00:00:00
Speaker 1: Maderna is trying to adjust basically to the post pandemic era. The vaccine maker and a little bit of pressure today this after reporting a large and expected loss. It's taken a three point one billion dollar charge. It's basically writing down excess COVID shots. Alex and I sat down with the company's CEO a little earlier today. We started by talking about that. Right down the market is focusing very much on the one time resizing of the company. The write down that you've taken. Is it a one time hit we're talking about here. Is this something that we're going to see next quarter and next quarter or is it just going to be limited to this quarter?
00:00:36
Speaker 2: So good morning and thank you for having me. It's really one time restructuring. As we talked about that AI day back when we spoke in September, we said, we're going to write size manufacturing because you know, we've built manufacturing to deal with the COVID you know, pandemic, but now that we're going back into endemic setting, we don't need as much capacity and our cost structure was too high, so we took in a one time hit. There's a tiny bit of it that we're being qure for just because of a contain rule two hundred million and all of that. But that's that's the one time thing with this. We have the right size to deal with a company and then we'll be able to grow with the new plants that we're building in Canada, in the UK and Australia. So it's going to be goode.
00:01:17
Speaker 3: Just one more piece on that though, do we know why the COVID uptake shot has just not been as good? And I'm also wondering if there's been any sort of shift because of how the US pays for it, like it's not the government, it's now an insurance and has that kind of changed the COVID take up?
00:01:33
Speaker 2: So if you look at the COVID market in the US, it's trending a little bit above last year. I think it's still too early to tell where it's on to finish the season, because we're hearing that there's still a lot of desire to get vaccinated in November and December, so let's see. But I don't think that it's a commercial market has changed things because for the consumer it's still free. If you're insured, you're to pharmacy, you get your shot and you walk out, you don't pay anything of COPAD. So I don't think the fact that it's commercial now changes anything.
00:02:04
Speaker 1: Stefan, you are going to be leaning much less now on what is happening with COVID and focusing more elsewhere. But nevertheless, I do wonder whether the scaling back of the COVID side of the business means that ultimately you're going to struggle to generate the top line the revenue necessary to make that transition to the next phase. How would you answer that kind of a question and that kind of concern at the moment that exists.
00:02:29
Speaker 2: Sure, I think there's two questions people have. It's first, it's waste the bottom of COVID, and we think because we announced this morning that we think the sales next year will be around four billions or roe, we think that's what's going to be the base of COVID. And then it's a new product. As you know, we have a platform. We talked about it many times on your show. We have six products in phase three. As you know, the biggest issue in the industry has is what's next Because of a platform six Phase three will be the launch v next year. We have flu product with great face free data through COVID Combo. The cancer product launching in twenty five. So if you think about it, we think that we have a four billion each of COVID base and then you're going to lay on that new products coming and those products are very very close Sartink in twenty four.
00:03:15
Speaker 3: So you have to get there though first, and you're planning to spend like twenty five billion over the next five years. If you don't reach that four billion dollar base for COVID shots, when do you start considering cutting your other programs.
00:03:27
Speaker 2: Yeah, so we look into into this if we have to. I think it's more for a twenty five timeframe. I think in twenty four we're pretty comfortable with the numbers. The other piece of IC we just talked about the URSV. We have the best in class product, we believe, with very high efficacy, very good safety, and it's going to be very good because it's pre fill syringe. The other products on the market today have many, many steps of preparation. As you know, in pharmacies, you even have workers walking out on strike because it's too complicated, the workload is too big, and that's a big market just on a que free sales. The two players in the market reported one point two billion dollar four the quarter you're free. So if you think about this market, that's a brand new market. We might be the leading company once we launch, because we believe we're the best product.
00:04:12
Speaker 1: Stephan. The biotech sector is getting hit pretty hard right now, certainly within the stock market, and I'm wondering when you think that phase is going to bottom out, And I'm wanting as well, whether or not you think there are opportunities within there. You're doing quite a lot of the moment with what you've got, but I'm wondering as you look a lot across the landscape whether there would be potential boltons at current valuations. Are you going through that process at the moment thinking of how synergies, how opportunities could evolve.
00:04:40
Speaker 2: Yes, very much so. I mean we bought a company in Japan during the Christmas break last year. We've done couple of dealers this year, company in Germany, company in the US. So we think there's very interesting companies are there. As you say, the environment for biotech is very hard now, and I think as long as the long term or it's stay high. You know, biotech because it's many many years to launch, and it's quite risky, a very different cost of capital than it choosed to have when you know interest rates work close to zero. So that's the issue that biotech is facing us in industry. So as you say, there's some good companies that maybe went public too early that maybe I'm not the right size of burn compared to the ability to raise money. So it gives the company like Modern the ability to really size opportunity like we have done and will continue to look into.
00:05:31
Speaker 3: So when you're looking at those opportunities, do any of those opportunities include weightless drugs? Are you in the wrong shop business here?
00:05:38
Speaker 1: No?
00:05:38
Speaker 2: Actually, you know we're focused on infectious disease and cancer. This is a two big priority of a company in the latent virus and also rare disease. We want to focus where our streps is that you know, there's a lot of players in that market, many more coming with pipeline products potentially even some oral products that will disrupt the market as well. So we're focusing on our streps and where we can ad value to patients and shoulders.
00:06:01
Speaker 1: In terms of the opportunity you see in front of you, do you think there's a danger at the moment that you are almost spread too thin, that the opportunity could be more focused, that maybe actually you do need to maybe do a little less but do more in those areas can Are you convinced that your current trajectory with the areas that you're focusing on is at the right level or do you think at some point there is going to be a winnowing process here.
00:06:31
Speaker 2: So I think we're at the right level.
00:06:32
Speaker 3: Now.
00:06:33
Speaker 2: You know, we stopped working on cardio products. We are in the personal partnership with austrasny CAD. This is what's stopped. We're really focusing on infectious disease because again the platform allows us to do a lot of products with the same science, with a sem manufacturing footprint, with the same commercial team. If you think about it, COVID, V FLU and those combos. We always talk to infectious disease doctors. So we think that's a very important part of a company and we can really scale that part very well. We have now thirty programs in development, but it's always same technology, sam manufacturing tools, and same commercial teams. In cancer, we partnered with merk as you know, with a K you drawer, and so we're going to be basically partnering with one of the biggest and best oncology company to bring our technology to improve the performance of kit you draw alone. So we think that's very synergistic. We're focusing on the science, on the clinic, on manufacturing because we know how to make a command the pretty well at scale. MERK will focus on the commercial side of that proposition because we have a relationship with doctors and real disease is really a very small endeavor because it's regilatic disease. You have hundreds of thousands of kids. We have a small educated team doing that, but because kids have no option, that's not very heavy lift commercially.
00:07:50
Speaker 3: How was there interview with Stuffan ban So, I'm a jouring a CEO.
Speaker 1: Maderna is trying to adjust basically to the post pandemic era. The vaccine maker and a little bit of pressure today this after reporting a large and expected loss. It's taken a three point one billion dollar charge. It's basically writing down excess COVID shots. Alex and I sat down with the company's CEO a little earlier today. We started by talking about that. Right down the market is focusing very much on the one time resizing of the company. The write down that you've taken. Is it a one time hit we're talking about here. Is this something that we're going to see next quarter and next quarter or is it just going to be limited to this quarter?
00:00:36
Speaker 2: So good morning and thank you for having me. It's really one time restructuring. As we talked about that AI day back when we spoke in September, we said, we're going to write size manufacturing because you know, we've built manufacturing to deal with the COVID you know, pandemic, but now that we're going back into endemic setting, we don't need as much capacity and our cost structure was too high, so we took in a one time hit. There's a tiny bit of it that we're being qure for just because of a contain rule two hundred million and all of that. But that's that's the one time thing with this. We have the right size to deal with a company and then we'll be able to grow with the new plants that we're building in Canada, in the UK and Australia. So it's going to be goode.
00:01:17
Speaker 3: Just one more piece on that though, do we know why the COVID uptake shot has just not been as good? And I'm also wondering if there's been any sort of shift because of how the US pays for it, like it's not the government, it's now an insurance and has that kind of changed the COVID take up?
00:01:33
Speaker 2: So if you look at the COVID market in the US, it's trending a little bit above last year. I think it's still too early to tell where it's on to finish the season, because we're hearing that there's still a lot of desire to get vaccinated in November and December, so let's see. But I don't think that it's a commercial market has changed things because for the consumer it's still free. If you're insured, you're to pharmacy, you get your shot and you walk out, you don't pay anything of COPAD. So I don't think the fact that it's commercial now changes anything.
00:02:04
Speaker 1: Stefan, you are going to be leaning much less now on what is happening with COVID and focusing more elsewhere. But nevertheless, I do wonder whether the scaling back of the COVID side of the business means that ultimately you're going to struggle to generate the top line the revenue necessary to make that transition to the next phase. How would you answer that kind of a question and that kind of concern at the moment that exists.
00:02:29
Speaker 2: Sure, I think there's two questions people have. It's first, it's waste the bottom of COVID, and we think because we announced this morning that we think the sales next year will be around four billions or roe, we think that's what's going to be the base of COVID. And then it's a new product. As you know, we have a platform. We talked about it many times on your show. We have six products in phase three. As you know, the biggest issue in the industry has is what's next Because of a platform six Phase three will be the launch v next year. We have flu product with great face free data through COVID Combo. The cancer product launching in twenty five. So if you think about it, we think that we have a four billion each of COVID base and then you're going to lay on that new products coming and those products are very very close Sartink in twenty four.
00:03:15
Speaker 3: So you have to get there though first, and you're planning to spend like twenty five billion over the next five years. If you don't reach that four billion dollar base for COVID shots, when do you start considering cutting your other programs.
00:03:27
Speaker 2: Yeah, so we look into into this if we have to. I think it's more for a twenty five timeframe. I think in twenty four we're pretty comfortable with the numbers. The other piece of IC we just talked about the URSV. We have the best in class product, we believe, with very high efficacy, very good safety, and it's going to be very good because it's pre fill syringe. The other products on the market today have many, many steps of preparation. As you know, in pharmacies, you even have workers walking out on strike because it's too complicated, the workload is too big, and that's a big market just on a que free sales. The two players in the market reported one point two billion dollar four the quarter you're free. So if you think about this market, that's a brand new market. We might be the leading company once we launch, because we believe we're the best product.
00:04:12
Speaker 1: Stephan. The biotech sector is getting hit pretty hard right now, certainly within the stock market, and I'm wondering when you think that phase is going to bottom out, And I'm wanting as well, whether or not you think there are opportunities within there. You're doing quite a lot of the moment with what you've got, but I'm wondering as you look a lot across the landscape whether there would be potential boltons at current valuations. Are you going through that process at the moment thinking of how synergies, how opportunities could evolve.
00:04:40
Speaker 2: Yes, very much so. I mean we bought a company in Japan during the Christmas break last year. We've done couple of dealers this year, company in Germany, company in the US. So we think there's very interesting companies are there. As you say, the environment for biotech is very hard now, and I think as long as the long term or it's stay high. You know, biotech because it's many many years to launch, and it's quite risky, a very different cost of capital than it choosed to have when you know interest rates work close to zero. So that's the issue that biotech is facing us in industry. So as you say, there's some good companies that maybe went public too early that maybe I'm not the right size of burn compared to the ability to raise money. So it gives the company like Modern the ability to really size opportunity like we have done and will continue to look into.
00:05:31
Speaker 3: So when you're looking at those opportunities, do any of those opportunities include weightless drugs? Are you in the wrong shop business here?
00:05:38
Speaker 1: No?
00:05:38
Speaker 2: Actually, you know we're focused on infectious disease and cancer. This is a two big priority of a company in the latent virus and also rare disease. We want to focus where our streps is that you know, there's a lot of players in that market, many more coming with pipeline products potentially even some oral products that will disrupt the market as well. So we're focusing on our streps and where we can ad value to patients and shoulders.
00:06:01
Speaker 1: In terms of the opportunity you see in front of you, do you think there's a danger at the moment that you are almost spread too thin, that the opportunity could be more focused, that maybe actually you do need to maybe do a little less but do more in those areas can Are you convinced that your current trajectory with the areas that you're focusing on is at the right level or do you think at some point there is going to be a winnowing process here.
00:06:31
Speaker 2: So I think we're at the right level.
00:06:32
Speaker 3: Now.
00:06:33
Speaker 2: You know, we stopped working on cardio products. We are in the personal partnership with austrasny CAD. This is what's stopped. We're really focusing on infectious disease because again the platform allows us to do a lot of products with the same science, with a sem manufacturing footprint, with the same commercial team. If you think about it, COVID, V FLU and those combos. We always talk to infectious disease doctors. So we think that's a very important part of a company and we can really scale that part very well. We have now thirty programs in development, but it's always same technology, sam manufacturing tools, and same commercial teams. In cancer, we partnered with merk as you know, with a K you drawer, and so we're going to be basically partnering with one of the biggest and best oncology company to bring our technology to improve the performance of kit you draw alone. So we think that's very synergistic. We're focusing on the science, on the clinic, on manufacturing because we know how to make a command the pretty well at scale. MERK will focus on the commercial side of that proposition because we have a relationship with doctors and real disease is really a very small endeavor because it's regilatic disease. You have hundreds of thousands of kids. We have a small educated team doing that, but because kids have no option, that's not very heavy lift commercially.
00:07:50
Speaker 3: How was there interview with Stuffan ban So, I'm a jouring a CEO.
