Vaxcyte, Inc. Price & Performance (PCVX)

Thank you, operator, and good afternoon, everyone. I'd like to welcome you to Vaxite's earnings conference call to discuss our 2024 results I'm joined today by our Chief Executive Officer, Grant Pickering and our Executive Vice President, and Chief Operating Officer, Jim Wassill, Earlier this afternoon, we issued a news release announcing our results. Copies of this and our other news releases latest corporate presentation, and SEC filings can be found in the Investors and Media section of our website. Before we begin, I'd like to remind you that during this call, we'll be making certain forward looking statements about Vaxcyte which are subject to various risks and other factors that could cause actual results to differ materially from those referred to in any forward looking statements. For a discussion of the risks and uncertainties associated with these statements, please see our press release issued today as well as our most recent filings with the SEC. Including the risk factors set our Form 10 ks for the year ended December 31, 2024, and any subsequent reports filed with the SEC. With that, I'll turn the call over to Grant Bickering. Grant? Thanks Andrew. And all of you on the call and webcast thank you for joining us today.

Vaccines are one of the most powerful innovations in modern medicine. Transforming public health by preventing disease, reducing hospitalizations and saving millions of lives every year. Beyond protecting individuals, vaccines are essential to global health security curbing outbreaks alleviating pressure on healthcare systems and delivering This outsized impact is particularly critical for bacterial infections. Where vaccines play a key role in reducing antibiotic use and combating the growing threat or AMR of the most pressing public health challenges of our time. Against this backdrop, 2024 was a defining year for Vaxcyte as we continued to advance our mission to protect humankind from the devastating impact of bacterial diseases including invasive pneumococcal disease or IPD. While pneumococcal conjugate vaccines or PCVs have long been an important element of global immunization programs our vision extends beyond hemococcal vaccines. We are building a robust pipeline of novel broad spectrum vaccines designed to address some of the world's most widespread bacterial threats. Including Group A strep, periodontitis and Shigella. These programs alongside our PCBs reinforce our commitment to delivering lifesaving vaccines can have a meaningful impact on public health. As we continue to advance our pipeline, our PCV franchise remains the cornerstone of our efforts to address one of the most persistent and deadly back [indiscernible] The global pneumococcal vaccine market currently valued at approximately $8,000,000,000 in annual sales continues to expand with the adult segment poised to grow significantly.

Driven by expanded vaccination guidelines in The U. S. In other developed countries. The infant segment remains the largest piece of the market today at an estimated $6,000,000,000 in annual sales. However, despite decades of vaccination efforts, it is estimated that streptococcus pneumonia accounts for [indiscernible] three hundred thousand deaths globally each year children under five years old.

And remains a leading cause of vaccine preventable deaths in this age group. In The U. S. Alone, more than one hundred and fifty thousand hospitalizations occur annually, to pneumococcal pneumonia. Underscoring the urgent need for broader spectrum coverage. Over the past year, our team has made meaningful progress in the clinic across our PCV franchise in the pediatric and adult populations. The pinnacle achievement for Vaxite in 2024 was the stellar Vax 31 clinical data in adults. In September, we announced those top line results comparing Vax-thirty one to PCV-twenty in healthy adults aged 50 and older. We believe these results validate the potential of our site specific carrier sparing platform to deliver the broadest spectrum PCBs providing protection against both currently circulating and historically prevalent serotypes. Based on the robust strength of this data, we are advancing Vax-thirty one into a Phase three program for adults. We are also encouraged by our progress in infants. With the Vaxcyte study fully enrolled and data expected by the end of this quarter, and the Vax thirty one infant program underway with the first key data set expected in mid-twenty twenty six. Beyond our PCB franchise, we continue advancing our early stage vaccine candidates that address diseases that contribute significantly to AMR.

Which is a global health crisis that if left unaddressed is expected to become one of the leading causes of death by 02/1950. While no single solution can fully address AMR, vaccines play a critical role in reducing reliance on antibiotics. We are incredibly proud to be at the forefront of developing vaccines that target drug resistant pathogens. And we look forward to providing further updates on our pipeline throughout the year. Our clinical progress continues to be driven by strong operational execution, including manufacturing scale up. As part of our longstanding partnership with Lonza, we are executing on our plan to establish a purpose built large scale manufacturing suite within Lonza's IVEX dedicated Biopark. Build out of this dedicated facility began in late twenty twenty three and remains on track to be completed by early next year.

Future global commercial supply for both the adult and pediatric indications. Ensuring we have the capacity to meet anticipated demand. Also, as a reminder, we are leveraging our existing manufacturing infrastructure with Lonza to support the anticipated U. S. Launch of Vaxcyte the adult [indiscernible] With this foundation in place, we are well prepared to execute on our plans and bring broad spectrum vaccine. Our ability to advance these programs is underpinned by a strong financial position, ensuring we have the resources to advance clinical development, scale manufacturing and drive commercialization. To provide more details on our financial strength and outlook, I'll now turn it over to Andrew. Thanks, Grant. The details of our fourth quarter and full year 2024 results and the reasons for the variances to the comparable 2023 periods reflected in our 10 ks filing and summarized in today's press release. Baxite's financial position remains strong. With $3,130,000,000 in cash, cash equivalents and investments as of 12/31/2024, which includes $2,200,000,000 in net proceeds from the successful follow on equity offerings last year Turning to the income statement. The increase in R and D expenses in 2024 was due primarily to increased development and manufacturing activities. In connection with the adult and infant PCB programs.

Including to support potential future commercial launches as well as growth in R and D personnel. The increase in G and A expenses was driven primarily by higher personnel For the build out of the dedicated manufacturing suite at Lonza, to support the potential global launch of our PCB programs, FactSight incurred an additional $127,800,000 in capital and facility expenditures last year bringing the project to date total to $214,300,000 about 60% to 70% of our original $30,350,000,000 dollars estimate to which we continue to track. As we look ahead, we expect a substantial increase in both R and D and G and A expenses in 2025. Particularly within R and D. Over both full year and Q4 twenty twenty four annualized levels. This expected increase is primarily the result of manufacturing related investments to prepare for our initial launch in the adult market including to build inventory, the initiation of the VAX-thirty one adult Phase three clinical program, and the growth in the number of our employees. To support these and other initiatives. Consistent with historical results, we expect R and D expenses to fluctuate by quarter largely based on the timing of manufacturing activities. The significant majority of the costs related to the construction and build out of the dedicated manufacturing suite will not run through the income statement and instead will continue to be reflected on our balance sheet in two separate line items.

Property and equipment and other assets. Once the build out is complete and manufacturing activities commence, the costs will then run through the income statement. Turning to cash runway, we expect that our cash cash equivalents and investments which as I noted totaled $3,130,000,000 as of 2024 year end, will be sufficient to fund our operating expenses and capital expenditure requirements through several expected key milestones over the next few years.

These include the VAX24 infant Phase two study primary series and booster dose data readouts the initiation, completion and data readouts from all of the anticipated Phase three studies for the Vax 31 adult Phase three program The VAX-thirty one infant Phase two study primary series and booster dose readouts and the completion of build out a dedicated manufacturing suite at Lonza. We remain committed to financial discipline and to making strategic investments that maximize long term impact and the steps we are taking today position us sustainable and meaningful growth. Beyond financial and operational execution, 2024 also marked the establishment of a dedicated public affairs function, enhancing our engagement with policymakers and public health stakeholders. We have been working constructively with the new administration to ensure that science driven, evidence based policies continue to guide vaccine development, and public health decision making. In parallel, we will continue to engage with the FDA CDC and ACIP to foster a regulatory framework that continues to encourage investment in vaccine innovation and manufacturing. During our engagement with key government stakeholders, by bipartisan acknowledgment that vaccines are not only a cornerstone of public health, but also one of the most cost effective interventions available.

It is estimated that vaccination in children over the last thirty years in The U. S. Will result in direct savings of $540,000,000,000 and societal savings of 2,700,000,000,000.0 and expanding vaccine uptake among adults is equally important. As vaccine preventable diseases cost The U. S. Economy estimated $27,000,000,000 annually and direct and indirect expenses.

At that site, our mission remains clear. To deliver broad spectrum vaccines that address significant unmet needs. We are confident in the strength of our science, and the broad understanding of the critical role vaccines play protecting global health. I will now turn it over to Jim for additional commentary on our and the upcoming Vax24 infant study data readouts Thanks, Andrew. Our PCV franchise continues to advance with major clinical regulatory and manufacturing milestones. Reinforcing our leadership position in pneumococcal vaccine innovation. Over the past year, we have made strong clinical progress across both the adult and infant program.

With compelling data in adults supporting the potential to set a new standard in disease coverage with our carrier sparing platform. For the adult indication, FACT 31 delivered strong results its Phase onetwo study. Demonstrating robust of cyanophagocytic activity or OPAL responses across all 31 serotypes. FACT 31 was observed to be well tolerated and demonstrated a safety profile similar to PCV20 at all doses studied through the full six month evaluation period. The middle and high dose of VACQUITY when met or exceeded the non inferiority criteria for all 20 serotypes shared with PCV20. At the Vaxcyte high dose, average OVA immune responses were greater for 18 of 20 serotypes compared to PCV20. With seven of these serotypes achieving statistically higher immune response. At the middle dose, open responses were greater for 13 of 20 serotypes and five serotypes achieved statistically higher responses compared to PCV20. Additionally, all 11 serotypes unique to BAC-thirty one met this purity criteria at all dose levels reinforcing the potential for Vaxcyte to deliver the broadest spectrum protection to date. Based on these results, in November 2024, the FDA granted breakthrough therapy designation for VAK-thirty one in recognizing its potential to set a new standard in pneumococcal disease prevention.

This designation unlocks expedited regulatory pathways with more frequent and senior FDA engagement, potentially streamlining our progression Pending an end of Phase II meeting with the FDA, we remain on track to initiate the Vaxx3-one adult Phase three pivotal non inferiority study by mid-twenty twenty five with top line safety, tolerability, immunogenicity data expected in 2026. Also anticipate initiating the remaining Phase three studies for VAC-thirty one in 2025 and 2026. With the last of the studies to enable a BLA submission. For the infant indication, we continue to advance both the '24 and VACS 31 programs in parallel. In March of last year, we completed enrollment for the Phase two study of VAC-thirty one in The U. S. And 24 in healthy infants enrolling a total of eight zero two participants in a two stage study designed to evaluate [indiscernible] tolerability and immunogenicity By the end of this quarter, we expect top line data from the primary immunization series comprising the first three doses administered in the first six months of life. With data from the booster dose administered at twelve to fifteen months of age anticipated by the end of this year. As you will recall, the primary immunization series is a critical indicator of disease protection during the entrance vulnerable first year.

The booster, evaluates anticipated durability of protection through the first few years of life ensuring sustained immune protection during this heightened period of risk to pneumococcal disease. This study and for all precedent infant PCB studies, the primary immunogenicity endpoints [indiscernible] those three and post Those four are based on immunoglobulin G or IgG antibody concentration. Whereas in adult PCB study, primary immunogenicity endpoint is OPA. This VAX-twenty four infant study is evaluating the IgG responses compared to PCV20. For the 20 serotypes common with PCV20, the primary endpoint post dose three is based on the percent of participants who achieved the predefined IgG concentration threshold of greater than or equal to 0.35 micrograms per mL. Represents the SERA conversion rate. To meet the historical non inferiority requirement in Phase three trial, The lower bound of the 95% compound must be within 10 percentage points [indiscernible] on a serotype by serotype basis. Based on precedent and PCB programs, the four incremental serotypes unique to Vaxcyte will be compared to the lowest performing PCV-twenty serotype other than serotype In Phase two studies, for which the compensators are wider due to the smaller sample size compared to a Phase three trial, Sponsors have considered non inferior success to be a 15 percentage point differential We feel encouraged as we head into the Inten Clinic the strength of the data from our three adult clinical studies including the higher immune responses relative to PCV20 the historical translation of adult to infant data and the precedent regulatory approval bar.

With each iteration of approved PCBs, there have been misses on the non inferiority bar for individual serotypes. Up to six This is in the case of PCV20.

In our case, we would be disappointed with this type of outcome. However, given this is a proof of concept dose finding study, the purpose of which is to determine the dose and the design of Phase three program, is reasonable to expect a few non inferiority misses. Even in this scenario, we would still expect Vax24 to be well positioned to advance to Phase three and demonstrate best in class potential particularly if we see higher immune responses across multiple serotypes as we saw in all of our adult While we await the data from our Vax24 infant study, we are also making significant progress on our Vax thirty one Phase two study in the same population. Following its initiation in December 2024, stage one of the study used the dose escalation approach to evaluate the safety and tolerability for low middle and high dose In early February, we advanced to Stage two based on the blinded safety assessment marking an important milestone in the study's progression. We anticipate announcing top line safety tolerability and immunogenicity data from the primary three dose immunization series by mid next year with top line booster dose data expected approximately nine months later.

Despite the effectiveness of current pneumococcal vaccines, IPD including meningitis and bacteremia, remains persistent in the first years of life. The public health community has made it clear that a broader spectrum pneumococcal vaccine is needed to provide expanded protections against this disease. Our PCB programs are designed to address this gap. And Vax thirty one has the [indiscernible] and ninety three percent of acute otitis media in children under five offering significantly greater coverage compared to the Outside of our PCB program, we remain focused on advancing our pipeline including Vaxay one for group A strep our most advanced Group A strep is a leading global cause of infectious disease related death and disability and a major driver of antibiotic prescriptions in young children. Underscoring the urgent need for a preventative solution. As vaccine one advances towards the clinic, we've continued to progress activities including analytical method development, immunological assays, and process scale up for the production of GMP grade drug substance and drug product. We will provide updates on our anticipated timeline as this program advance Across all of our programs, our commitment to vaccine innovation remains unwavering. With a strong foundation in place, are well positioned to drive our pipeline forward.

Achieving key clinical milestones and accelerate progress towards launch. Now turn it back to Grant to share closing remarks. Thanks, Jim.

Before moving to Q and A, I want to express my deep gratitude to our investors, [indiscernible] clinical trial participants, most importantly our employees. Your support dedication and belief in our mission continue to propel BackSight forward.

As we work to develop vaccines that address some of the most pressing unmet needs in bacterial diseases. With the strength of our science, the dedication of our team, and the momentum we've built we are well positioned to execute on our vision As we look ahead to the rest of the year, we do so with confidence and optimism. This will be a milestone rich year marked by key clinical and regulatory advancements, continued expansion of our manufacturing capabilities and the next steps in building a global platform for vaccine innovation. With a strong foundation in place, we are poised to drive BackSight's next phase of growth and ultimately bring lifesaving vaccines to those who need them most. We appreciate your interest and look forward to sharing further updates as the year progresses. With that, let's take some questions. Operator? [indiscernible] We will go to Roger Song with Jefferies.

Great. Thanks for the update and congrats for all the progress Thank you for taking our questions. A couple of questions from us. So the first one is regarding the Phase two Lax 24 infant primary series data readout. Can you just give us some color around what factor play into the timing of the data readout given you already finished the enrollment by 1Q last year? And then how should we think about how much safety data you will provide? And then all the immunogenicity data will be analyzed by the time by the end of 1Q this year. Thank you. Yes. Thanks for the question, Roger. [indiscernible] primary endpoint for the infant indication as you know, are actually split across two different co primary endpoints. The first after post dose three, the second after post dose four and those are all based on the IgG antibody responses. So this is a top line data readout and this is the standard accrual for the accumulation of those antibody responses. So that's the primary thing that we'll be focused on at this particular occasion. Jim, do you want to comment on the amount of the safety data you'll expect to have by the end of the quarter? [indiscernible] So we will cut safety data just prior to when we have all of the prerequisite immunogenicity data So that will include whatever we have at that point in time [indiscernible] my expectation is the vast majority of safety data from post primary all the way up to boost will be included There will be some post boost as well, but that won't be as robust as obviously post primary through And you had a second question, Roger?

Yes, if I may. And so for the I think on the call you say if you missed six serotypes on the main priority, we'll be disappointed. So that speaks to the confidence. Maybe just I think you mentioned something given the Phase two sample sizes smaller than the typical Phase three. How should we think about the non inferiority criteria? Maybe just give us a little bit clarity what we are really looking for. You mentioned 15 differential, how should we think about that is the bar for the lower bound confidence interval or what's the or it is the point estimate? Difference? Thank you. Yes. Thanks, Roger. Yes.

Prepared remarks, [indiscernible] for the most broad spectrum PCB to date, which would be the 20 balein. When they were comparing themselves to the prior standard of care, the 13 valent Vaxcyte, indeed they actually failed on six of those 13 well six of the 20 non inferiority comparisons and yet that was still enough [indiscernible] them to gain full approval and for them to gain the overwhelming market share. So when we look at the data that we've Phase two clinical studies with Fax24 and VAX-thirty one. We've shown such consistently higher average immune responses That was not the case for the 20 valent versus the 13 valent. Certainly in adults and even more so a widening of a gap with falling immune responses in infants. And so our view is that given the continuity of immune responses from adults to infants affords us the confidence to expect a better outcome. So we're comparing with the 24 valent vaccine So we'll see precisely what our immune responses are on a relative basis. But indeed, we would be surprised to the negative if we were to have seen as many misses as they saw. So we're expecting something more bullish.

We could imagine missing on a few. But on the other hand, if we did, we would expect perhaps at least that many with higher immune responses given how many we were better on in the adult setting. So that is one feature. But then to your point, the other thing in drug development for pneumococcal conjugate vaccines is the size of the study, particularly when you're doing your dose ranging. Is considerably smaller than the ultimate Phase III pivotal [indiscernible] Study that will need to be conducted. So the sponsors that have come before us and for us going forward, you have a right to take into account the smaller sample size And the way that's manifested itself in the past is even though the ultimate difference in the absolute rate of sero conversion needs to be within 10 points at Phase three In Phase two, given how much smaller the studies are, other sponsors before us have considered a 15 absolute difference as adequate as a predictor what it will take to hit the endpoint in Phase three. So we're going to take a similar approach knowing that we'll have that same opportunity to take advantage of the much larger sample size which clearly closes up confidence intervals in ways that can allow you to hit the 10 absolute difference.

So yes, two key features of how to think about this upcoming data. So Roger, thank you for raising both of those.

Thank you so much. Very quick last one. Given we are looking for this primary series data, How should we think about the read through from the primary series data to the boost which will be nine months later? Should we have higher confidence the booster will more likely going to hit if even if you have a few misses for the primary? Thank you. [indiscernible] [indiscernible] been trying to condition the market to appreciate that the two co primary endpoints are different, right? The first of which is a seroconversion comparison, whereas the second after the fourth dose, the booster is a comparison of the magnitude of immune responses. So as Everyone knows from our adult data we've shown a great ability to not only show non inferior magnitude of immune responses. But in fact, showing in most cases higher immune responses and in many cases statistically higher immune responses. So we've really thrived on that second comparison that we'll have later this year And while the sero conversion data will be the main event with this upcoming data readout, you should expect that we'll also present those IgG antibody comparisons which will give us an indication of how to expect the post dose four data to look [indiscernible] while it's not the headline, for the prior vaccines that are currently marketed, the 15 and the 20, they saw an even more pronounced [indiscernible] the magnitude of immune responses at this post dose three So if we reverse that trend as we did with adults, not only would it indicate that we've done quite well on the initial sero conversion, but it would also set us up for confidence heading into the next data point at the end of the year.

We'll move to our next question from Salim Syed with Mizuho.

Great. Thanks for all the color guys and congrats the progress.

Wanted to spend a little bit of time just focusing on the macro discussion, just kind of given this had such a heavy impact on the stock and the 4Q and 1Q.

Totally appreciate the commentary in the prepared remarks about the conversations being constructive with DC. But could you perhaps give us a little bit more granularity there if possible as it relates to whether there have been actually discussions with distinction to PCVs versus other vaccines how we should interpret this last ACIP meeting delay or any other particular granularities there? Thank you. [indiscernible] Yes. I think, Andrew, I can tag team this one. I'll start and then let Andrew jump in. But Just taking up that last topic and the ACIP delay. I mean, I think one of the things that was not widely reported was that as a matter of course for every ACIP meeting historically, there is an opportunity for public comment no one knows precisely why it happened. Think it was I think people believe it was inadvertent, but somehow in early February, that public commentary mechanism was not opened up. So that would have been atypical to not allow for that. So it could be as simple as that and that is what is precipitating that delay. I don't think people should [indiscernible] into that situation. There is a lot going on [indiscernible] Right in the thick of it.

Maybe you can take up the first two conversations. As it relates to PCB vaccines being implicated and just the macro [indiscernible] on this call know this is something we've been actively following actively engaged in as I noted in the prepared remarks. Yes, Celine, we aren't commenting commenting on the very specifics of the folks with whom we've had discussion, but as I said in the prepared remarks, don't not only are we active, but we've been encouraged by truly bipartisan support for the important role Vaxcyte play in public health in addition to obviously the health benefit, the significant economic benefit given the cost effectiveness of these vaccines. And as we've said, it is our view and continues to be our view that PCBs are the bedrock of our immunization programs, particularly in the infant population. And so we'll continue to monitor things continue to stay engaged, we'll continue to stay active But I do think there is broad understanding, as I said, the important role vaccines play and really no better testament to demonstrated benefit than that of PCVs over the last twenty five years for infants in the last fifteen in the adult population.

Okay, cool. And then maybe just to add on to that. Thanks for the color.

Is there anything in particular when you're having these discussions the folks in DC, is there anything particular that sort of comes to light that the market can potentially look at as sort of getting this market over the macro hump that sort of arisen in the past, several months. Is there anything particular that we should be looking looking for you think that the market is missing? Thank you.

Well, I guess I would say, we ourselves, we should all just Kind of take with caution the noise, if you will, and the news and there's a lot of it And there's been speculation and there's been talk. What I think is most important for us and all of us is What ultimately transpires here. And we're certainly doing our best to continue to advocate for the important role vaccines play. So let's I've just not to overreact to to noise or potential changes. Changes are par for the course. In general and certainly in connection with changes in administration. And it's the actions ultimately, if any, that will be the most important thing rather than kind of the words or these discussions about potential potential changes. So we're certainly watching it closely. But again, as I said, encouraged by what we have heard and hearing firsthand over the course of our discussions about the support on both sides of the aisle for vaccines.

We'll move next to David Risinger with Leerink Partners.

Hey, guys.

Yes, Brian on for Dave.

Thanks for the updates and we appreciate you taking our question. We have two if that's okay. So first, could you provide more color on the expected Phase three program for Vax-thirty one in adults?

Including the likely timeline from the initiation mid-twenty five to the top line results in 2026.

We're just trying to get a sense for approximately how many months you think it'll take after initiation that we might see top line results?

Yes, maybe I'll start there and Jim can certainly chime in. Just to remind the guidance that we again reaffirmed today that we would anticipate starting the the pivotal non inferiority study for Vax-thirty one in adults by middle of this year and to have the top line safety, tolerability and immunogenicity data from that study next year. That gives you some idea of timeline from initiation to data. If you look back at our MAX-twenty four study, which would be a good comparator that was twelve to fifteen months or so between the initiation of study and data readout. At this juncture, I have no reason why it would be any different for this study. And then that is one, of course, of a few studies that comprise the Phase III program in total. And as you saw today, we've just confirmed our pre existing guidance and just adding some more clarity to it. And we expect balance of the studies that comprise that Phase three program to start either also this year alongside or along with the nonaccruity study or next year, but those studies would read out in either 2026 or 2027. Those studies in general, Brian, tend to be on par or faster than non inferiority study, so give you a sense of kind of the expected timing those programs.

Okay. That's super helpful. I appreciate that. And then just one more on your preclinical group based strepact Could you explain why Vax Sight's technology is well suited to potentially succeed and how close might this be to IND enabling studies Yes. I can start on that one.

For bacterial vaccines, conjugate vaccines have really been the primary approach that's been effective. So just like we're leveraging with our pneumococcal conjugate vaccines, we have special technology that allows us to perform site specific conjugations polysaccharides that are found on the outer coat of the bacteria and then proteins to drive a memory response to prevent infection and preserve protection against bacteria over a durable period of time. So we're leveraging the same fundamental technology that has created broader spectrum class of pneumococcal conjugate vaccines, which is really what we've become known for.

Group A strep on the other hand is a vaccine [indiscernible] there has never been one developed To date, So there's a novelty feature to this, but it's also an area where there's very little to no competition. So we have an opportunity to be a first mover leveraging an approach that has been effective across a number of different bacterial vaccine targets We have a proprietary polysaccharide that is resident across the full spectrum of different strains of Group A strep. That's unique to us and we're able to site specifically conjugate it to a conserved protein on the surface of this bacteria that is accessible to antibodies to clear the bacteria. So we think we have two ways to win with this particular approach technologically. [indiscernible] market opportunity, we also have two ways to win to the extent this is a problem that afflicts not only infants and primary school children, but also older adults. And in fact, the magnitude of invasive disease afflicting adults by Group A strep, exceeds that of what was accessible for pneumococcal vaccines when they were approved for adults. So it's a really big opportunity for us We're really gratified to be in the lead in this area.

We have [indiscernible] further work that we've been doing to complete the Vaxcyte A1 program to get it in the clinic. We're stopping just short of when we're saying that clinical study will get underway. But rest assured we're getting closer and our excited and we'll keep everyone updated on our progress there. We'll move next to Umer Raffat with Evercore.

Can I ask 25 questions like Saleem also?

All right. 31, that's a good number. In all seriousness, three quick ones if I may. First, I realize you mentioned on the call that the non inferiority margin is 10% delta. I feel like that's the right delta for a registrational trial powered appropriately. You being too stringent with the choice of that delta knowing that Merck had used a more wider 15% delta to define non inferiority. That's number one.

Second, if I just step back and think about it very simplistically, most serotypes seroconversion rates are 80% to 90% on [indiscernible] is serotype three and 12F, which [indiscernible] zero conversion rates are more like 50%. Guess that's my question to you. Let's say you're non inferior, but you're 40% to your conversion. Is that a successful outcome to you?

And I ask because on those two serotypes three and twelve of at least In adults on IgG, not OPA, you guys were fairly ahead.

And last point, I realize the focus is entirely on post dose three, would you happen to have any post dose four data even if it's in 100 out of the 700 or eight hundred patients? Thank you very much.

Yes, you've got it exactly right. Umer. The 10% delta is the registration hurdle.

We are not trying to make things more difficult on us than we should. We We will look at that same 15 delta that Merck used when they developed Vaxcyte Avance as the hurdle that we should be looking at for all the right reasons. It's purely because of the wider confidence intervals when you've got a smaller cohort of subjects. So we're trying to not only acknowledge where we'll want to be I guess the point that people will have taken is even with our smaller Phase two studies in adults, we were able to meet the registrational non inferiority hurdle that's a luxury not a necessity. Point delta exceeded at this stage and that will guide us to what the sample needs to look like in Phase three to ensure that we could hit the 10 delta when it matters, which is that pivotal registration study to your point. Then as it relates to the second question, with Jim, do you want to talk about that? And Obviously, Umer is pointing out there were two big laggards for PREVINAR twenty twenty, but like how are you thinking about that? No, I think, Umer, as always, I think you're spot on, on your assessment.

If you've got greater than 90 conversion rate, that means that your GMCs are much higher than the level, the 0.35 level, whereas for SIR Type three, their GMC is almost the same as the 0.3 level. And so any slight miss on serotype three could have a greater impact on percent of individuals who achieved that protective [indiscernible] I do think that given our results in adults so far and with the results of serotype three being higher and there being translatability between adults and infants, I don't expect us to see that type of result, but if we do, we had said before, if we have a few misses, we feel that that's still a very good product we can move forward and get approved the Phase three trials.

And then to your last question, I think the thirty first question that you asked, The PD-three versus PD-four data We will wait and unblind all that PD-four data en masse. So while we could theoretically look at some cases by the time we got the PD-three that would not make good clinical quality sense. So we'll wait until we get critical mass on that. That's what we'll be able to read out later this year. We'll not be cherry picked.

We will move back to Seamus Fernandez with Guggenheim.

Hey, guys. Thanks for the question. So just a couple of quick The first question is, the opportunity or if it makes sense at all to consider the possibility of 31 potentially advancing directly to Peds should depending on obviously the 24 data, and 31 data is there an opportunity to kind of assess moving that 31 forward Or is there a compelling reason to move both twenty four and thirty one forward given differences the sort of international dosing decisions, what would be the decision points that you would be looking at that would be most critical to making that decision? And then then the second question is really around this discussion and debate over efficacy studies It seems a bit ridiculous and quite redundant in the pneumococcal space, an efficacy study that the team could conduct the pediatric setting post approval that could be quite compelling, which is an Otitis media opportunity. Hoping you could just kind of put some context around that and what you see as the opportunity for potentially Vaxcyte perhaps securing an Otitis Media claim and what that study might look like? So much. Last year, in association with the strength of the Vax-thirty one data to make it obvious.

To graduate from Vax-twenty four to Vax-thirty one as our singular approach for adults. But in that case, we didn't really have a time delta between the two programs based on how things lined up from a product availability perspective. So that was a very straightforward choice. Here we are on the verge of receiving our first pediatric data with Vax24 as we've declared, we've not waited to get Vax 31 into the clinic in infants. So we have two trains that have left the station the one is going to get to the next station before the other. We'll have a period of time where we'll be managing what would be the most broad spectrum vaccine available to the market at the fastest pace which would be VAX24, which of course here in The U. S. The principal competitor would be the 20 valent from Pfizer. But as you point out, in Europe, the twenty valent was not able to meet the European schedule of the two plus one approach versus The U. S. Schedule where they give an extra vaccination. So the competition in Europe is really the 15 valent. So we do have a winner in our mind, for which the data is reading out here shortly, But of course, the Vax-thirty one data as we've guided we're expecting to get that data by the middle of next year.

So it is not far behind VAX-twenty four. So once we receive that VAX-twenty four data, we'll be able to better handicap how much headroom there was for 31 valent to be effective. Recall in this 24 valent study, we do have that mixed dose cohort which gives us a leading indication of how much the incremental protein carrier will affect immune responses For the studies today, we haven't seen much of an effect of the incremental protein carrier, at least not nearly to the extent the previous technologies have faced. So yes, we're going to have Hopefully, A decision to make. I think we're going to be in a good position with either Vaxcyte but arguably an even stronger position to the extent the Act 31 data is positive, but we'll be taking all those things into consideration, Seamus, as we have that data readout over the [indiscernible] twelve to fifteen months. Your question about efficacy studies, I think you were kind of hinting at some of the macro backdrop of what's going on. There's no question that pneumococcal conjugate vaccines Vaxcyte been studied with the utmost integrity clarity, with placebo controlled studies, certainly at their outset when they were developed initially in infants.

So there is absolutely no question of the clear and present danger pneumococcal bacteria and the effect of these vaccines that prevent ninety percent to ninety five percent of infections. So I think the way you kind of phrased it was, is there an opportunity there for us to distinguish ourselves with an efficacy study that's manageable. And I think Jim has something in mind as potentiality.

Yes. No, I'd say up to eighty percent of infants get a case of OTIS media almost fifty percent get multiple cases. So this is a very common ubiquitous type of manifestation and the majority of causes The main driver is strep pneumonia. Now for the current PCV20, they prevent roughly 30s to high to low 40s percentile in terms of overall serotype coverage, but with R31, we are in the mid-80s to low 90s. And so we think that even with a comparative we will have enough cases with that type of incident in that improvement in coverage to be able to do a study of otitis media and actually determine the efficacy. As you said, it's going to take longer than immunogenicity study and safety. So most likely, we would see that come in after the approval. But we do plan on exploring the possibility of doing an efficacy study with otitis media. For our thirty one valent. We'll go next to Jason Gerberry with Bank of America. Hi, good afternoon. This is Dina on for Jason. Congrats on all the progress this year and thank you for taking our questions. We just had a couple on the VAX24 infant study.

First, we would like to get your view on if and or how this initial primary dose series data set will provide read across to derisking Fax 31 the infant population. And can you just remind us if you have the ability to tweak X-twenty four doses in certain serotypes depending on what seen in the Phase two and if that would be a consideration for Phase three dose selection?

And then we should have a quick follow-up on the regulatory front. What specific measures would RFK have to take in order to actually change the PCV routine child vaccination schedule I guess said in a different way, what are kind of the hurdles that he would have to overcome and does he have the sole power Thanks so much.

Yes. Thanks, Dina. So as it relates to the VAX-twenty four infant data, reading across the VAX-thirty one, Yes, to be sure, I mean, just like we saw in adults, we were able to in particular the dose ascension from the low middle to the mixed and that mix dose cohort was able to take a look at a similar amount of the protein carrier that is in our Vaxcyte thirty one formulation and was Definitely a leading indicator of what we thought we could expect the VAX-thirty one data when it read out in adults and of course It was even better than we could have predicted from that mixed dose data. So I think that we will have a similar opportunity with this infant data to use it as a bellwether for how to think about the Vax-thirty one data when it does read out.

So of course, what we found was with that incremental protein carrier, we really didn't see a fall off in the magnitude of immune responses when compared to Prevnar20. So if the VAX24 data is good, I think it will definitely only triangulate our confidence that came from the adult data for Vax-thirty one. To your question about [indiscernible] the doses of individual serotypes most definitely that will be afforded to us We have seen a really nice consistent pattern of dose response across all three of the the Phase two studies that we've run. And there's a wide berth that's afforded based on the toxicology studies that are conducted and so indeed, we will reserve the right to potentially tweak certain doses if we see [indiscernible] should and could be improved And then your third question would be related to potential changes to the immunization schedule for pneumococcal conjugate vaccines. I think it's really hard to predict what might happen. There's been no discussion of pneumococcal conjugate vaccines To date, in any forum So I don't think there's anything to go on to make us think that there would ever be an effort to reduce the schedule associated with pneumococcal conjugate vaccines.

This is not some distant memory of a pathogen. This is a pathogen that is routinely circulating and inhabiting the upper respiratory tract of a substantial portion of our population. And the moment you pull back a dose or pull back rates of immunization with pneumococcal conjugate Vaxcyte, more kids and more adults will get sick and more adults and more infants will die There's no question of that. So, I don't think there's really a thesis to suggest that there would be a path [indiscernible] an impetus to do something like that.

And maybe just add to Grant's comments. I mean, the of infants, 15 years of adults, the health and benefits are very clear, right? The current system is incredibly complex Israeli institution involving multiple, multiple stakeholders And Ira also maybe saying, perhaps just Liam's earlier question, refer us all to the comments that Senator Cassidy made in connection with his decision to support the nomination of of RFK Jr. To the Senate speaking directly to a number of commitments that he obtained from both Kennedy and the administration, including kind of maintain one of the important bodies in terms of the recommendation of immunization schedules. Among other commitments kind of all geared toward kind of the status quo as it exists with respect to vaccination. And there are other bodies as well at the AAP American Academy of Pediatrics that itself put out a statement a while back as an important role the immunization of our infants as well.

We'll move to Tom Schrider with BTIG.

Good afternoon. Thank you for answering so many of my questions. With all the noise about ASEP, I wanted to squeeze in one more about current medical practice.

Adults with risk factors have gotten PCVs at 50 for a while now.

Is it standard practice to boost them at 65? And I guess really the question is, if everyone is getting them at 50 now, is it kind of the expectation they'll get boosted at 65 or do you really need a SIP to to hardwire that? And then if you have any thoughts of whether insurance will pay for that second shot, it'd be great as well.

Thank you. Yes. Hey, John, Thank you for the question. Maybe Jim and I can tag team this one. I mean, going back Prior to the pneumococcal conjugate vaccines being approved in adults fifteen years ago, and only up until recently Was there a two vaccine schedule. So fifteen years ago, there was only the polysaccharide only vaccine and then Prevnar13 got approved. And until PREVINR twenty was approved, Pneumovax was also recommended on top of the pneumococcal conjugate vaccine. And in the case of the polysaccharide only vaccine, that was administered by recommendation every five years. So multiple Vaxcyte doses have been a consistent feature of the adult vaccination range.

At the last ACIP meeting, there was quite a bit of discussion around how long should you wait for a second vaccination once we start giving the routine universal vaccination at age 50, to your point, Tom, people with certain health conditions have been getting vaccinated in that range for some time. And there was a real recognition that another vaccination dose should come in when they turn 65. But there was reticence on the part of the ACIP to go there just yet. What they were really looking for was the newer higher valent vaccines to come out. And then those could be the second vaccination when people turn 65. And it was gratifying to see that we were the vaccines that they were referencing both VAX-twenty four and VAX-thirty one. So yes, I think that is where the future is headed. It hasn't been codified. But to your point, if an individual goes in and they're within the right age range, it's likely that they'll get the vaccine if they ask for it. I mean, that's just kind of how we're conditioned. And haven't been any controls on reimbursement multiple doses to date that I have seen.

And these vaccines have such a great return on investment every dollar you spend on vaccines return depending on the class $7 to $11 in savings to the healthcare system And that's why given their safety profile given the efficiency when people go in and ask their pharmacist for a Vaxcyte, more often than not, they'll get it. That they had gotten to one previously in their history. So yes, I think you're kind of setting things up. Not everything has been totally solidified. But the ground is fertile for what should be the case, which is people getting multiple vaccinations over the course of their lives. Particularly as their immune systems begin to wane as they get into their 60s and 70s.

We'll move to our final question from Joseph Stringer with Needham and Company.

Hi, thanks for taking our questions. Do you assume the eventual approval of either Vax24 or Vax31. What's your current thinking on the likelihood that ASIC would not grant preferred recommendation I realize this would sort of go against precedent, but you give your updated thoughts on the puts and takes on this hypothetical scenario and has your outlook on this changed at all with the new administration? Yes. Hey, Joey. Thanks for the question. I mean, we've got BASS 31 will be first up.

As we look ahead, we've got to obviously complete the Phase three studies. But the strength of the treatment effect in Phase two, we're extremely confident heading into the Phase three experiment Once we have that package together and BLA together, etcetera, etcetera. But looking ahead to a a potential ACIP review, we have a product has the makings of the most compelling profile that they would have reviewed to date and even the last occasion where an adult pneumococcal conjugate vaccine was debated, I think there were expectations that that profile could have warranted a preferred recommendation, but for the fact that while it had improved coverage, it did not cover historically circulating strains, some of which were actively circulating in the moment. And so for us, we have a product profile, at least based on what we've seen [indiscernible] [indiscernible] higher coverage than that particular vaccine while covering the historically circulating strains [indiscernible] improving immune responses to boot, which are multiple advantages relative to what anyone else has ever seen. And we have seen preferred recommendations granted in the adult setting. And it gives us the kind of confidence that it's certainly something that we can plan for It's not a guarantee but something that we can plan for.

In the infant setting, the last conversation was when PREVINR20 was approved and debated And really the coverage there based on the dialogue they had, was enough to warrant a preferred recommendation, but they explicitly did not [indiscernible] the preferred recommendation because of the diminished immune responses that were evident, which is the reason why as we think about our trend moving forward, it gives us a lot of confidence that back '24 which is ahead truly does have a differentiated superior profile in that if we can see anything similar to the adult results where we're not only conferring broader coverage with additional conjugates, but also potentially higher immune responses that would have been precisely what they were looking for they last considered a preferred recommendation. And then I think as it relates to what will happen in the future, we're a ways away from that ACIP conversation, that ACIP composition etcetera. So I think it's premature to suggest anything other than the basis for which these decisions have been made historically which is based on the merits of the vaccine for which they're considering relative to the vaccines that are the standard of care up to that point and to what extent the newer vaccine can provide better protection and better return on investment for this country.

Ladies and gentlemen, that will conclude today's question and answer period. And also concludes today's BackSight Fourth Quarter and Full Year twenty twenty earnings call,