CureVac N.V. (NASDAQ:CVAC) Q3 2022 Earnings Call Transcript

CureVac N.V. (NASDAQ:CVAC) Q3 2022 Earnings Call Transcript November 16, 2022

CureVac N.V. beats earnings expectations. Reported EPS is $-0.25, expectations were $-0.27.

Operator: Greetings, and welcome to CureVac Third Quarter and First Nine Months 2022 Financial Results and Business Update. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. . As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sarah Fakih, Vice President Corporate Communications and Investor Relations. Thank you. You may begin.

Sarah Fakih: Thank you. Good morning, good afternoon and welcome to our conference call. My name is Sarah Fakih, and I’m the Vice President of Corporate Communications and Investor Relations at CureVac. Please let me introduce today’s speakers. On the call with me from CureVac are Franz-Werner Haas, the Chief Executive Officer; Ulrike Gnad-Vogt, our Interim Chief Development Officer; Ronald Plasterk, our Senior Vice President Science & Innovation; and Pierre Kemula, Chief Financial Officer of CureVac. Please note that this call is being webcast live and will be archived on the Events & Presentations section under Investor Relations on our Web site. Before we begin, a few forward-looking statements. The discussions and responses to your questions on this call reflect management’s view as of today, Wednesday, November 16, 2022.

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We will be making statements and providing responses to your questions that state our intentions, beliefs, expectations or predictions of the future. These constitute forward-looking statements for the purpose of the Safe Harbor provisions. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected. CureVac disclaims any intention or obligation to revise any forward-looking statements. For more information, please refer to our filings with the U.S. Securities and Exchange Commission. I will now turn the call over to Franz.

Franz-Werner Haas: Thank you, Sarah. Ladies and gentlemen, a warm welcome to this conference call from us here at CureVac. 2022 has been a highly productive year for our company. We have significantly grown our operational bandwidth across the organization and most importantly our three core competencies; pro technology platform, robust product development pipeline and large GMP manufacturing capacities. Let me give you a short overview of four key developments in these areas. First, in our prophylactic vaccine product pipeline, we continue to execute on our broad clinical development programs in COVID-19 and flu, which started earlier in 2022 in collaboration with our partner GSK. The ongoing four clinical trials that have successfully extended our broad technology platform into modified as well as multivalent mRNA approaches are on track to deliver meaningful clinical data early next year.

Second, beyond our progress in prophylactic vaccines, the next growth driver we are moving forward with maximum speed and focus is oncology. With the acquisition of Frame Cancer Therapeutics and partnership with myNEO, we have made an impressive start to the implementation of our expanded oncology strategy. Today, there is an enormous gap between state-of-the-art analytical methods that provide vast amounts of data about the patient’s individual cancer and current treatment options. Immuno-oncology is particularly suited to bridge that gap. We intend to access and translate available data into a meaningful pipeline of new mRNA cancer vaccine candidates driven out of the former Frame Cancer Therapeutics site in Amsterdam, which we plan to make our cancer antigen discovery hub.

Third, we progressed on the development of dedicated oncology enablers, first and foremost, The RNA Printer, our automated manufacturing solution for GMP-grade mRNA vaccines and therapeutics. In October this year, we submitted applications to the regulatory authorities for the first manufacturing licenses to support our oncology roadmap. Furthermore, we are advancing the development of a proprietary lipid nanoparticle, or LNP technology, that in oncology we expect to provide additional advantages for the delivery of novel mRNA cancer vaccine candidates. Fourth, we also presented data from the Phase 1 expansion study of our non-coding RNA CV8102 at the meeting of the Society for Immunotherapy of Cancer, SITC, earlier this month. CV8102 demonstrated the solid safety profile and preliminary efficacy in heavily pretreated patients with advanced melanoma.

In addition to those four developments, we closed the third quarter of 2022 with a solid cash position of €540.9 million. And Pierre will later talk you through the financial details. On Slide 5, let me briefly highlight the CureVac pipeline to show you how we are leveraging our strong mRNA expertise across our three therapeutic areas of prophylactic vaccines, oncology and molecular therapy, addressing diseases with high unmet medical need. Our most advanced area, prophylactic vaccines, is driven by the technological advances of our versatile second-generation mRNA backbone. This backbone broadly spends unmodified and modified mRNA as well as monovalent and multivalent vaccine formats to diversify and advance our product development pipeline.

All these approaches are currently being validated in four Phase 1 clinical trials in COVID-19 and flu that we are conducting together with GSK. The clinical insights we expect to gain from these four studies will also accelerate the ongoing expansion of our oncology program. In this area, our strategic priority is the development of a portfolio of novel cancer vaccine candidates that can elicit strong systemic and tumor directed immune responses based on our second-generation backbone. Through the implementation of synergistic technologies, we established a high efficient antigen discovery engine. This will allow us to develop product candidates featuring differentiated new antigens as well as tumor associated antigens. As already highlighted, our clinical oncology candidates CV8102 is currently being assessed in a Phase 1 dose escalation trial in solid tumors and an expansion study in patients with PD-1 refractory melanoma.

Ulrike will come back to the data we presented on CV8102 at SITC. In the third therapeutic area, molecular therapy, we are developing optimized mRNA therapeutics together with several collaboration partners that are intended to address therapeutic proteins to treat rare and metabolic diseases. On Slide 6, let me briefly touch on a detailed overview of the four key Phase 1 dose escalation trials that we are currently conducting in COVID-19 and flu together with GSK. The studies are driven by a broad technology approach to select the best performing candidates for later stage clinical development. For COVID-19, on the left, the tested candidate includes CV0501, a modified candidate encoding the Omicron variant and CV2CoV, an unmodified candidate encoding the original virus.

For flu, on the right, we are testing FLU SV mRNA, a monovalent modified candidate and CVSQIV, an unmodified quadrivalent candidate. All four candidates are being tested in a one shot booster setup. Based on our advanced second-generation backbone, they will provide an important clinical validation of our technology platform and corresponding product development. Initial external reporting for both indications will be triggered by data that are comprehensive and meaningfully enough to allow selection of the most promising candidate and determine the optimal dose for a subsequent clinical trial. We expect to report on this data in early 2023. Moving on from prophylactic vaccines to oncology, I will now hand over to Ulrike to walk you through our recent updates and progress in this area.

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Ulrike Gnad-Vogt: Thank you, Franz. Before we dive into the details, I would like to briefly draw your attention to our previously reported three-pillar strategy in oncology. These pillars illustrate the roadmap for expanding our oncology footprint, the next growth driver we are rapidly advancing beyond our progress in prophylactic vaccines. Over the last several months, we have either started or continued to execute on each of these strategic pillars with a clear focus on the development of a differentiated cancer vaccine pipeline. The technologies of Frame Cancer Therapeutics and myNEO will enable us to assess novel classes of tumor antigens and identify those with the highest chance of success for potential clinical testing in alignment with the pillars in the middle and on the right.

This antigen discovery engine will be supported by The RNA Printer. The automated end-to-end manufacturing solution is expected to contribute to the availability of clinical trial material to rapidly screen new mRNA vaccine constructs in early stage clinical studies. As already mentioned by Franz, we are currently in regulatory review to obtain the first manufacturing licenses for The RNA Printer to support the initial validation of our second-generation backbone in oncology. This validation includes testing our second-generation backbone with different classes of tumor antigens to assess T cell-mediated immune responses and discovery by the strategic pillar on the left. I will come back to this strategic pillar later in the presentation. First, let us take a closer look at the antigen discovery technologies we are currently establishing and how they integrate with our three core competencies in oncology.

On Slide 8, you can see an illustration of how the advanced technology and bioinformatics expertise of Frame Cancer Therapeutics and myNEO complement our core competencies in product development and manufacturing. The synergistic technologies strongly extend our reach to the latest technologies in oncology while being highly compatible with our own mRNA technology. They provide a powerful frontend to deliver antigens that can then be developed into a deep pipeline of novel cancer vaccine candidates along our existing expertise. Let me now hand over the call to Ronald, the Founder of Frame Cancer Therapeutics, to walk you through the details of Frame’s highly sophisticated and differentiated technology.

Ronald Plasterk: Thank you, Ulrike. The technology which has become part of the CureVac technology platform with the acquisition earlier this year is dedicated to transforming the treatment of cancer by harnessing the immune system to recognize and fight tumors. Over the next three slides, I would like to give you an overview of this technology and what sets it apart from current industry standards. The field of immunotherapy has advanced with the progression of available technologies to extract data from patient samples such as next generation sequencing. In the last 10 years, the focus was on the exome, which is all the protein coding parts of the human genome. But this represents only 1.5% of the total genetic information.

Within that 1.5%, platforms have been specialized on the efficient identification of point mutations that give rise to antigens that can mostly or only be found in tumor cells and can serve indeed as targets for cancer vaccine candidates. More recently, breakthrough developments in sequencing capacity has enabled the extraction of vastly larger amounts of data. Today, we can sequence the entire genome of every patient and the tumor for about $3,000, and prices are still going down. It enables us to utilize the remaining 98.5% of genetic information where the bulk of the antigenicity of the tumor resides. This is where we start our new antigen discovery engine. We perform whole genome sequencing for every patient sample and combine it with short as well as long-read RNA sequencing.

This way, we can map the full inventory of genomic changes and know precisely what is being expressed and what is not. Downstream of the sequencing, we generated a powerful software package to integrate all the data to retrieve the exact changes in the DNA of the tumor cells compared to healthy cells, and correlation of this data with changes in the RNA transcription of the tumor cells results in entirely new and potentially antigenic tumor antigens. We’ve called these new antigens frames, which is short for neo open reading frame proteins. We plan to apply these frames as targets for our portfolio of entirely new cancer vaccine candidates. We’ve demonstrated we can go from tumor sample to vaccine design within two weeks. I’m now on Slide 10 to further illustrate the depth of the genetic data that our approach provides access to.

Here you can see the analysis of a real sample of a lung cancer patient from our own work. The outer circles of both figures number the 22 chromosomes plus the X and Y chromosomes. The inner circles of both figures show mutations per chromosome depicted as blue dots. Each blue dot represents a potential cancer vaccine target. The left figure illustrates the data we obtained if we choose to do only conventional exome sequencing. The number of blue dots is restricted by sequencing only the protein coding parts of the tumor DNA. The figure in the middle illustrates the data we obtained from whole genome sequencing. Here, of course, you get many more point mutants, but more importantly you gain much more meaningful data on top of that. The case in point is the multitude of lines in the middle of the figure, which depict chromosomal rearrangements where chromosomes are tied to other chromosomes where they should not be.

While this is a common occurrence in cancer, the number of rearrangements is still staggering. Overall, there can be hundreds of such rearrangements in a common lung cancer sample. What does this difference between both datasets mean for the development of potent cancer vaccines? Well, the main difference is that point mutations, as the name implies, represent single nucleotide changes in the encoding DNA, and consequently the expressed protein only features single new amino acids. Current personalized cancer vaccines applying this approach cover at max around 30 of such point mutation, so about 30 changed amino acids in the vaccine. This means that the vaccine is for the most part based on healthy or regular or wild-type genetic content. The ability to activate the immune system based on a vaccination against the mostly wild-type derived antigen is then of course limited.

In contrast, we are taking a very different approach, incorporating the totality of the genetic changes, including all the rearrangements give rise to long stretches of genetic content that are entirely foreign to the body. This results in new antigens that are not only entirely foreign to the body, but also uniquely expressed in a tumor and not in healthy tissue. Recall the entirety of these frames, the Framome. You can see the Framome of the lung cancer sample on the right. Every line here represents an encoded new protein with every color in that line showing a separate amino acid. The colors does add up to approximately here about 1,000 new amino acids in this sample. And that’s a number that can easily be encoded on a small number of or even a single messenger RNA construct.

In its foreignness, this construct will look like a virus to the immune system and is expected, as also suggested by preclinical experiments, to raise a much stronger immune response. At the end of the day, the fight between the tumor and the immune system is a numbers game. And we believe that our approach provides the best opportunity to win that game. Having focused so far on the strongly extended data that we can obtain today from individual patient tumor samples, let me now show you on Slide 11 how we can leverage our approach across different branches with the same cancer or even across different cancer types. What you can see here are the frames of two different lung cancer patients. We found that some of — the same frames are shared between patients.

In fact, shared frames as well as shared tumor associated antigens occur in many different cancer types. And they offer us the potential to develop cancer vaccine candidates that could be applicable to a larger group of patients. That’s why we are following two approaches for our cancer vaccine development. The first approach assesses tumor antigens shared by different cancer patients for the development of off-the-shelf cancer vaccines to benefit larger groups of patients. And the second approach is tailored to a patient’s individual tumor profile. With that, let me hand back the call to Ulrike to discuss how these approaches fit within our current oncology roadmap. Ulrike?

Ulrike Gnad-Vogt: Thank you, Ronald. I am now on Slide 12 to walk you through our development plans in oncology for 2023 and beyond, and how we plan to translate our mRNA technology into new cancer vaccine candidates. You might remember that the first of our three strategic pillars highlights the validation of a second-generation backbone in oncology. To address this pillar, we will assess how the improved performance of the second-generation backbone translates into the induction of T cells in a clinical setting. To this end, we have already started preparations to initiate two Phase 1 proof of principle studies in the first and second half of ’23 to assess safety and immunogenicity of the second-generation backbone, including established tumor antigens.

The first proof of principle study expected to start in the first half of ’23 will assess an mRNA construct encoding multiple epitopes from a tumor associated antigens in patients with surgically resected glioblastoma multiforme. The second proof of principle study expected to start in the second half of ’23, which has an mRNA construct featuring a full length tumor associated antigen in patients with solid tumors with an initial focus on melanoma. They are expected to provide a solid foundation of clinical data to accelerate the development of cancer vaccine candidates and to support subsequent regulatory review processes. In parallel, we will be advancing the application of our antigen discovery engine to identify and validate new antigens as well as tumor associated antigens for potential clinical testing.

This work stream will benefit from the additional support of what we call oncology enablers. These include primarily The RNA Printer, which will support the rapid and flexible availability of clinical trial materials. Additionally, we aim to optimize the design of cancer vaccine candidates based on new and proprietary LNP program for improved mRNA delivery. Both work streams are expected to merge in 2024 based on data from the proof of principle studies and successful antigen selection in order to start cancer vaccine development programs. Programs will encompass the two approaches Ronald has highlighted; development of off-the-shelf cancer vaccines to benefit groups of patients and cancer vaccines tailored to a patient’s individual tumor profile.

Let me go more into detail about these two approaches on the next slide. Looking at the concept of shared antigens introduced earlier in this presentation, data suggests that an off-the-shelf vaccine addressing, for example, the four most frequently shared tumor associated antigens for breast cancer can address about a quarter or even a third of all triple negative breast cancer patients. Due to the prevalence of these shared antigens, chances are high that out of these four shared antigens at least two will turn out to match a patient’s specific tumor. With our access to tumor associated antigens, frames and other classes of antigens from our antigen discovery engine as well as our collaboration with myNEO, we will evaluate possibilities to further increase the coverage of specific patient populations with relevant off-the-shelf cancer vaccine candidate.

Our second approach is a fully personalized approach, which has the advantage of precisely tailoring a cancer vaccine to the antigens that are specific to a patient’s individual tumor and are not shared with other patients. Ultimately, it will depend on the tumor and whether it can be best addressed by an off-the-shelf or personalized or combined approach. With that, let me now shift gears and talk about the latest data update for our oncology program, CV8102. On Slide 14, let me briefly remind you that CV8102 is a non-coding RNA optimized to activate RNA receptors that normally detect viruses, including toll-like receptor 7 and 8 as well as RIG-1. CV8102 is injected directly into the tumor where it mimics a viral infection that can activate the immune system to reject the tumor.

CV8102 is currently being evaluated in a Phase 1 study consisting of two parts that assesses CV8102 as a single agent and in combination with anti-PD-1 antibodies. A dose escalation path in a range of solid tumors has already been completed. The data on responders illustrated on the slide comes from the expansion part of the study, which assesses 40 heavily pretreated patients with PD-1 refractory melanoma at a dose of 600 micrograms. The data represents a cutoff date from August this year and show preliminary efficacy in the cohort of 30 patients treated in combination with anti-PD-1 antibodies. 40% of these patients were pretreated with anti-CTLA-4 antibodies. Five of these 30 patients or 17% experienced the partial response according to research.

The observed responses were durable for up to one year from the start of treatment. We did not observe objective responses in the 10 patients of the single agent cohort. In this group, 50% of patients were pretreated with anti-CTLA-4 antibodies. Additional immune profiling data from the Phase 1 expansion study is shown on Slide 15 and is based on tumor biopsies of injected and non-injected tumors from a subset of patients as well as blood samples from all patients. The tumor biopsy sample shown on the left further confirms the previously reported infiltration of T cells in the tumor environment characterized by both CD4 and CD8 T cells and a corresponding decrease of the tumor cell content in one of the partial responders in the combination cohort.

On the right side of the slide, a balloon plot illustrates a gene set enrichment analysis safe on RNA sequencing from more blood samples taken before and 24 hours after the first administration of CV8102. The analysis confirms the previously reported activation of defense pathways led by the induction of interference. Final data of the complete Phase 1 study is expected to be submitted for publication in a peer-reviewed journal in the first half of ’23. Overall, the positive data of the CV8102 Phase 1 expansion study further demonstrates the previously reported robust safety profile and strong ability to mobilize immune system against injected as well as non-injected tumor. In the context of our strategic focus on the development of mRNA based cancer vaccine candidates that target tumor specific antigens, the clinically validated immuno-modulatory characteristics of CV8102 represents a valuable and potentially complementary technology.

We would therefore only consider a potential further clinical development of CV8102 based on an integration into our cancer vaccine development, for example, as a strong immuno-modulatory adjunct to a defined mRNA cancer vaccine candidate. With this, let me hand back the call to Franz.

Franz-Werner Haas: Thank you, Ulrike. To round up the components of our oncology roadmap on Slide 16 and 17, let me briefly address the two oncology enablers that Ulrike already highlighted on Slide 12, the first being a new and proprietary lipid nanoparticle, or LNP program, for potential application with our cancer vaccine candidates. The new LNP consists of an improved and PEG free lipid composition. Preclinical experiments in mice showed highly localized transcription of a rabies-based mRNA formulated with either the new non-PEG LNP or a control LNP. Biodistribution was limited to the immune compartment and the intramuscular injection site. It showed no expression in distant organs such as the liver, spleen and lung. As treatment with a therapeutic cancer vaccine requires repetitive administration, maximizing expression of the encoding antigen in the immune compartment is an important goal.

We know from public studies that there seems to be a linear correlation between the amount of the activated antigen presenting cell in the immune compartment and the resulting abundance of tumor fighting CD8 T cells. Correspondingly, the highly localized mRNA delivery was accompanied by strong cellular but also humoral immune responses. As shown on the right side of the slide, the rabies mRNA formulated with the non-PEG LNP generated systemic interferon alpha levels in the same range as the control LNP and was shown to raise comparable amounts of antigen specific T cells measured via interferon gamma ELISpot assay. An important advantage of the new LNP program addresses the cold chain logistics that still pose challenges for the distribution and long-term storage of mRNA based vaccine.

The new LNP program was shown to enable a so-called dried presentation of a formulated mRNA referring to the vaccine as a solid powder rather than a solution for better stability and storability. The figures on Slide 17 show data from an ongoing stability study at 25 degrees centigrade or 77 degrees Fahrenheit, demonstrating that the mRNA is intact and securely formulated for at least 11 weeks. Overall, we are extending our technology core competencies in LNP research to add new approaches for vaccine design optimization. Moving on to the second oncology enabler on Slide 18, I would like to look at the role The RNA Printer is envisaged to play not only in the internal expansion of our oncology pipeline, but also in the opening of new avenues for personalized mRNA based cancer therapies.

As you know, The RNA Printer is our integrated and automated solution for the rapid manufacturing of GMP-grade mRNA vaccines and therapeutics. Designed for flexible smaller scale quantities, The RNA Printer seamlessly integrates with our antigen discovery technologies and the development of our cancer vaccine pipeline. At the same time, The RNA Printer is expected to be uniquely suited to close the gap between the vaccine sequence and the provision of new cancer vaccines to either treat smaller group of patients or provide a fully personalized therapeutic setup. This integration of The RNA Printer could also catalyze possible end-to-end digitization of data and data management along the entire personalized or off-the-shelf vaccine therapy workflow.

With this, let me hand over to you, Pierre, for a review of our financial data.

Pierre Kemula: Thank you, Franz, and good morning and good afternoon to everyone on the call. Looking at our current cash position on Slide 19, we closed the third quarter and the first nine months of 2022 with a strong cash position of €540.9 million. Financial statements for the first nine months of the year reflect CureVac’s advanced phase of transition out of its exposure to its first generation candidate CVnCoV. Cash used in operations was mainly allocated to purchases of R&D material and settling CMO contracts as part of the wind-down activities for CVnCoV vaccine program and to capital expenditures for a new production facility. Moving on to our profit and loss statement, revenues decreased by €18.1 million to €11.2 million for the third quarter of 2022 and decreased by €6.1 million to €55.7 million for the first nine months of 2022 compared to the same period in 2021.

The decrease for the first nine-month period was based on the highest 2021 revenues due to the termination of the Boehringer Ingelheim collaboration and its subsequent recognition of €10 million for the first nine-month ending September 2021. Revenues for our two GSK collaboration increased year-on-year and amounted to a total of €52.7 million for the first nine months of 2022 compared to €49.6 million the previous year. Operating loss was €52.4 million for the third quarter of 2022, representing a €90.7 million decrease compared to the third quarter of 2021. For the first nine months ended September 30, 2022, operating loss decreased by €278.8 million to a total of €127.9 million year-over-year. The operating result was affected by several key drivers.

Cost of sale decreased primarily due to lower expenses for CMO services. Prior year end 2021 was highly impacted by significant expenses for the setup of the European CMO network for CVnCoV. This was partially offset in 2022 by an increase in write off for raw materials procured to supply manufactured goods to GSK. These are now no longer expected to be used following the transfer to GSK of reserves production capacity at the CMO. R&D expenses decreased primarily due to significantly lower development expenses related to the completion of the large Phase 2b/3 clinical trial for CVnCoV. In line with the declining number of continuing study participants in 2022 and renegotiation of existing contracts in the first nine months of 2022, our remaining clinical trial cost estimate decreased resulting in the reversal of €36.8 million from the provision recorded as of December 31, 2021.

Additionally, in the first quarter of 2022, R&D cost was positively impacted by a net gain for a change in volume estimate following the transfer to GSK of reserve production capacity at the CMO. Other income decreased but was positively impacted by €32.5 million from GSK for reimbursement of prepayment and production activity setup at the CMO. In 2021, other income was primarily attributable to amounts recognized from grants from the German Federal Ministry of Education and Research, or BMBF. Financial results for the third quarter increased by €5.1 million to €4.7 million for the third quarter of 2022 and by €8.7 million to €7.5 million for the first nine months of 2022 compared to the same period in 2021. These positive financial results were driven by foreign exchange gains and interest on cash investments.

Pre-tax losses were €47.7 million in the third quarter and €120.4 million for the first nine months of 2022. With this, I would like to hand back to Franz for today’s key takeaway.

Franz-Werner Haas: Thank you, Pierre, and also thank you, Ulrike and Ronald. Let me quickly summarize the key takeaways from today’s presentation. Over the past several months, we continued to strongly increase our operational capabilities that enabled us to maximize applications for our mRNA technology across the three core competencies, including technology, product development and manufacturing. We have expanded our clinical development pipeline by a total of four clinical trials in prophylactic vaccines this year in COVID-19 and influenza together with GSK. All four trials are on track and provide meaningful data with a goal to select the best performing candidates early next year, and advance preparations for potential subsequent later stage clinical developments in 2023.

This data will also support development of our oncology program where we have significantly expanded our technology expertise by the acquisition of Frame Cancer Therapeutics and its cutting edge genomics and bioinformatics platform. In 2023, we plan to start two clinical trials in oncology to integrate this highly differentiated platform with our versatile second-generation mRNA backbone to strengthen our clinical development pipeline with novel cancer vaccine candidates supported by The RNA Printer and our new LNP technology. Lastly, our strong cash balance in the third quarter shows the benefit from our diligent work to resolve and reallocate prior commitments from our first generation vaccine candidate and positions us well to continue the execution on our priorities.

With this, we conclude our presentation. And I would now like to open the webcast for your questions.

Q&A Session

Operator: Thank you. We will now conduct a question-and-answer session. . Our first question comes from Geoff Meacham with Bank of America. Please proceed.

Geoff Meacham: Hi. Thanks for taking my question. I’m just curious when we should be looking for a next update on your rabies program. And can you also walk us through how you’re thinking about that market opportunity there? Thank you.

Franz-Werner Haas: Thank you, Geoff. With regard to the rabies, certainly our core efforts were together with our partner GSK looking into first of all making a difference to the pandemic which is not over yet. Therefore, the efforts certainly concentrated on the COVID as well as on the flu clinical trials. Certainly, the readout on these clinical trials will tell you something about the technology platform in infectious disease, which is why I cannot answer your question with regard to rabies at the moment. So we are waiting for the data to come because this will be telling us more for other indications and then certainly for the markets in these indications as well.

Operator: Our next question comes from Evan Wang with Guggenheim. Please proceed.

Evan Wang: Great. Thanks for taking my question. Great to see the clinical data for the COVID and flu programs on track for 1Q. Can you remind us how you plan to present it? Should we expect it in a press release or at a medical meeting? Are they planned to be presented together? And in terms of the go, no go just in between the modified and unmodified, how exactly will that decision be made? Any color there would be helpful.

Franz-Werner Haas: Thank you, Evan. It is a bit too early now to say how we are going to present on this data. First, we want to see the data, the readout. But you can be assured that this is the core of the discussion we’re having at the moment with GSK together in order to find exactly where your finger pointing on, what is the difference between modification, non-modified RNA constructs in two sense. One is really what is the first-generation backbone versus the second-generation backbone, whereas the second-generation backbone just on the RNA level have a higher potency. As you know, the first-generation CVnCoV was non-modified to see really what you can do on the RNA level, but then together with the chemical modification, which certainly plays a role for the reactogenicity, especially if you’re going multivalent with higher dosages, because you’re putting more RNA into that.

So these are the critical questions and you really put your finger exactly on these points, which we are only able to answer when we see the data, which certainly we have high expectations of according to the improvements we have been doing so far. And this will certainly then trigger also how we are going to present with our partner GSK on our mutual projects we are running here. Therefore, unfortunately, it’s a bit too early to talk about exactly this.

Evan Wang: As a follow up, what kind of data do you expect to present in 1Q in terms of — any kind of color you can provide in terms of the scale of the dose cohorts, number of patients, will they see humoral and T cell response? And then as a follow up, in terms of later stage development for influenza or COVID, is it possible to have or is it kind of in consideration to have later stage programs before the start of the next kind of flu season? Thanks.

Franz-Werner Haas: Thank you. So the expectation, and this is what we tried to put into the presentation there as well, the readouts, what we want to see is certainly chemical modified versus non-chemical modified as we tried to explain that the second-generation backbone is playing a role on our technology level, then also for oncology where we want to start clinical trials in the next year. So it’s going far beyond infectious disease, therefore, non-chemical modified as well as chemical modified, then certainly the monovalent versus the multivalent, which is the first clinical trial we started in South America earlier this year, to see exactly this one because this is a technological effort there as well, if you put more RNAs into the same vial, especially starting with a low dose, and that certainly, of course, is our three other points.

One is the reactogenicity, which was giving us a bit of a problem in the first CVnCoV, as you know. The second one is the immunogenicity. So what is really the antigen expression and various neutralizing titers. And the third one is certainly also the T cell presentation, which then again plays a role beyond infectious disease for oncology there as well. So these are the main points we’re looking into next to what does it mean — and this is to address your last part of the question, what does it mean for further product development in COVID as well as in flu?

Evan Wang: Great. Looking forward to the data. I’ll jump back in the queue. Thanks.

Franz-Werner Haas: Thank you.

Operator: . Our next question comes from Jonathan Miller with Evercore. Please proceed.

Jonathan Miller: Hi, guys. Thanks for taking my question. Maybe on those COVID trials, how much visibility do you have currently into the unmodified product? Because it seems like obviously that was expected this year, it seems like it’s getting pushed back a little bit to share the stage with the modified RNA. Is it fair to say you’re waiting on those modified results before you want to message anything on the unmodified? And to what extent is that decision being driven by GSK holding disclosures back here versus the results that you’re seeing from the unmodified backbone? And then secondarily, I’d love to check in on the IP lawsuits that are ongoing on the COVID products. Where are you in the process now? And what’s the typical timeline to visibility on those lawsuits in German courts, and any plans you have to pursue similar suits in other jurisdictions?

Franz-Werner Haas: Thank you for this question. On the data, it was always considered when we started these clinical trials that we didn’t want to compare separately — that we didn’t want to communicate separately on chemical modified versus non-chemical modified in the same indication here because this would just not make sense. We are, and that’s the goal, what is the next step for product development? And for that you need to have the completion of the data on the modified as well as the non-modified. And this has nothing to do with holding back data. This is exactly meeting the expectations when we started this program. And therefore, the visibility is not high at the moment, because the readout is really to see, okay, what is the next step for product development?

And this is why we both, GSK and us, have been structuring exactly these clinical trials and then certainly also the readouts and to report on this one to give us a full picture. On the IP timelines, the process as we’re talking about here, the claims we have started against BioNTech here in Germany, this is as you can consider a very complex file, which we handed in, which will be responded by BioNTech. And this will take a while in order for the court to look into and to evaluate. There has been no public hearing, which then certainly would give us an insight how the court at least would see this. So with this one, I’m just going to say that the process has been started. It is following the normal rules of the process. And we are waiting for first — from the court and follow the process from here, definitely nothing in this year as much as I can say now.

Jonathan Miller: Okay, fair enough. And then maybe I guess on the onco vaccines, could you just go into a little bit more detail about the usage of non-coding areas for antigen identification? How frequently do point mutations in non-coding regions result in expressed antigen that’s targetable in a vaccine context?

Franz-Werner Haas: Thank you very much for that question. We’ve done the numbers for a couple — for quite a series of tumor samples. And roughly, you could say that out of every junction where one chromosome gets coupled to another chromosome, about 1 in 10 actually results in that activating an un-coding sequence to become part of a gene which is on the other side of the junction, and therefore becoming translatable and also detectable if we look at that in cells that we’ve studied, both cells taken from tumor cells, also cell lines and cells taken from mice as well. So it’s about 1 in 10 cases where it actually results in such an expressed sequence.

Jonathan Miller: For this chromosomal rearrangements, not — obviously not just point mutations in non-coding regions.

Franz-Werner Haas: That’s right. I would say that a point mutation in a non-coding region doesn’t contribute much to the antigenicity, right, because there’s no reason why it will be coding and we haven’t followed that up at all. So expanding the sequencing to the 98.5% non-coding is, in my view, especially interesting for detecting those rearrangements that lead to stretches being expressed and not to the point mutants in those stretches.

Jonathan Miller: And then as a follow up to that, obviously chromosomal rearrangements are relatively frequent in tumors overall. But how often are those rearrangements basal to the tumor, that is to say how often is the tumor clonal for those coding rearrangements across all the cells in the tumor?

Franz-Werner Haas: Yes, those are two different questions. Actually we’re writing a manuscript to give you all the numbers. We’ve looked at many cancer types and also looked at data that were not generated by ourselves, but available in public databases. And indeed, in different indications, the frequencies of such rearrangements differ, sometimes in an interesting way. For example, glioblastoma is obviously poor important mutants, because brain cells are very much protected from the environment, that we find glioblastoma to be relatively rich in such chromosomal rearrangements. So that’s an interesting point to look at indeed, as you point out. The second is the choice of the antigens for designing vaccines in a personalized manner.

And then what’s crucial is what in technical terms is called the variable allele frequency. That means if we know, because we sequenced the tumor, let’s say 100 times deep, so every site in the genome was sequenced 100 times. So we know rather precisely whether the tumor sample that the surgeon or the biopsy person has given us is 25% tumor material or 30% or 40%. So we know precisely whether a certain rearrangement is present at all the tumor cells or only in a subset of them. And we basically base everything on the ones that are clonal in the sample so that as far as we can know from that sample are present in all of the tumor material. Does that answer your question?

Operator: Our next question comes from Roy Buchanan with JMP Securities. Please proceed.

Roy Buchanan: Hi. Great. Thanks for taking the questions. I guess the first one is financial. How should we think about the expense trajectory for 2023? How much are you planning to spend on implementing The RNA Printer in the clinic? Can you remind us where the GMP 4 site is in development and how much is funded by the German government? And then finally on the printer, have you had any engagement with the FDA or plans to engage ahead of potentially using it in a trial? Thanks.

Pierre Kemula: Hi, Roy. How are you? It’s Pierre. I’ll take a couple of questions. I’ll probably pass on the FDA discussion. We don’t break down the allocation of our cash per item, like the printer or GMP 4. But when we look at the year to come, we are closing our budget process now. So it’s still subject to some changes, but the idea is that with the cash position we have, we should be able to sell through the whole of next year and a bit of the following year, right. And at the same time, make sure that we continue to fuel the strengthening of the platform, and I think we went through long strides in the presentation to try and give you a sense of what we’re doing. And on GMP 4, so the way it works, you’re right, we have this pandemic preparedness, contract with the German government.

The idea here is that we basically pay upfront and then we get yearly fee from the German government, right? So we would have to make sure that the client is ready to go and fully, I would say, resourced, but then all that is more than paid for by the German government.

Franz-Werner Haas: Yes, so there was a question on do we discuss with the FDA on the printer, and this is — maybe, Ulrike, you can take that one.

Ulrike Gnad-Vogt: Yes. So we plan several health authority interactions during the course of ’23, including interactions with FDA, and this will also address questions related to the printer.

Roy Buchanan: Okay, great. And then maybe a follow up. The two cancer Phase 1s that you’re talking about, where are they going to be conducted and what’s the delivery? Is it IM, IV? Are you using LNP? It sounds like you’re using LNP. Thanks.

Ulrike Gnad-Vogt: Yes, actually the countries and locations will be communicated in due time. The second part of your question was about the LNP, and there we will use the same LNP formulation we are using for our current prophylactic vaccine candidates. And that will be injected intramuscularly.

Roy Buchanan: Great. Thank you.

Operator: Our next question comes from Zhiqiang Shu with Berenberg. Please proceed.

Zhiqiang Shu: Thank you very much. I have two questions. First on the cancer vaccine pipeline online today, I wonder for the two proof of principle studies you’re going to do the first on glioblastoma, I guess can you provide additional rationale on why you’re going to first use glioblastoma as a proof of concept. And we all know it is a tough cancer to crack. Any color there would be great?

Ulrike Gnad-Vogt: Yes. So thank you for that question. So indeed, this is a tough cancer but also an indication with very high unmet needs and where we see a potential clinical window of opportunity to apply vaccination at a point in time where patients have completed the surgical resection and standard of care radiation therapy that’s a point in time where the tumor is being controlled or the residual tumor is limited. And here we see still space for vaccines to make an impact in the future. We will also invest in discovery of new and additional antigens in that indication as tests elaborated, and also look for potential to apply combination treatments with potentially synergistic agents to overcome the immunosuppressive microenvironment.

Franz-Werner Haas: Perhaps also on top to say that with the technological advancements we’ve been doing over the last few months even, this multi-epitope approach certainly can be covered by mRNA from a technology point of view.

Ulrike Gnad-Vogt: Exactly.

Zhiqiang Shu: Got it. And then second question on your proprietary non-pegylated LNP, I guess just looking at the data you released on Page 16, it looks like the humoral activity is high in neutralizing antibody titers. Does that protein expression from the mRNA based on your new LNP formulation?

Ulrike Gnad-Vogt: Sorry, could you repeat the question? You were breaking up there for a minute.

Zhiqiang Shu: Sure. Sorry. On Slide 16, some of the data on non-pegylated LNP formulation and I think you showed — just looking at three panels, you showed the neutralizing antibody titers are higher based on your new technology. I wonder does that mean the mRNA protein expression is higher using your new formulation.

Ulrike Gnad-Vogt: Exactly, they are higher. And this is a trend that we see. And we consider this a positive trend but at the moment, nothing more than a trend. You see that — it’s a nice one because you see that the interferon gamma and interferon alpha is very much comparable. But yes, there is a tendency to slightly higher neutralizing antibody titers.

Zhiqiang Shu: Do you envision this to be used in the cancer vaccine platform or more on the infectious disease franchise?

Franz-Werner Haas: So we see that this is an improvement of the LNPs and certainly that’s exactly the franchises we have; the one is oncology, prophylactic vaccines, and then also molecular therapy. And that’s exactly what we are investigating. So we see this as part of our technology, and then to be applied or even optimized in the field where it’s going to be used. But certainly oncology is a field, even though we start — what Ulrike was saying before, we start with the available LNPs, which are on the vaccines at the moment. Certainly, we will bring our own LNPs then into exactly these different areas, and oncology certainly is core.

Zhiqiang Shu: Great. Thanks very much. Congrats.

Operator: Our next question comes from Luisa Morgado with Kempen . Please proceed.

Unidentified Analyst: Hi. Thanks for taking my question. I just have one. For the cancer vaccines, what do you predict will be the ratio for the off shelf or personalized cancer vaccines?

Franz-Werner Haas: You mean the ratio between in numbers of — because we’re developing both and developing trials for each of those approaches. And they are under development, but they will both be developed in full. And as was pointed out in the introduction, we see — but that’s a long-term view, of course, that there will be patient groups which one will be applicable and patient groups for which the other one will be, let’s say, required because by an off the shelf, you cannot reach enough, and I think is space for both. Does that answer your question?

Unidentified Analyst: Yes. Do you have any, maybe any idea what is the percentage of one and the other in terms of number of patients that will need it?

Franz-Werner Haas: That’s really early to say. It’s also an entirely different approach. You have to keep that in mind, right, because if it’s off the shelf, and of course scalability is favorable. But if it’s required for efficacy, then one needs to go fully personalized and time will tell.

Unidentified Analyst: Thanks.

Operator: We have a follow up from Roy Buchanan with JMP. Please proceed.

Roy Buchanan: Hi, great. Thanks for taking the follow up. Appreciate the detailed timing for the COVID and flu trials in the first quarter. I’m just wondering if you have a sense of which one might read out first.

Franz-Werner Haas: That’s a very good question. We cannot say because the recruitment is not fully finalized here. And therefore it’s very hard to say, very hard to say. But we hope that everything will come close, that we will have a complete readout. But as I said, the recruitment, especially if you go then in the elderly, this will take — there’s a certain sequence of events on the recruitment. This is exactly what will decide on the timelines here. And as it is not completed yet, it’s very hard to say.

Roy Buchanan: Okay, got it. And then a detailed question I guess on the workflow on Slide 18. You have fill and finish grade out. I assume that’s because that’s not relevant in the personal vaccine setting or is there some other reason. Can you just explain that? Thanks.

Franz-Werner Haas: You are asking about their workflow in Slide 18. Yes, so the timing there is that the sample is taken and within two weeks, we can go from the sample to design of the vaccine. And then, of course, it needs to be manufactured and quality controlled. And in reasonable clinical practice that should be done within six to eight weeks at max, which is what we’re currently working on. As you have been referring to the fill and finish, this is exactly where the printer should play a role that then you have got everything at the same spot. And then in the small scales, the fill and finish should not be a limiting factor here either.

Roy Buchanan: Okay, got it. Thank you.

Operator: Thank you. At this time, I would like to turn the call back over to management for closing comments.

Sarah Fakih: With this, we would like to conclude this conference call. Thank you very much for your participation.