Moderna CEO on importance of FDA approval: It's 'the credibility of our vaccine'

Moderna posted earnings that beat expectations. Moderna CEO Stéphane Bancel joins Yahoo Finance Live to discuss.

Video Transcript

AKIKO FUJITA: Let's turn our attention to another stock that has been a big mover in the session. Shares of Moderna down now. But it did hit a new high in the session after beating on the top and bottom lines in the second quarter. The company saying this morning its COVID-19 vaccine booster shot produced a robust immune response against three variants, including the highly contagious Delta variant in its phase II trial.

For much more on this, let's bring in the CEO of Moderna, Stéphane Bancel. He's also joined by our very own Anjalee Khemlani. And Stéphane, it's always good to talk to you.

You know, there's a lot of people today who got the Moderna shot who are asking themselves, you know, how much longer can this vaccine sort of perform against this surge in the Delta variant? How should we be thinking about the efficacy of it sort of 6 months on from rollout and the timing of a potential booster shot come fall?

STÉPHANE BANCEL: Yes. So good morning. And thank you for having me back.

So it's a complicated scientific question. There's a few components. The first one is duration.

I think the great news from this morning for people who got the Moderna vaccine or for people that are thinking about getting the Moderna vaccine is we saw the efficacy really holds very nicely versus what we communicated. If you remember back in the fall, we communicated on the 94% efficacy at the time. That's the data we had.

And now if you look at the data for 6 months, we're holding very nicely at 93% efficacy. And that's going to be the final cut of the data as we file the BLA. We started filing the BLA on a rolling basis in May. And we communicated this morning that we are on track to finish the full filing in August this month.

And so I think the duration looks really good, most probably the best vaccine in the world.

Then the next version is variants. Because of course, the virus has evolved away from the original virus. You don't have all the antibodies that you need because of a mutation on that virus.

But the good news with vaccines is, you don't make one antibody. You make a soup of antibody. And so you get a very broad protection.

What we've shown is we believe that over time boosting is going to be important. The great news is we've tested a lot of boosts in the clinic, including boosting with the same vaccine that is available today in pharmacies in the US. And the great news is that at even half the dose of the initial vaccine, we're getting incredible boosting.

If you get the antibody developed after a second dose versus antibody developed in the clinical study after a third dose against the Delta variant, we've got a 42x increase in antibody. 42x, that's 42%. And so it's a very positive surprise for the world.

And so I think that if you think about it, a bit like a vaccine, like in the flu vaccine that you need an annual shot, I think boosting is going to be important to keep those antibodies very high and to keep adapting your antibody response to the currently circulating virus. And so as soon as a vaccine booster is authorized by the FDA, I want my fill of those because I want to be able to spend a very nice winter and not be sick.

ANJALEE KHEMLANI: Hopefully, we'll definitely get to do that. Stéphane, good to talk to you again.

I want to pull back from the boosters. And let's talk about just the initial rollout for some countries in the world, the World Health Organization, calling on a moratorium of boosters in wealthier countries in order to help the rest of the world catch up with the first round, at least for September. We just got word from Reuters that Israel, Germany, and France are going to continue their booster programs.

I wonder, do you have any thoughts on sort of what your role is in helping the World Health Organization reach this goal and enforcing a sort of moratorium? And is there anything you can specifically do as a company? They've called on the producers to do so as well.

STÉPHANE BANCEL: Yes, it's a very good question. And it's a big challenge that we're facing as a world because every government has a mandate and wants to protect their citizens. So we cannot do much as a manufacturer because if a country that you mentioned wants to use the current vaccine on hand for which we share the boosting for those data, that is, where again, the 42 times increase of antibodies with use after the second dose, we can do nothing to stop them.

The vaccines are in their warehouse. We have a legal commitment to ship the current vaccine because we don't know as a company if it goes toward vaccinating people that have never been vaccinated or boosters. So yeah, I think a discussion that needs happen between [INAUDIBLE] other countries. I don't see the manufacturers can impact that because it's not a different product. It is at this point the exact same vial.

ANJALEE KHEMLANI: Well, definitely have to see how the other countries take hold of that moratorium.

But moving on to the valuation of the company. I know that's an area that there's been a lot of attention in the past couple of months as you have pivoted from not just the COVID vaccine, but also to the rest of the pipeline. This is a new relationship. What do you think this boost in market valuation means about market sentiment towards mRNA technology?

STÉPHANE BANCEL: I think if you look at the company, the company is, I think, on a great trajectory. And I think we're just getting started because unlike other biotech company, we have a platform. You know, for the last 100 years, we have small molecule every drug is different. And most drugs fail in the clinic because of safety issue.

If you look at the world in which we are today, it's a world of information molecule, like mRNA. In the case of Moderna, which I think is a quite unique situation because we don't have a partner. We keep all of our profit of every asset. We have very strong cash balance.

We disclosed this morning $20 billion in APAs signed for this year. Already $12 billion signed for next year, plus another $8 billion of options that countries have. And still many, many discussions. We are planning to double or triple our output of product next year. And this year, with less than a billion dollars of supply, we're going to get to $20 billion of revenues.

And so if you look at the profitability of a company, $2.8 billion of net income this quarter alone. If you just assume we don't grow the sales, which we are. Because if you look at the sales far in the year, it's $6 billion. We're saying $20 billion for a year. So it assume a very strong ramp continuing as we saw in Q4, Q1, and then Q2 now.

And if you look at the cost line, it is not growing as fast as the top line. And even the gross margin is improving. And so if you look at the earnings of a company, as you can see on the screen, $6.45, if you are just going break it down by 4 and look at the stock price, this is not a high PE.

And Moderna is going to move from 21 being a prime vaccine company in 22 boosters, we say that of flu vaccine, which is in the clinic now for which we're planning phase II and phase II already, could be launched as early as '23. And then you have RSV, for which we get fast-tracked by the FDA earlier this week, and then CMV.

So if you look at the company where it's heading, I believe it is a very strong momentum. We also have six therapeutic in the clinic, in cancer, in cardiology, in autoimmune disease, in rare genetic disease. And now that we have a strong cash balance, we're increasing our investment. Today with 24 drugs in development. But could it be 40 drugs in development in the next 12 months? I think it's possible.

Would it be harder drug and development in a few years from now? That's our plan. And so I think that what the markets like to realize is the company is not one drug company. It's actually a platform.

ANJALEE KHEMLANI: Sorry. I think we lost him there. Or if he can still hear me.

I am curious about the FDA approval. I know you mentioned the FDA. So tell me about the approval-- the full approval-- that you're looking for because we know there's been a lot of focus on Pfizer right now and their full approval for the COVID vaccine. So I know you've already filed, but when do you-- has there been any word on when you might get them?

STÉPHANE BANCEL: So it's a big question on how long it would take the FDA to approve the vaccine. And I think the Pfizer approval is going to be a good indication for us. My understanding is, Pfizer finished to file its BLA in July. We are reading in the media that it could be late August, September approval.

I just told you we're going to finish our filing in August. So if it takes one month or a month and a half to Pfizer to get approved, I think a similar magnitude for Moderna is possible. Again, it is not in our call. It's really for the FDA and the team to do their review.

And this is very important it's done thoroughly. It's the credibility of the agency that's on the line. It's the credibility of our vaccine. And so we really want this to be done as punctual as possible. And I trust the FDA to make sure this is done in such a manner.

ZACK GUZMAN: Stéphane, Zack here. Thanks for coming back on, man. Just wanted to ask one question. You're kind of walking through the revenue expectations there, as you said. Expect the $20 billion for this year. And you've got to see what happens in the next couple of years. But roughly on par.

It is interesting to think about boosters and just kind of where we're at and the longer it takes to get the world vaccinated, the idea that you're going to continuously need more and more boosters to catch up to all these variants. I mean, when you look at that, how does Moderna as a company kind of, I guess, assess the sliding scale between everyone getting vaccinated now could solve a lot of these issues, but also kind of the added revenue that could come from the additional boosters further and further down the line if we do see variants continue to pop up?

STÉPHANE BANCEL: So we are making as many vaccine as we can. We announced a new manufacturing investment. So we are not at all conserving for, let's not do too many vaccines so the variant's still evolving. This would be unethical.

We are working as hard as we can to get as many doses as we can out. The virus is out of the bag. If you think about it, we're gonna have to live with this virus that we have lived for many thousands of years with flu. There are more coronaviruses circulating in the population, like OC43, that get people hospitalized every year.

So what we want to do is to make sure to get boosters so that people can live with this virus and have their life back again.

AKIKO FUJITA: Moderna CEO, Stéphane Bancel, always good to have you join us. And our thanks to Anjalee Khemlani for joining in on the conversation as well.