Following is the unofficial transcript of a CNBC interview with Moderna Inc (NASDAQ:MRNA) CEO Stephane Bancel and CNBC “Squawk Box” Co-Anchor Joe Kernen live during the D50X Summit today, Thursday, October 20th.
Interview With Moderna CEO Stephane Bancel
JOE KERNEN: Hello, thank you. Disruptor of the decade at least, Stephane. And it is a household name. And it’s 50 billion now, but maybe a sore subject – but it shouldn’t be – it was 150 billion at the top. So, congratulations.
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I mean, it epitomizes what disruption really means and it's got nothing to do with financials. It is what you were able to do for the world. I think we all realize that and we thank you for that. It's mid-October, though, Stephane, I was hoping we could talk about the future of Moderna in terms of cancer vaccines, and we're going to.
Unfortunately, we still need to talk about Covid. At this point, we hoped that the pandemic was behind us, but we see Covid cases rising in parts of the country, even in New York it got as high as 20%. Just in general, what are your thoughts on where we are in the pandemic?
STEPHANE BANCEL: Well, Joe, good afternoon and thank you so much to have me. It's good to be back with you. Well, I think that we need to make sure that people, you know, get all the tools that we have today.
You know, we have vaccines, we've retooled the vaccine to be Omicron specific. And if you look at the numbers, I think only 5% of Americans so far have gotten boosted. And as we go back indoors, this is going to be a problem and it's true around the world that some countries are having great rate of vaccination, and the virus keeps evolving.
So, we need to be careful, to protect ourselves and to also protect others through vaccination.
KERNEN: Well, that is part of the beauty of your model, of messenger RNA. You can always do software upgrades. So, you got a new 90-day study on the bivalent booster. This is progress, I think.
It's showing quite a bit better results than standard boosters. Are we going to be seeing this and we're going to take one of these every year, Stephane, eventually and it's going to be almost akin to a flu vaccine?
BANCEL: We think so Joe. Again, with science, we ought to be humble and careful. The virus has surprised us many times. But if you think about what some leading scientists believe, is that first, the virus is not leaving the planet – it is going to stay with us forever. And so, we will have to get annual booster, we will have to figure out how do we adapt them.
The thing as you said that is a unique about the mRNA technology, it's the speed to change the product. I don't know if everybody has realized but we are told by the FDA on June 28 this year that they wanted to be a four, five containing booster for Labor Day weekend.
And by Labor Day weekend, it was reviewed by FDA, it was approved by CDC and U.S. pharmacies across the country. And that is just unthinkable using traditional analog technology. And if you think about what it is going to do for things like flu as well, I mean, think about how we do flu today.
Because of long-lead manufacturing time for the manufacturers, we basically have to guess, you know, back in February, what is the string that's going to be separating in the U.S. the following Fall. And if you have a mutation happening in the meantime, you have the wrong product and people get hospitalized, people get sick, people die much more than is needed.
Sometimes what you have happen is the strain that are guessed by the WHO might be the relevant one in Europe that Winter, but not in the U.S. We can also customize product by region and so I think what we can do to help people with this technology is something that not enough people are truly understanding today.
KERNEN: Well, it can’t be over fast enough. And I think for Moderna as well, Stephane. You’re going to be obviously part of the solution to whatever this looks like over the next two, three, four, five years.
But I've actually read that there was something that I would refer to as Covid fatigue. Even at Moderna, you have so many other uses you could potentially do with cancer and really anything where you need to make up a protein deficiency.
Messenger RNA might be adapted to so many different platforms. And then a variant arises and you’re back on the Covid, you know, designing another Covid vaccine. So I think you want it to be over, too. But you've done very well with just the vaccine and now gives you the financial flexibility maybe to pursue all these other avenues of research for messenger RNA.
BANCEL: Exactly, Joe, and what we've done is even during the pandemic, we didn't stop working on cancer. We didn't stop working on rare genetic disease. You know, the team is 4,000 people now. So, it's a big team.
You know, we have $17 billion of cash, so we're investing that capital to grow a platform to make more products – we have now 46 drugs in development that's 46. We shared at our R&D day in September some very exciting progress on rare genetic disease where kids are missing an instruction of protein inside the liver.
You cannot make a medicine for it using a small molecule or protein or recombinant. But if you can get the mRNA inside the cells and enough of that protein that you and I have, those kids should not be hospitalized. And the data we've shown in patients is a huge drop into hospitalization.
We're still working on the frequency of those age on adults, but things are looking really exciting for those kids and those families. And if one works, because we have thousands of rare disease in the liver, we can very quickly update the product to the different protein and have a new drug. We have now six rare disease drugs in development and many more to come.
And every one that you talked about is cancer. In America announced recently that they decided to exercise the option to partner on a 50/50 profit share for personalized cancer product where we make a different drug for every human being. And the data, as we've said, should come by the end of the year.
It's a phase two study. It's powered interstatistically if there are enough patients and the control arm is – monotherapy which as you know, is the gold standard in oncology. So, we're very excited to get that data when it comes out. And of course to share it with the world.
KERNEN: Keytruda, a monoclonal antibody obviously, that's had a lot of success with different tumors. Do you think that the personalized cancer vaccine it's a good candidate to go with Keytruda? It couldn't be a single therapy, Stephane? What's the idea there to use it in conjunction with Keytruda for melanoma? What's the advantage?
BANCEL: Yes, so what we're trying to figure out, Joe, is how do we help the immune system – as you know, because of your biology background – if we have a tumor growing into a patient turning into disease, it is because the immune system has initially not seen the cancer cell. As you know, we all have cancer over many, many times in our lives.
But if you're healthy with a good immune system, your immune system sees it early and literally chews up the cancer cell and we live on with our life. But if something is wrong with immune system meaning aging, stress, many other different factors, that one cancer cell becomes two, becomes four and then you have a tumor.
And so, the question as we've seen with immunoncology with Keytruda is can you go see and help the immune system, kind of see what it was not seeing. So, what we're trying to do here is to basically take a biopsy of a patient, next gen sequencing data three gigabytes of letters, do the same on one heavy cell of your body, sandbox with AWS to look at the mutation.
Where does a mutation happen? Because as we know, cancer is a disease of DNA. And then design a product to filter for mutation, that's your T-cell should see. And we make that product in around 30 days. It's injected into the arm like a normal vaccine.
And what we saw in the phase one data, which we presented at ASCO in a big oncology meeting, is that after three or four dose, we've demonstrated in humans, in cancer patients, that we can get their T-cell to recognize the mutations. Now, of course, the big question is, is it enough to get the clinical benefits to prevent deaths? That's what we'll know by the end of the year.
KERNEN: It is pretty amazing. And it's relatively recent, I guess, thinking about cancer. And every single tumor is as unique as the individual that has it, which – so the ability that rapid sequencing gives you to take an individual's tumor, sequence it and design.
I looked a little bit into this, Stephane, so everyone has a – and it results in a neoepitope which gives you the neoantigen, which is expressed – post-translationally which I don't understand, so it's not just from the DNA, right? It's all the way as the actual protein is being made.
BANCEL: Correct. It is a protein.
KERNEN: Why doesn't the RNAs – but why doesn't the immune system recognize the, for lack of a better word, the neoantigen on the tumor? Why do you have to amplify it with the messenger RNA, which I guess you make a lot of copies of that antigen, and so, there's so many that it gets ready for it and then attacks tumors. Why doesn’t it see it on the original tumor?
BANCEL: Yeah, and that's a piece about the immune system, you know, not being as robust as we age. Not as robust as we are unhealthy. Stress –
KERNEN: You're amplifying copies to get enough. And then the T-cell actually might mediate the rejection of the tumor, which we do when we're younger.
BANCEL: Exactly, that's exactly the idea. And so, what we showed in the phase one in patients is we can activate T-cell because we take the blood of our patients before giving the drug and after giving the drug and you can see that the one we call because we know which one we put in the product, we see the increase in the T-cell activity.
Now the big question is great, you have a proven mechanism, but can you see an improvement in outcome, in disease prevention, in reduction of deaths, and that's for phase two data that we will get before the end of the year.
The piece that I'm excited about is that we've done a study so we're going to know how every curve differentiates and how big the division is between – therapy as the gold standard and Moderna. That's for the end of the year.
KERNEN: Do you think about the way we've approached cancer all along, Stephane? And if every single tumor is specific to that individual and unique, I mean, you know, the overall approach was never going to work, was it? Maybe that's why it's been so tough. Maybe this is what we need to do, since each person has a completely different tumor than the person right next to them with the same disease.
BANCEL: Yes, that's a piece that is fascinating, Joe, about what we've learned as a scientific medical community over the years and the big progress in oncology in the last five, ten years with immunoncology is we're starting to understand that cancer is a disease of DNA as a mutation.
And that the role of T-cell and the immune system is fundamental in keeping us healthy. And so what are the different tools are like Keytruda, Moderna cancer vaccines to tweak together, to get the immune system to do what it's supposed to do when you're healthy, which is just to go and clean out those cancer cells out of your body.
KERNEN: Stephane, during the pandemic you agreed to a patent detente, if you will, with Pfizer. But that's off now and you sued the company for infringing on some of your mRNA IP. What can you tell me about the details? Because I'm trying to get my head around what it would mean to try to patent a natural biological pathway that we all have. That's been argued before. You can't, I don't think, patent a gene because it's naturally occurring. How do you patent messenger RNA therapy? How do you even claim to do that?
BANCEL: Sure, and you're correct. Courts have ruled out that you cannot patent a natural gene. But if you think about the mRNA technology, what we had to do, and as you know, many people try to do mRNA drugs over the last 20-plus years without success.
What we try to do is to figure out how do you make a safe and effective mRNA molecule, get it into the right cells, at the right dose, and consistently. And so, if you think about the mRNA molecule that you get if you get the vaccine, that molecule does not exist in nature – all modified.
For example, lets use mRNA that you and I have in our cells. The lipid that we put around it, we invented. Our chemists invented that lipid, that little ball of fat, and all its micro components. How we make it is something that we have to invent. Nature doesn't make mRNA modified into a little lipid. That's not how our body works.
So, there's dozens and dozens of things like this that we invent and if you think about it, you know, we've been working on the vaccine in 2013, 2014. We're in the clinic in 2015. And if you look at the facts, and it's all out there, public data, no other company in the world was doing modified messenger RNA with lipid around it in the labs or in the clinic, nobody.
And so as you know, we've been filing literally hundreds of patents over the years. And so, we have not one but a whole arsenal of inventions that our team has made. They've been in publications, we have patent filing, and so I won't comment too much more because we'll see. The process is ongoing. But the historical facts are very clear.
KERNEN: Are you claiming that BioNTech, Pfizer's partner, actually used your technology or did they separately independently come up with the lipid methodology to do this, and you're saying you already had that patent and so they couldn't do that?
Are you saying that they took your technology or did they develop it independently? And does that matter if you've already patented it?
BANCEL: Yeah, so what we're seeing is a lot of inventions that we made first that we filed, and that we believe are being used in the BioNTech vaccine. So again, the court will have to decide what happens and look at the facts. It's all you know, facts base. But we are we are quite confident of our case.
KERNEN: I mean, patents are obviously important. Disputes are a fact of life in biotechnology, but Moderna reaped billions in profits, and you've done so well.
Was there any thought of just – why do you think it's necessary to go after Pfizer at this point when there was a – I don't know if you'd call it a truce, but you weren't doing it in the height of the pandemic. Why now? Is it that important to protect your intellectual property?
BANCEL: So, you asked several questions. Why now and not before. Before during the pandemic, we wanted to have no distraction to ourselves and to any other player in the field because the only one goal that we should have had and we all had was to fight this virus.
And everyday mattered and I didn’t want to spend a minute of my life on IP or have anybody else in other companies do the same. Number one priority the virus and the vaccines to people and as much as we could. Now it is a very different ballgame.
There is more vaccine in the world than people are willing to take. We had to disclose, as you know, in our Q2 numbers – same as Pfizer, same as Novavax – putting huge quantities of the vaccine into the garbage because now the world has too many.
So, we thought that it was important for the shareholders of the company for so what's to come because this is a platform. This is not an analog company where all our drugs are different with no correlation.
This is a platform company. It is probably the first platform company in the biotech space where you can only from one drug to one, use the same technology toolbox, change the sequence and go with a product.
So, protecting that technology is protecting the entire portfolio. That's why it's very important for us. It's not only about Covid.
KERNEN: I was told I can go a little longer. I've already -- I'm getting a wrap, but I got one more question for you, Stephane. And you know, they never wrap in the morning. The future, look, how does the future look for biotech?
And here's what I'm talking about. We've got deficits – huge deficits, worries, exorbitantly expensive technologies. An aging population. We can't possibly afford to give every member of the population these incredible drugs.
What's the right balance? Do we cap prices? What did you think of the recent legislation in the what's known as the Inflation Reduction Act? What did you think of the price caps there? Is it helpful? What's the right balance?
BANCEL; So I think price caps are not helpful and look, as you know, you can tell from my accent, I'm French. In Europe, the pharmaceutical industry was destroyed over the last 40 years.
Destroyed because of price cap. When you go through innovation like Moderna, you don't know how much capital you need. It's incredible risk investors are taking. So you need to be able to quickly return.
To your second question on how do we make the whole system work. Is I think first, when product come out of patents with a very quick decrease in price for competition, we are letting the marketplace take this role.
As you know, this has happened in small molecule, it has been very slow in large molecule. So you have protein products in the market for a long time. There should be with generics taking over reducing that bill for payers around the world. That's really important.
And I think companies have to also figure out a way to provide value. As you know, some products are launched at price that are very hard to justify value for the healthcare system. And we know at Moderna that we have to use our platform to be innovative.
For example, we've committed to no sell vaccines at costs in low-income countries. And we're going to continue to do that as we launch more and more vaccines outside of Covid. Rare genetic disease.
We've announced last year with UPenn that actually we gave to UPenn a drug for new found rare disease. Around 200 kids in the world.
And the way we came to that conclusion so given the drug, all VIP rights for that drug is – so rare disease in our liver, is we said if we were to do it by charging just to return of capital for R&D and risk, the price per family will be in the millions of dollars. And we were like this makes no sense.
So, we went exactly how – we are saying why don't we give a drug away for free to the foundation at UPenn, we will provide for free the material for preclinical study in animal. We will commit – we have by contract committed to provide the material for clinical study.
And we've committed by contract that drug is approved more than was supplied to all patients and families forever for free the drug. It is going to cost us millions of dollars, not hundreds of millions of dollars.
And we think it is part of our duty as a key player in healthcare to be creative, because we are together to figure out how do we deal with demographics, how we deal with the economy, but how do we not still bring innovation and price cap? Look at Europe is not the answer. It will destroy innovation.
KERNEN: Well, watching your career and I found out so you attribute it to Jesuits. And I do, too, to the Jesuit education. And I didn't realize that we have that in common. I don't know whether you were ever jugged or got in trouble like that.
Have you heard of that? When you get in trouble with the Jesuits. It's not pretty. Anyway, Stephane, thank you. I'm glad we both did that. And thank you for being on today. And I really do. I was serious. Disruptor of the decade. Incredible. Thank you and congratulations.
