then in terms of allocation. So as we said in the past, we setup the supply chain, the U.S. supply chain, Moderna Massachusetts and Lonza New Hampshire to focus initially on the U.S. We setup the supply chain in Lonza Visp to be initially focused outside the U.S.

And I think this is going to really hold for just I would say two quarters after launch. After such a time, we are going to setup the supply chain in term of regulatory filing so that products can be moved around. So if we get to a point where we have kind of sold all the products in the U.S.

that makes sense to be sold in the U.S., we will be able to ship products from the U.S. to international and vice versa. We want to setup the supply chain so that if at some stage we need more product in the U.S., we can import from Switzerland more products into the U.S.

So we're trying to setup a supply chain that allows us to be very flexible and nimble to react to the needs of a marketplace.

I hope that was your question, Alec?.

Yes, very helpful. Thanks..

Thank you..

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

Great. Thank you. Thanks for all of the data presented. Just a couple of quick questions. One is a non-COVID-related on CMV-1647.

You've got a worldwide -- since you have worldwide rights to, how are you thinking in terms of as you grow the organizations, Stephane, on a worldwide basis with 1273? Can you just talk a little bit about how that will help you with 1647 when the time comes to launch that, even prepare for worldwide trial with 1647? And then secondly, is it just wrong for us to assume that part of your initial revenues from 1273, the COVID-19 vaccine, could be sort of one-offs depending on how governments order them versus kind of a more like-for-like basis comparison on a year-for-year basis.

Any way to think about that going forward? Thanks for the questions..

Thank you, Hartaj. So on the, I would say, non-COVID organization, Stephen Hoge has spent a lot of time since the beginning of the pandemic to refocus on that one.

I think we've done to allow us as a company to both deliver 1273 at the kind of historic record time and not slowdown the rest of our pipeline, which of course is very important for Moderna and Moderna's future and for patients.

Tal has refocused most of this time on 1273 and taking this product from literally in a computer into Phase 1 into Phase 2 and into competing successfully over the COGS study and all the interaction with regulatory agencies around the world on the one hand. And then Stephen has refocused on the non-COVID portfolio.

And so what we have done is, we've been hiring quite a lot.

If you look at our headcount numbers, we've been hiring quite a lot and we're going to continue to do so into the next quarters so that we can have the right scale in terms of development, so that we don't slowdown the development pipeline of a great asset like CMV or PCV or all of our asset because we don't have the right teams on the ground.

And as we get closer to commercialization, we'll of course hire people dedicated to that. We've already actually higher the Head of Marketing for CMV because it's very important we believe given there is no product on the market for CMV. In terms of disease awareness, a lot of women do not know about CMV and what CMV could do to their pregnancy.

And so we think there is a great opportunity while the Phase 3 is running to re-drive up CMV awareness.

And I think in the post-COVID world where people are going to be, I believe much more attuned to infectious disease, and given the similarity of outcome between the Zika and CMV and given what's happened in Latin America a few years ago, everybody is highly aware of Zika.

And so I think there's a great opportunity for us to actually prepare the market to increase the speed of the uptake of CMV by preparing the market a few years before, which is what we are doing.

In terms of our revenues, as we described, I think in the Q2 call, we really believe there is a pandemic phase of the COVID vaccine and then an endemic phase which is going to be setup mostly on boosting. As has been discussed a lot in the medical community, we do not know across the different vaccines how long we're going to be working for.

And so we believe most probably especially the elderly people are at high risk who are going to want to boost their immune profile. We do not know yet if it's going to be once a year, once every two year, once every three years, most probably it will depend on the population.

We have no way to know that, but to run the clinical experiments, which we are all doing across the industry. If you take a different vaccine will have different duration of protection.

And so indeed I think you're thinking about it in the right way, which I think there's going to be for quite a while pandemic contracts that are going to be setup, Blackstone that we have setup to actually start vaccinating people. And then there's going to be a follow-up contract with the currency paid for the boost.

So that's kind of how we think about it.

Does that makes sense, Hartaj?.

Yeah. No, that helps a lot, Stéphane. Thank you..

Thank you. And our next question comes from the line of George Farmer with BMO Capital Markets. Your line is now open..

Hi. Good morning. Thanks for taking my questions. I was wondering if you could comment on what happens if you don't hit the primary endpoint of this study, of the COVE study? And you do hit meaningfully on secondary endpoints, which could be quite important, I mean, certainly reducing severity of disease could be something regarded as meaningful.

Have you thought about that? And my second question is, if you do get an EUA, does the existing supply agreement having come into play, do you start drawing down on your inventory commitments following EUA or do you wait until you get full approval? Thanks very much..

So, George, this is Tal. Interesting point you raised. Typically if you don't hit the primary, you don't get to get -- take credit from secondary is the way the stats are laid out. I think in this case, if there is biological possibility, then of course we'd go and discuss with the agency what the data are looking like.

Because I anticipate we will actually have the opportunity to cross it early, we may have those discussions ahead of time while more data is accumulating. And if we fail to hit it, but the trial continues blinded given I think the exigent circumstances, we can go and have a dialog with the agency on what we've seen so far.

But I'd say the proximal answer would still be the conservative one, which is if you don't hit the primary, it's very hard to take credit for secondaries. It's going to be up to the regulators. I think the answer to your second question is an easier one. Yes, the supply agreement kicks in and U.S.

government I would expect would start to take the supplies once we have an Emergency Use Authorization..

Great. Thanks very much..

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

Hi. Thanks for taking my questions. Stepping away from COVID, you all mentioned in a months or last month that you'd like to revive that flu program.

I'm wondering if you could give us some more details around that? Is it something going to be both as a seasonal flu vaccine or something that we see as a universal vaccine? And if you can give us any updates on timelines around that?.

This is Steve. I'll take that..

Yeah. Go ahead, Steve..

So we announced last month is that we're looking at it strategically and we're going to begin building a business in seasonal influenza. I'll remind you that we do have already clinical data in pandemic influenza from two different programs. And so we're still in the ability to generate a productive immune response to influenza virus as well.

We haven't provided clarity yet on when we expect that program to move into the clinic. We will in the future provide those updates as we get closer to that time.

But we have suggested both it's an interesting market to try and do better on because there is a substantial still unmet need an influence, and we do think our platform can be differentiated for a couple of reasons. One, obviously, that we can bring many antigens to bear.

And the second, the opportunity to do combinations, potentially combinations even with other viruses that might need seasonal boosting. And so we'll provide an update as soon as we declare the development candidates we normally do and move forward towards clinical development. But we're quite excited by that opportunity at this time..

Great. Thanks for taking the questions..

Thank you. And our next question comes from the line of Umer Raffat with Evercore. Your line is now open..

Hi, guys. Thanks so much for taking my questions. I had a couple if I may. First, maybe starting from an easier one.

What's the cycle threshold you're using for the PCR positivity? Is it about 34? Second, if you could confirm if there have been any one-off cases of COVID infection for participants who got 1273 in Phase 1 or Phase 2? And then finally, I know the slides mentioned rapid protection in lung and nose of non-human primates.

But in The New England Journal data, we did see at least one primate at the 100 dose with detectable RNA on the nasal swab. So I guess what I'm getting at is, as a base case, despite the requirement of symptoms, is it reasonable to assume that we could actually see one-off cases of nasal swab test positive for COVID? Thank you very much..

Hi, Umer. Let me take those questions. Our cycle threshold, I don't think the number is meaningful because it's not the same number on different assays. It's part of the assay characteristics, so I can't really comment because I don't believe you can compare those numbers across different assays.

On the participants in the Phase 2, I think we've had a case or two. But since we're still blinded, I can't really comment on what that means. The question on nasal swabs, yes. Well, first of all on the primate, you're right, there was one primate with transient and relatively low levels in the nose and the rest were sterile.

I think that when we talk about sterilizing immunity, I think that concept is confused by the high sensitivity that we have.

So what do I mean by that? Well, if I am immune and I've got IgGs and I've got IgAs as our data show we have and I'm walking down the street and somebody sneezes on me a whole bunch of SARS-CoV-2, and I'm on 49th Street, well, if somebody swabs me on 50th Street and sticks a swap up my nose, they're probably going to see some detectable virus from that cloud I just inhaled a block ago.

It doesn't mean that the antibodies aren't kicking in and the virus isn't getting clear, that's a question of timing and sensitivity. So it depends then on how you measure and when you measure and what are the triggers for measuring. In our trial, we test people who raised their hand to say they've got a symptom and a reason to be tested.

The only asymptomatic testing that occurs is really at day one and day 29 to make sure that we're excluding the right people and not confounding adverse events with actual disease. But short of that, we're not just randomly doing swab tests.

So I hope that answers your question as it relates to detection?.

Thank you very much..

Thank you. And our next question comes from the line of Mani Foroohar with SVB Leerink. Your line is now open..

Hey, guys. Thanks for taking my questions. I know there has been a lot of focus on the COVID-19, but specifically I wanted to dive in on massive financials a little bit.

So did I hear right that for the quarter about $10 million of what would otherwise be PP&E were expensed? And so would moving that back to CapEx give us the base from it would go here? And secondarily on that, how should I think about the tempo of CapEx growing over the next 12 to 24 months presuming a successful EUA and global commercialization? And then I have a follow-up question out of this..

Yeah. So in terms of the capital deployment, if you look at the quarter three, we had $10 million, which I mentioned, that was 1273-related that was expensed. What also we invested was $12 million in the quarter, which was capitalized. So $22 million in total. And I think that's a reasonable run rate.

You will see some increase here as we finish the year and we trend up on investing in preparation for launch and the full capacity that we're putting in place.

As that continues into next year, I think it's fair to understand that the capital deployment is going to increase somewhat, including the possibility in the fourth quarter of additional expensed capital to the extent it's deployed prior to the approval, which we do expect more to happen.

And then if I may, also keep in mind the inventory expensing, which is not strictly capital investment, but the acquisition of raw materials and the cost of production, and of course we're ramping that production in anticipation of an approval.

And therefore, it's quite likely that we'll have a fairly significant amount of expensed inventory occurring in Q4 prior to approval.

And as you would understand, the impact of that is that as we start commercializing product post-approval, the cost of the product will be essentially zero from a cost of goods perspective until we've sold through that inventory that we've produced prior to approval..

Okay. That's really helpful. And then hopping over on to the non-COVID pipeline. I may have missed it if it was mentioned.

What's the timeline to get the next slug of data from the OX40 ligand program? And when should we think about having a reasonable number of patients with that asset on top of a PD-1 -- on top of an approved PD-1 therapeutic?.

Let me try and take that. This is Tal. So it's oncology, and data I think is determined by not just patient accrual, but the events that happen on trial. And so it's really hard for me to predict, which is why we've been very clear on how many patients we have and where are we.

I think the next tranche of data I would anticipate will be once we have a sufficient number of these patients with ovarian cancer on trial, and that is already in combination with the PD-L1 blocker. So that should be informative for our response rates once we have sufficient patients with sufficient follow-up..

Great. That's helpful. And as a final question, bought back to financials.

Obviously the stock has been quite volatile over the course of this year, as have many of your peers, given that you continue to build out your infrastructure and headcount anticipation of expanding the pipeline and launching commercially for them to zoom in EUA for COVID-19, how should I think about modeling or how should we think about modeling stock-based compensations relative to the overall R&D expense, SG&A expense? Will the portion go up as you start to have more of a sales force? Will it down as you get scale? Just how should we think about that, either in absolute terms, as a proportion of spend? Just how should we think our modeling it in the next say 12 months?.

That's a very good question. And I guess I'd have to get back to you. I guess, I'd start with the point of view that the trend would be stable. But we'll have to get back to you on that..

All right. Thanks for taking the questions, and congratulations on all the success..

Thank you. Our last question comes from the line of Navin Jacob with UBS. Your line is now open..

Hi. This is Elana on for Navin. Thank you for taking our question.

So from what we've seen in your non-human primate studies, what impact on prevention of infection through the viral colonization and viral transmission do you expect to see from 1273? And then secondly, sort of a broader question is, do you think that your vaccine or any vaccine in general will be able to deliver sterilizing immunity?.

Yeah. So that's a good question. Let me tell you how I think about it. Again, as I alluded before, I think the concept of sterilizing immunity is a function of how you actually test for it.

We'll be able to demonstrate prevention of infection, at least as measured by serology, which is to say maybe somebody saw a little bit of the virus, but actually the antibodies kicked in and they never established enough to demonstrate antibodies against the other parts of the virus, the nuclear capsid.

That's actually what we will be measuring in the Phase 3 as a way to show protection from asymptomatic infection. I'm hopeful that we will be able to demonstrate that. I anticipate that -- I mean, just on first principles, what is the hardest thing for a vaccine to do? It's to sterilize. What's the next hardest? It's to prevent asymptomatic.

What's the easiest? It's probably to prevent the most severe disease. And so that's how I think about the order of expectations. But I think what you're really getting at is what is going to be the ability of this vaccine to prevent transmission.

And I think because I don't anticipate any easy direct measure of this, we're going to have to do some math once we see the data. I expect that if people get less sick and certainly less severe sick, they will be spreading less because I think there is -- while we have asymptomatic spread, we also have symptomatic spread.

And so -- and in fact, I think the higher the symptoms at least earlier in the disease, potentially the more the viral shedding you see. So that's a complicated equation that I think in a nutshell is going to be very hard to answer directly through some concrete measurement in the trial.

What we will hope to show is that we prevent asymptomatic infection based on serology. We will clearly hope to show prevention of symptomatic infection, that's the primary endpoint.

And based on first principles, which by the way, Phil Krause from FDA alluded to and agreed with last Thursday, one would anticipate that if you prevent symptomatic disease, you should -- it should be even clearer that you're preventing the more severe manifestation..

Thank you. And that concludes today's question-and-answer session. I would now like to turn the call back to Stéphane for any closing remarks..

Great. Thank you, operator. Well, thank you everybody for your time and your question and your support. Have a wonderful day, and speak soon. Stay safe everybody. Bye..

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