GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - VAXCYTE INC

All right. Good afternoon, everybody. Welcome to Guggenheim's Healthcare Innovation Conference. I'm Seamus Fernandez, one of the senior biopharma analysts here at Guggeheim, and I am really pleased to be joined again this year by the VACC site team. You know, not necessarily spelled the same, sounds an awful lot like the namesake, but Andrew Gugenheim is immediately to my right, president and CFO, Jim Wassel to his right, EVP, COO and CSO, and Mike Millett, the chief commercial officer. So, you know, maybe we'll just kind of kick off. You know, let's talk about the VAX 31 adult program just as a starting point. But actually, Andrew, I did want you to jump in, maybe provide some introductory thoughts on the state of the business before we get right there and you know just the vaccines market in general as you see it great well first of all thanks to Seamus to you and to your colleagues at Guggenheim for the opportunity to be here at the conference to present today great to be look this is a very exciting time for vac site for those who do you that are less familiar with the company we are exclusively focused on developing and commercializing novel vaccines to prevent or treat bacterial infectious diseases we have a proprietary technology platform that allows us to do to make and develop vaccines to address some of the limitations that the conventional technologies face and we are leveraging that proprietary technology across our pipeline of vaccines led by our pneumococcal conjugate vaccine or pcb franchise and jamis you asked about vax31 this is a eight eight and a half billion dollar global market comprised two two and a half, three billion in the adult segment, and the balance in the infant segment. Market projections forecast a growth in this market from the eight and a 1.5 billion today to 12 billion or so over the next several years, really driven by growth in the adults market, both here in the United States as well as outside the country. And to that end, we are coming off about a month away, removed from our results from our first pivotal phase three study of Vax31, our PCV, a 31-valent PCV in the adult population. The data exceeded our own expectations and we're thrilled to have the profile that we see with this vaccine. I know we'll get into that. And that study is the anchor for our phase three program of VX31 in adults to ultimately enable a BLA submission. The rest of the program is comprised of the Opus 2 and Opus 3 studies for which we expect aid in the first half of next year, as well as a manufacturing consistency study, all to enable a BLA submission for which were guiding in the 1st half of 2028. And in parallel with the clinical and manufacturing activities over the next several quarters to enable that submission beginning to prepare for a commercial launch in this large and growing market. The infant segment is today larger, that's likely to ultimately equalize over time based on the growth in the adult market in our forecast. And we have a 31-valent infant program underway where we have completed enrollment and expecting data from that phase two study. By the end of the first half of next year, we can talk, if we get into it, about our unblinding and disclosure strategy. So those adult and infant programs are really what anchors this company and couldn't be more thrilled with the adult data and looking forward with high anticipations for the upcoming infant data readout. And I'll cover one other aspect of our pipeline before we get into Q&A. We also have in the clinic our Vax A1 program to prevent group A strep. This is a program for which there's also an adult and infant opportunity. And we just announced last week we've advanced to the stage two portion of a phase one study in adults, the primary purpose of which is to explore the safety and tolerability of the vaccine, but ultimately to gather a data set that will enable us to move into the school-aged children population in a phase two study Where we can believe we can demonstrate it with a reasonably sized study efficacy study whether we see The efficacy responses to further advance the program so super excited to be here today We did on the heels of our readout last month Consummate a billion dollar financing comprised of an equity and convert We now have pro forma for that financing, about $3.4 billion on the balance sheet as of the end of September. So well financed to advance all of our programs forward, and importantly with this financing, to fully fund the expected launch of X31 in adults. Great. So, you know, maybe we can just talk about the Opus 1 top line results. You know, robust data, but I'll leave it for you guys to kind of remind us how strong those data were. Yeah. Well, for me, they exceeded my expectations. I think the results speak for themselves. According to our protocol, we didn't miss on any of the primary endpoints. We went 11 for 11 for the serotypes that were in PCV20 and PCV21 and Vax31. We Went 9 for 9 for the ones in 20 and R31. And we went 8 for 8 for the one's in Capvax and that were on our vaccine, as well as meeting the superiority for the three that are in neither plus cross-reactive 20B. So overall, we also had a number of results that were statistically greater. You know, while that's not going to be as clinically relevant, it's good to see that the immunogenicity was sustained or improved in these overall results. Great. So, you know, maybe just in terms of some of the FDA's kind of thresholds. Can you just remind us a little bit of the kind of more stringent threshold, what that means, and honestly, what it means for incremental potential competitors? Yeah. So the FDA has been watching each subsequent time that a new vaccine has been approved from 7 to 13, 13 to 15, 15 to 20, 20 and so forth, which has happened because of carrier suppression, immunogenicity has decreased for all of the serotypes on average. So it wasn't just one or two that were lower. On average, you know, 20-25% decrease each time. Well, they're saying, okay, they are calling this immunologic creep. So they are saying, okay, we understand that there is a tradeoff. We are getting greater breadth of coverage, more contemporary circulating disease but we don't want to continue to sacrifice immunogenicity. So the historical endpoint of 0.5 has been used the FDA has said we want to see something a little bit more stringent because we've already seen some of this immunologic creep. Now you know they asked us to accept that we looked at our phase 2 data we felt that you know we have very strong immunogenicities so we were okay with moving forward and obviously you can see what the results look like. So essentially, we met their standard. We don't see the immunologic creep that others have seen. And in fact, like I said, some have been even higher statistically than previously. You know, I would just add to what Jim said. I mean, I think the combination of the improvement overall in immune responses with this new standard, to your question, Seamus, will make it only that much more difficult for future potential broader available vaccines to meet the required hurdles for approval great and you know maybe just to before we get into more of the specifics around you know moving through the BLA can you just remind us you know how much incremental coverage is being achieved with 31 whether it be versus preven our 20 or kept active but also you know what What are we learning along the way commercially that could be a limitation relative to missing kind of seven of the key serotypes? Well, I'll let you cover the commercial, but, you know, in terms of incremental coverage, it's roughly 30 to 35 percent incremental over PCV20. We have about 95 percent overall against invasive disease, so, you we cover the majority, and it's about 15% or so above capvaxib. And, you know, to talk about what you asked, Seamus, a few years ago, I think when Merck started their development program, they were, of course, limited by their technology to 20 or 21 serotypes. And so what they did, which I think was really seen by the field as positive, was they said, OK, the serotypes that are covered in PCV13 are going to be covered. Therefore, we can remove some of those from our vaccine and look at serotypes that are more relevant to adults today and in the future. And so they focused on 21 serotypes, but it's not just one incremental serotype versus PCV20. In fact, it's many more different. So what happened is when I think PCV21 came to market and launched, you saw a really strong uptake of market share. Basically 0 to 45 or so percent in the first 12 to 18 months, which was, I think, a really strong launch for Capvaxiv. But they had one Achilles heel, actually two, which is serotype four and serotype 19F. And those were not included in Capvaxxiv. And unfortunately, in the United States, serotype 4 and serotypes 19F are rebounding, and in many cases significant. And so that's been a real gap in their coverage. And so while they have a higher percent of coverage, they are missing key serotypes in the vaccine. And so this has created a really difficult trade-off for health care providers who have to make a decision of two products that provide really different protection offerings to their patients. And so I think as we head into our commercialization, we hope the Vax31 can make that a very simple story for providers covering the serotypes that are relevant for both vaccines in one Vax 31. Perfect. So, you know, Jim, help us walk through what remains in terms of the components of the BLA that need to be satisfied from here. So in order to get approval, we have three main clinical studies that are ongoing or just reported out. One is the Opus 1. We also have Opus 2 and Opus 3 that will be reported out in early next year. The first half. first half. Thank you. The Opus 2 is concomitant use with flu. A lot of times the pneumococcal vaccine is given in the retail space together with flu, so we want to show that there's not a level of interference that would be prohibitive from giving those two together. The Opis 3 is looking at people who have been previously vaccinated with other vaccines. There's a huge benefit, obviously, of going from the coverage and adding an incremental 30-35%, So we want to show that those that have gotten the 13, 15, Pneumovax, the 20, and even the 21 can be revaccinated. After that, we are required to do what's called a manufacturing consistency study. That's where at commercial scale for a biologic, FDA requires you to show that you can have consistency of immunogenicity in multiple batches. So that will be initiated in 2027. And that plus, obviously, a few of the CMC remaining activities will be done by then. Okay, great. And not to say that it was a delay or a pushout, but what was the tradeoff to kind of drop or to have the BLA be first half of 2028? Was that just sort of learnings kind of building up the capacity, or is it actually making sure that you have full commercial capacity to launch? Yeah, it's less a function of our commercial readiness as it relates to kind of our sales and marketing activities or inventory levels, more a functionof the pretty substantial volume of work that needs to be completed to enable that submission. So not only the Opus 1 study, the Opis 2, 3 studies, as Jim said, first up next year, the manufacturing consistency study, and the blocking and tackling across all aspects here. It was the first time we'd issued BLA guidance, but there's a substantial amount of work and feel comfortable that that's the right timeline to enable us to deliver all the requirements and what will be a pretty substantial submission to the FDA. Right. There's a huge number of, I guess the way that Jim has described it is it's like 31 vaccines all in one. That's how the FDA looks at it. You've got to manufacture 31 and then times three to show consistency of manufacture of drugs, sized, activated drug substances, three ECRIMs and three DPs all together and demonstrate that you can do that consistently from, you know, in process and release testing. And then you put it in the clinic, do that test. Now, we're very comfortable with where we're at because we've produced a lot of batches. As Andrew said, we've been building inventory already preparing for launch, so we have a lot of this data already. It's just a matter of completing that and running the study and getting it all in a package and submitted. And Mike, talk about the U.S. market as it stands today and then how you see 31 kind of evolving into that market. Yeah, so the U.S. adult market today, as was mentioned by Andrew, is around $3 billion U.N. You know, really the major driver over the last few years has been this lower age recommendation down to 50 to 64 years of age, so now essentially a 50-plus recommendation. And, you know, that market we continue to see growth in. We will, when we come to market, we'll be thinking about a few different categories of the recommendation, whether that be revaccination of people who have received a lesser valent vaccine, which is consistent with previous PCB recommendations, potential booster doses or other high risk high risk groups. So we will be looking at all of those opportunities for growth in the US. But those recommendations are sort of set. The market is established in the ex-US markets. We see also a lot of growth. These are new markets that have come online over the last 24 months or so. or so. Most major markets are already online or have some sort of adult program, but those programs can continue to grow to be more consistent with the U.S. recommendation. So, for example, there may be a few countries today that are only 65 plus, or in some countries actually only 65 year olds, and then over time they'll expand as their budgets increase and as their populations have opportunity for immunization. So you know, I think if you were to ask us a few years ago, or even a year or two ago, the adult to pediatric market ratio is adult is about a third and pediatrics is two thirds. We see that opportunity going closer to 50-50, really with the growth of the market, as Andrew talked about earlier, being substantially driven by the adult market, whereas the pediatric market is essentially flat. It's widely accepted and adopted. the immunization rates will remain fairly constant, and you may have some price movement. But other than that, the volume is really driven by adults. Got it. Great. You know, let's dive into the infant program a little bit. You know obviously just remind us the design, the program's fully enrolled, you know, but what are the key factors that will be focused on in the updates? updates, and you've got kind of, you know, I wouldn't say two potential data reveals, but there are two critical endpoints that investors are focused on. Maybe I'll just go through the study design a little bit. This is pretty standard. We're giving a vaccine to infants at two, four, and six months of age, and then we do a serology assessment at seven months ofage. We then give them a boost between 12 and 15 months, and one month later take another serology. So there are two serology endpoints, as you alluded to. In our study, we're doing four doses. We're doing a low, a mid, a high dose. The high dose is the same dose that we took forward for the Opus 1 study. And then based upon the results we saw in the 24 study, we added an additional arm that's even higher than the high, which has the majority at 4.4 micrograms. And so the first readout will be a threshold assessment, percent who achieve an antibody above 0.35 micrograms per ml, and that will be compared to PCV20. And then the second one will be a non-inferiority similar to what we saw in adults with 0.667 most likely. We haven't had our discussion with the FDA yet, but given that Pfizer has announced that they're using 0.667, that would be our expectation as well. Okay. In terms of timing then, you know, I think as you alluded to, Seamus, we continue to maintain this optionality as to the ultimate unblinding strategy and it's the unblinding strategy that will dictate the disclosure strategy what we have said is we will either unblind both data sets concurrently and announce them concurrently or we may choose to unblind the primary series data set first in which case we'd announce that first followed later by the booster data set we have been very clear that we continue to lean toward the concurrent unblending and disclosure strategy we've said in either case we would have have the full data set by the end of the first half of next year and and on the trial design you know we obviously we conducted our first-ever infant dose ranging study with our 24 valent program and based on the observations from that study as well as adult we have these two dose arms now being explored in this facts 31 study that are higher than any of those explored in the 24 valence study so the learnings give us the kind of the confidence we have that will see improvement in immune responses based on dose response we saw in the prior studies that led to the design of this study, which was modified in its interim, as Jim said, this additional dosing arm. Got it. And, you know, just in terms of the choice to test this higher dose, you Know, what was the sort of governing factor to explore the higher dose, the evidence that there's a dose response, you Now, from your perspective? Yeah, so a lot of that came from our results of our 24 study in infants, 24 valent study. We had a low, middle, and then what we had was a mixed dose. Well, the mixed dose had seven serotypes that were dosed at a low mid and then high, in this case at 4.4 micrograms, where the remaining serotypes were doused at 2.2. What we saw was there was a clear dose-dependent response for those seven serotypes that were dosed that low, mid, and high. So we saw an improvement for six out of the seven serotype of more than 10%, we'll say about 15, 20% improvement, going from 2.2 to 4.4. Subsequently, we didn't see for the ones that stayed at 2.22, substantial interference, or this carrier suppression that others have seen. So we felt that we could increase the dose, not see interference, but rather see an improvement in the immune response. And so what we did was at that time, we decided to add that to the ongoing 31 study. We posited very briefly, added the additional study, and re-randomized it for the optimized dose. Got it. Okay, great. And then just in terms of how we should think about the relative, when the data come out, how would you have us or encourage us to think about that data? We have some data that was revealed recently from Pfizer, the way that they kind of communicated non-inferiority, you know, was, you know, including the powering up to phase three. So how should we think about the data reveal and, you know, while you may not be guiding to a specific number of serotypes yet, how should we just be thinking about what a, you know, a robust vaccine looks like? Well, I mean, personally, I think that if we can repeat what we saw with the 24 valent in the 31, we have a robust vaccine. We're going to be adding 11 serotypes. That's going to be a substantial increase in the coverage relative to PCV20, and even more so from an otitis media perspective. So you have that benefit. We saw really robust responses against circulating serotypes, so we did well with the ones that were circulating, and we believe that with this dose-dependent response that we saw in the 24 by increasing the dose, if we can even improve slightly some of the ones that were lower responders, it'll give us a really good, strong position moving forward into phase three. Yeah, I think we'll, to your point, Seamus, obviously this phase two study is more limited in size than the future phase three study will be. So our focus will as much be on the point estimates or mean responses than the lower bound because just the error bars will be wider in the study but that will help inform us in terms of setting expectations for a future phase three study but as Jim said you know we we missed on a handful in the 24 valence study and in the context of a much broader coverage 31 valence study that result we think would represent an approvable profile and it continues to be and Pfizer has mentioned the same and over the last couple weeks really about the totality of evidence, the totale of the data that the FDA assesses. Certainly these non-inferiority thresholds are one component, but there are multiple data sets that they'll ultimately evaluate. And what's key in terms of just the vaccine not just being approvable, but commercially very effective? Are there points of differentiation that kind of drive you to real commercial efficacy? I think we certainly are always interested in sort of makes and misses and how we evaluate PCB products. But the reality is in the market, once those are approved by the FDA and you have a serotype in the label, that's really how providers look at this. And when I say providers, I mean healthcare providers, the retailers who are delivering the vaccines or large health institutions. So we take a lot of energy talking about serotype makes and this is, but the reality is on the ground, once it's in the label, that becomes your, you know, competitive position versus a peer. And what we've seen historically in this PCV market, I mean, really for a decade in moving from 7 to 13 to 15 to 20 to 21, is this constant preference to breadth of coverage. And that's because what is happening right now with serotype 4 happens. And you want the broadest protection available, whether that's an adult population or a pediatric population. So we think we're very well positioned. And obviously, we're talking in the context of a pediatric product. If we have a pediatric product with 31 valence, we find ourselves in a really good position competitively. Great. We only have a minute left. This is always painful. Jim, 40 seconds on GAS. Why are you so excited about it? So I think group A strep is one of the most underappreciated diseases. It causes over 600,000 deaths. Almost one in five antibiotics in younger age groups in the U.S. are given for group A strep or presumed group A Strep, leading to antimicrobial resistance. And there's severe increases in invasive disease in adults, too, that are occurring. So I Think we've got a really great candidate. It has multiple virulence factors. It goes after an exotoxin. It goes after something that interferes with complement as well as the standard polysaccharide conjugate and an adhesion protein. So I really am looking forward to being able to see how this progresses. We just, as I said, announced that we're moving to stage two portion of that phase one study. So look forward to sharing the results of that second half of next year. Again, primarily safety and tolerability. But the goal is to see a data set that can help us move into exploring this in children in the phase two. So not just, you know, sort of in just 31 vaccines and one product, you now are advancing the platform of the assets. And we've said this, we think that the group-based drug opportunity is a blockbuster opportunity. Again, it has similar hallmarks to PCVs. The rates of disease are not inconsistent. You've got both adult and younger age populations. A huge need. There was a study done some years ago, $6 billion in direct medical costs in the United States alone. That number is likely only growing given what's happening with the disease. Very different. In this, you know, we would need to run a full field efficacy study, but given the attack rates in school-age children, you can conduct these studies at incredibly reasonable size. Yeah, great. Well, unfortunately, we are out of time, but never really is enough. But thanks again for joining us this year. Great to have the team back with us and, you know, look forward to many successes in the months ahead and a BLA for the vaccine that I'm actually waiting for. Thank you, Seamus. Appreciate it. Thanks, everyone.