1 00:00:00,200 --> 00:00:04,680 Speaker 1: Maderna is trying to adjust basically to the post pandemic era. 2 00:00:04,720 --> 00:00:06,880 Speaker 1: The vaccine maker and a little bit of pressure today 3 00:00:06,920 --> 00:00:09,319 Speaker 1: this after reporting a large and expected loss. It's taken 4 00:00:09,360 --> 00:00:12,119 Speaker 1: a three point one billion dollar charge. It's basically writing 5 00:00:12,160 --> 00:00:15,640 Speaker 1: down excess COVID shots. Alex and I sat down with 6 00:00:15,720 --> 00:00:20,040 Speaker 1: the company's CEO a little earlier today. We started by 7 00:00:20,120 --> 00:00:22,720 Speaker 1: talking about that. Right down the market is focusing very 8 00:00:22,800 --> 00:00:25,320 Speaker 1: much on the one time resizing of the company. The 9 00:00:25,360 --> 00:00:28,480 Speaker 1: write down that you've taken. Is it a one time 10 00:00:28,560 --> 00:00:31,320 Speaker 1: hit we're talking about here. Is this something that we're 11 00:00:31,320 --> 00:00:33,519 Speaker 1: going to see next quarter and next quarter or is 12 00:00:33,520 --> 00:00:35,200 Speaker 1: it just going to be limited to this quarter? 13 00:00:36,400 --> 00:00:38,440 Speaker 2: So good morning and thank you for having me. It's 14 00:00:38,479 --> 00:00:42,000 Speaker 2: really one time restructuring. As we talked about that AI 15 00:00:42,120 --> 00:00:45,720 Speaker 2: day back when we spoke in September, we said, we're 16 00:00:45,720 --> 00:00:48,320 Speaker 2: going to write size manufacturing because you know, we've built 17 00:00:48,400 --> 00:00:52,680 Speaker 2: manufacturing to deal with the COVID you know, pandemic, but 18 00:00:52,800 --> 00:00:54,959 Speaker 2: now that we're going back into endemic setting, we don't 19 00:00:55,000 --> 00:00:58,440 Speaker 2: need as much capacity and our cost structure was too high, 20 00:00:58,520 --> 00:01:00,480 Speaker 2: so we took in a one time hit. There's a 21 00:01:00,520 --> 00:01:02,320 Speaker 2: tiny bit of it that we're being qure for just 22 00:01:02,320 --> 00:01:04,520 Speaker 2: because of a contain rule two hundred million and all 23 00:01:04,560 --> 00:01:06,680 Speaker 2: of that. But that's that's the one time thing with this. 24 00:01:07,120 --> 00:01:08,960 Speaker 2: We have the right size to deal with a company 25 00:01:09,240 --> 00:01:11,000 Speaker 2: and then we'll be able to grow with the new 26 00:01:11,040 --> 00:01:14,440 Speaker 2: plants that we're building in Canada, in the UK and Australia. 27 00:01:14,520 --> 00:01:16,959 Speaker 2: So it's going to be goode. 28 00:01:17,360 --> 00:01:19,520 Speaker 3: Just one more piece on that though, do we know 29 00:01:19,600 --> 00:01:22,399 Speaker 3: why the COVID uptake shot has just not been as good? 30 00:01:22,440 --> 00:01:24,760 Speaker 3: And I'm also wondering if there's been any sort of 31 00:01:25,200 --> 00:01:28,000 Speaker 3: shift because of how the US pays for it, like 32 00:01:28,040 --> 00:01:30,040 Speaker 3: it's not the government, it's now an insurance and has 33 00:01:30,040 --> 00:01:32,320 Speaker 3: that kind of changed the COVID take up? 34 00:01:33,520 --> 00:01:36,200 Speaker 2: So if you look at the COVID market in the US, 35 00:01:36,360 --> 00:01:39,360 Speaker 2: it's trending a little bit above last year. I think 36 00:01:39,360 --> 00:01:40,880 Speaker 2: it's still too early to tell where it's on to 37 00:01:40,920 --> 00:01:44,360 Speaker 2: finish the season, because we're hearing that there's still a 38 00:01:44,360 --> 00:01:47,120 Speaker 2: lot of desire to get vaccinated in November and December, 39 00:01:47,200 --> 00:01:50,120 Speaker 2: so let's see. But I don't think that it's a 40 00:01:50,120 --> 00:01:53,280 Speaker 2: commercial market has changed things because for the consumer it's 41 00:01:53,320 --> 00:01:56,480 Speaker 2: still free. If you're insured, you're to pharmacy, you get 42 00:01:56,520 --> 00:01:59,440 Speaker 2: your shot and you walk out, you don't pay anything 43 00:01:59,480 --> 00:02:02,640 Speaker 2: of COPAD. So I don't think the fact that it's 44 00:02:02,640 --> 00:02:04,080 Speaker 2: commercial now changes anything. 45 00:02:04,440 --> 00:02:07,240 Speaker 1: Stefan, you are going to be leaning much less now 46 00:02:07,480 --> 00:02:10,520 Speaker 1: on what is happening with COVID and focusing more elsewhere. 47 00:02:10,560 --> 00:02:15,520 Speaker 1: But nevertheless, I do wonder whether the scaling back of 48 00:02:15,560 --> 00:02:19,040 Speaker 1: the COVID side of the business means that ultimately you're 49 00:02:19,040 --> 00:02:21,760 Speaker 1: going to struggle to generate the top line the revenue 50 00:02:21,840 --> 00:02:24,919 Speaker 1: necessary to make that transition to the next phase. How 51 00:02:24,919 --> 00:02:27,000 Speaker 1: would you answer that kind of a question and that 52 00:02:27,080 --> 00:02:29,040 Speaker 1: kind of concern at the moment that exists. 53 00:02:29,400 --> 00:02:32,560 Speaker 2: Sure, I think there's two questions people have. It's first, 54 00:02:32,560 --> 00:02:35,600 Speaker 2: it's waste the bottom of COVID, and we think because 55 00:02:35,600 --> 00:02:37,720 Speaker 2: we announced this morning that we think the sales next 56 00:02:37,760 --> 00:02:40,320 Speaker 2: year will be around four billions or roe, we think 57 00:02:40,320 --> 00:02:43,600 Speaker 2: that's what's going to be the base of COVID. And 58 00:02:43,639 --> 00:02:45,680 Speaker 2: then it's a new product. As you know, we have 59 00:02:45,720 --> 00:02:48,080 Speaker 2: a platform. We talked about it many times on your show. 60 00:02:48,800 --> 00:02:51,560 Speaker 2: We have six products in phase three. As you know, 61 00:02:51,600 --> 00:02:54,280 Speaker 2: the biggest issue in the industry has is what's next 62 00:02:55,400 --> 00:02:57,720 Speaker 2: Because of a platform six Phase three will be the 63 00:02:57,800 --> 00:03:00,679 Speaker 2: launch v next year. We have flu product with great 64 00:03:00,720 --> 00:03:04,840 Speaker 2: face free data through COVID Combo. The cancer product launching 65 00:03:04,840 --> 00:03:06,720 Speaker 2: in twenty five. So if you think about it, we 66 00:03:06,800 --> 00:03:09,120 Speaker 2: think that we have a four billion each of COVID 67 00:03:09,240 --> 00:03:11,519 Speaker 2: base and then you're going to lay on that new 68 00:03:11,560 --> 00:03:14,240 Speaker 2: products coming and those products are very very close Sartink 69 00:03:14,240 --> 00:03:14,880 Speaker 2: in twenty four. 70 00:03:15,200 --> 00:03:16,720 Speaker 3: So you have to get there though first, and you're 71 00:03:16,800 --> 00:03:18,720 Speaker 3: planning to spend like twenty five billion over the next 72 00:03:18,760 --> 00:03:21,560 Speaker 3: five years. If you don't reach that four billion dollar 73 00:03:21,960 --> 00:03:25,320 Speaker 3: base for COVID shots, when do you start considering cutting 74 00:03:25,320 --> 00:03:26,760 Speaker 3: your other programs. 75 00:03:27,560 --> 00:03:29,720 Speaker 2: Yeah, so we look into into this if we have to. 76 00:03:29,800 --> 00:03:31,880 Speaker 2: I think it's more for a twenty five timeframe. I 77 00:03:31,919 --> 00:03:34,679 Speaker 2: think in twenty four we're pretty comfortable with the numbers. 78 00:03:34,880 --> 00:03:37,840 Speaker 2: The other piece of IC we just talked about the URSV. 79 00:03:38,000 --> 00:03:40,640 Speaker 2: We have the best in class product, we believe, with 80 00:03:40,960 --> 00:03:44,320 Speaker 2: very high efficacy, very good safety, and it's going to 81 00:03:44,360 --> 00:03:46,880 Speaker 2: be very good because it's pre fill syringe. The other 82 00:03:46,960 --> 00:03:50,040 Speaker 2: products on the market today have many, many steps of preparation. 83 00:03:50,360 --> 00:03:53,360 Speaker 2: As you know, in pharmacies, you even have workers walking 84 00:03:53,440 --> 00:03:57,120 Speaker 2: out on strike because it's too complicated, the workload is 85 00:03:57,160 --> 00:03:59,680 Speaker 2: too big, and that's a big market just on a 86 00:03:59,760 --> 00:04:02,920 Speaker 2: que free sales. The two players in the market reported 87 00:04:03,040 --> 00:04:05,720 Speaker 2: one point two billion dollar four the quarter you're free. 88 00:04:05,840 --> 00:04:07,440 Speaker 2: So if you think about this market, that's a brand 89 00:04:07,480 --> 00:04:10,480 Speaker 2: new market. We might be the leading company once we launch, 90 00:04:10,560 --> 00:04:11,960 Speaker 2: because we believe we're the best product. 91 00:04:12,360 --> 00:04:15,480 Speaker 1: Stephan. The biotech sector is getting hit pretty hard right now, 92 00:04:15,480 --> 00:04:19,600 Speaker 1: certainly within the stock market, and I'm wondering when you 93 00:04:19,680 --> 00:04:21,560 Speaker 1: think that phase is going to bottom out, And I'm 94 00:04:21,600 --> 00:04:23,240 Speaker 1: wanting as well, whether or not you think there are 95 00:04:23,240 --> 00:04:26,440 Speaker 1: opportunities within there. You're doing quite a lot of the 96 00:04:26,440 --> 00:04:28,560 Speaker 1: moment with what you've got, but I'm wondering as you 97 00:04:28,560 --> 00:04:31,880 Speaker 1: look a lot across the landscape whether there would be 98 00:04:32,000 --> 00:04:36,240 Speaker 1: potential boltons at current valuations. Are you going through that 99 00:04:36,320 --> 00:04:39,520 Speaker 1: process at the moment thinking of how synergies, how opportunities 100 00:04:39,520 --> 00:04:40,040 Speaker 1: could evolve. 101 00:04:40,480 --> 00:04:42,799 Speaker 2: Yes, very much so. I mean we bought a company 102 00:04:42,800 --> 00:04:46,760 Speaker 2: in Japan during the Christmas break last year. We've done 103 00:04:46,839 --> 00:04:50,480 Speaker 2: couple of dealers this year, company in Germany, company in 104 00:04:50,520 --> 00:04:54,200 Speaker 2: the US. So we think there's very interesting companies are there. 105 00:04:54,200 --> 00:04:57,760 Speaker 2: As you say, the environment for biotech is very hard now, 106 00:04:57,800 --> 00:04:59,920 Speaker 2: and I think as long as the long term or 107 00:05:00,160 --> 00:05:03,920 Speaker 2: it's stay high. You know, biotech because it's many many 108 00:05:04,000 --> 00:05:08,200 Speaker 2: years to launch, and it's quite risky, a very different 109 00:05:08,240 --> 00:05:10,400 Speaker 2: cost of capital than it choosed to have when you 110 00:05:10,400 --> 00:05:12,640 Speaker 2: know interest rates work close to zero. So that's the 111 00:05:12,760 --> 00:05:15,200 Speaker 2: issue that biotech is facing us in industry. So as 112 00:05:15,200 --> 00:05:19,080 Speaker 2: you say, there's some good companies that maybe went public 113 00:05:19,120 --> 00:05:21,920 Speaker 2: too early that maybe I'm not the right size of 114 00:05:22,040 --> 00:05:24,760 Speaker 2: burn compared to the ability to raise money. So it 115 00:05:24,760 --> 00:05:28,279 Speaker 2: gives the company like Modern the ability to really size 116 00:05:28,320 --> 00:05:30,880 Speaker 2: opportunity like we have done and will continue to look into. 117 00:05:31,600 --> 00:05:33,640 Speaker 3: So when you're looking at those opportunities, do any of 118 00:05:33,640 --> 00:05:36,839 Speaker 3: those opportunities include weightless drugs? Are you in the wrong 119 00:05:36,839 --> 00:05:37,799 Speaker 3: shop business here? 120 00:05:38,520 --> 00:05:38,560 Speaker 1: No? 121 00:05:38,720 --> 00:05:41,599 Speaker 2: Actually, you know we're focused on infectious disease and cancer. 122 00:05:41,680 --> 00:05:43,680 Speaker 2: This is a two big priority of a company in 123 00:05:43,760 --> 00:05:48,000 Speaker 2: the latent virus and also rare disease. We want to 124 00:05:48,000 --> 00:05:49,680 Speaker 2: focus where our streps is that you know, there's a 125 00:05:49,720 --> 00:05:52,039 Speaker 2: lot of players in that market, many more coming with 126 00:05:52,120 --> 00:05:56,159 Speaker 2: pipeline products potentially even some oral products that will disrupt 127 00:05:56,200 --> 00:05:58,640 Speaker 2: the market as well. So we're focusing on our streps 128 00:05:58,640 --> 00:06:01,040 Speaker 2: and where we can ad value to patients and shoulders. 129 00:06:01,520 --> 00:06:04,800 Speaker 1: In terms of the opportunity you see in front of you, 130 00:06:05,520 --> 00:06:07,279 Speaker 1: do you think there's a danger at the moment that 131 00:06:07,360 --> 00:06:11,520 Speaker 1: you are almost spread too thin, that the opportunity could 132 00:06:11,520 --> 00:06:14,560 Speaker 1: be more focused, that maybe actually you do need to 133 00:06:14,640 --> 00:06:17,400 Speaker 1: maybe do a little less but do more in those 134 00:06:17,440 --> 00:06:23,479 Speaker 1: areas can Are you convinced that your current trajectory with 135 00:06:23,640 --> 00:06:27,240 Speaker 1: the areas that you're focusing on is at the right 136 00:06:27,320 --> 00:06:29,400 Speaker 1: level or do you think at some point there is 137 00:06:29,400 --> 00:06:30,840 Speaker 1: going to be a winnowing process here. 138 00:06:31,240 --> 00:06:32,560 Speaker 2: So I think we're at the right level. 139 00:06:32,720 --> 00:06:33,000 Speaker 3: Now. 140 00:06:33,480 --> 00:06:37,240 Speaker 2: You know, we stopped working on cardio products. We are 141 00:06:37,240 --> 00:06:40,359 Speaker 2: in the personal partnership with austrasny CAD. This is what's stopped. 142 00:06:40,680 --> 00:06:44,400 Speaker 2: We're really focusing on infectious disease because again the platform 143 00:06:44,520 --> 00:06:47,040 Speaker 2: allows us to do a lot of products with the 144 00:06:47,080 --> 00:06:50,640 Speaker 2: same science, with a sem manufacturing footprint, with the same 145 00:06:50,640 --> 00:06:53,880 Speaker 2: commercial team. If you think about it, COVID, V FLU 146 00:06:53,960 --> 00:06:57,520 Speaker 2: and those combos. We always talk to infectious disease doctors. 147 00:06:57,839 --> 00:06:59,320 Speaker 2: So we think that's a very important part of a 148 00:06:59,400 --> 00:07:02,120 Speaker 2: company and we can really scale that part very well. 149 00:07:02,160 --> 00:07:05,160 Speaker 2: We have now thirty programs in development, but it's always 150 00:07:05,400 --> 00:07:10,480 Speaker 2: same technology, sam manufacturing tools, and same commercial teams. In cancer, 151 00:07:10,800 --> 00:07:13,000 Speaker 2: we partnered with merk as you know, with a K 152 00:07:13,160 --> 00:07:15,480 Speaker 2: you drawer, and so we're going to be basically partnering 153 00:07:15,520 --> 00:07:18,720 Speaker 2: with one of the biggest and best oncology company to 154 00:07:18,800 --> 00:07:22,240 Speaker 2: bring our technology to improve the performance of kit you 155 00:07:22,320 --> 00:07:25,720 Speaker 2: draw alone. So we think that's very synergistic. We're focusing 156 00:07:25,720 --> 00:07:28,640 Speaker 2: on the science, on the clinic, on manufacturing because we 157 00:07:28,720 --> 00:07:30,640 Speaker 2: know how to make a command the pretty well at scale. 158 00:07:30,960 --> 00:07:33,800 Speaker 2: MERK will focus on the commercial side of that proposition 159 00:07:34,200 --> 00:07:37,120 Speaker 2: because we have a relationship with doctors and real disease 160 00:07:37,480 --> 00:07:41,360 Speaker 2: is really a very small endeavor because it's regilatic disease. 161 00:07:41,440 --> 00:07:43,920 Speaker 2: You have hundreds of thousands of kids. We have a 162 00:07:43,920 --> 00:07:47,240 Speaker 2: small educated team doing that, but because kids have no option, 163 00:07:47,720 --> 00:07:49,960 Speaker 2: that's not very heavy lift commercially. 164 00:07:50,160 --> 00:07:52,160 Speaker 3: How was there interview with Stuffan ban So, I'm a 165 00:07:52,240 --> 00:07:52,960 Speaker 3: jouring a CEO.