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Edited Transcript of CVAC.OQ earnings conference call or presentation 16-Nov-22 2:00pm GMT

Q3 2022 CureVac NV Earnings Call Dec 2, 2022 (Thomson StreetEvents) -- Edited Transcript of CureVac NV earnings conference call or presentation Wednesday, November 16, 2022 at 2:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Franz-Werner Haas CureVac N.V. - CEO, Member of Management Board & MD * Pierre Kemula CureVac N.V. - MD, CFO & Member of Management Board * Ronald Plasterk CureVac N.V. - SVP of Science & Innovation * Sarah Fakih CureVac N.V. - VP Corporate Communications & IR * Ulrike Gnad-Vogt CureVac N.V. - Interim Chief Development Officer, Senior VP & Area Head of Oncology and Member of Executive Board ================================================================================ Conference Call Participants ================================================================================ * Boran Wang Guggenheim Securities, LLC, Research Division - Associate * Douglas Royal Buchanan JMP Securities LLC, Research Division - Director & Equity Research Analyst * Geoffrey Christopher Meacham BofA Securities, Research Division - Research Analyst * Jonathan Miller Evercore ISI Institutional Equities, Research Division - VP * Luísa Morgado * Zhiqiang Shu Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Greetings, and welcome to CureVac Third Quarter and First 9 Months 2022 Financial Results and Business Update. (Operator Instructions) 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, CureVac N.V. - VP Corporate Communications & IR [2] -------------------------------------------------------------------------------- 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 and 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 website. 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. 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, CureVac N.V. - CEO, Member of Management Board & MD [3] -------------------------------------------------------------------------------- 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 3 core competencies: broad technology platform, robust product development pipeline and large GMP manufacturing capacities. Let me give you a short overview of 4 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 4 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 road map. 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 are -- we also presented data from the Phase I expansion study of our non-coding RNA, CV8102, at the meeting of the Society for Immunotherapy of Cancer, SITC, earlier this month. CV8102 demonstrated a solid safety profile and preliminary efficacy in heavily pretreated patients with advanced melanoma. In addition to those 4 developments, we closed the third quarter of 2022 with a solid cash position of EUR 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 3 therapeutic areas of prophylactic vaccines, oncology and molecular therapy, addressing diseases with high unmet medical need. Our most advanced area of prophylactic vaccines is driven by the technological advances of our versatile second-generation mRNA backbone. This backbone broadly spans 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 4 Phase I clinical trials in COVID-19 and flu that we are conducting together with GSK. The clinical insights we expect to gain from these 4 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 candidate CV8102 is currently being assessed in a Phase I 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 the SITC. 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 4 key Phase I 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 candidates include CVO501, 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 4 candidates are being tested in a 1-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 candidates 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 you -- to Ulrike, to walk you through our recent updates and progress in this area. -------------------------------------------------------------------------------- Ulrike Gnad-Vogt, CureVac N.V. - Interim Chief Development Officer, Senior VP & Area Head of Oncology and Member of Executive Board [4] -------------------------------------------------------------------------------- Thank you, Franz. Before we dive into the details, I would like to briefly draw your attention to our previously reported 3-pillar strategy in oncology. These pillars illustrate the road map 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 materials 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 as is covered by the strategic pillar on the left. I will come back to the 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 3 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 front end 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, CureVac N.V. - SVP of Science & Innovation [5] -------------------------------------------------------------------------------- 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 3 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 have 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 neoantigen 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 2 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 obtain 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, became 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 rearrangement is still staggering. Overall, there can be hundreds of such rearrangements in a common lung cancer sample. What does this difference between both data sets 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 express protein only features single new amino acids. Current personalized cancer vaccines applying this approach cover at max around 30 of such point mutations. 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 the tumor and not in healthy tissue. We call the entirety of these frames a Framome. You can see the Framome of the lung cancer sample on the right. Every line here represents an uncoated 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 ranges with the same cancer or even across different cancer types. What you can see here are the frames of 2 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, thus, the potential to develop cancer vaccine candidates that could be applicable to a larger group of patients. That's why we are following 2 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 road map. Ulrike? -------------------------------------------------------------------------------- Ulrike Gnad-Vogt, CureVac N.V. - Interim Chief Development Officer, Senior VP & Area Head of Oncology and Member of Executive Board [6] -------------------------------------------------------------------------------- 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 3 strategic pillars highlights the validation of our second-generation mRNA 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 2 Phase I 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 including 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 neoantigens 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 a 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 2 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 2 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 1/4 or even 1/3 of all triple negative breast cancer patients. Due to the prevalence of these shared antigens, chances are high that out of these 4 shared antigens, at least 2 will turn out to match a patient-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 they 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-I. 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 I study consisting of 2 parts that assesses CV8102 as a single agent and in combination with anti-PD-1 antibodies. The dose escalation part 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 a partial response according to RECIST. 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 treated with anti-CTLA-4 antibodies. Additional immune profiling data from the Phase I 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 based on RNA sequencing from all 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 I 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 I expansion study further demonstrates the previously reported robust safety profile and strong ability to mobilize the immune system against injected as well as non-injected tumors. In the context of our strategic focus on the development of mRNA-based cancer vaccine candidates that target tumor-specific antigens, the clinically validated immunomodulatory characteristics of CV8102 represent 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 immunomodulatory adjunct to a defined mRNA cancer vaccine candidate. With this, let me hand back the call to Franz. -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [7] -------------------------------------------------------------------------------- Thank you, Ulrike. To round up the components of our oncology road map on Slide 16 and 17, let me briefly address the 2 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 pack 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. Bio distribution 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 the 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 an interferon gamma ELISpot assay. An important advantage of the new LNP program addresses the code 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 tried 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, CureVac N.V. - MD, CFO & Member of Management Board [8] -------------------------------------------------------------------------------- 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 9 months of 2022 with a strong cash position of EUR 540.9 million. Financial statements for the first 9 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 RNA material and settling CMO contracts as part of the wind-down activities for CVnCoV vaccine program and to capital expenditures for our new production facility. Moving on to our profit and loss statement. Revenues decreased by EUR 18.1 million to EUR 11.2 million for the third quarter of 2022 and decreased by EUR 6.1 million to EUR 55.7 million for the first 9 months of 2022 compared to the same period in 2021. The decrease for the first 9-month period was based on a higher 2021 revenues due to the termination of the Boehringer Ingelheim collaboration and its subsequent recognition of EUR 10 million for the first 9 months ending September 2021. Revenues for our 2 GSK collaboration increased year-on-year and amounted to a total of EUR 52.7 million for the first 9 months of 2022, compared to EUR 49.6 million the previous year. Operating loss was EUR 52.4 million for the third quarter of 2022, representing a EUR 90.7 million decrease compared to the third quarter of 2021. For the first 9 months ended September 30, 2022, operating loss decreased by EUR 278.8 million to a total of EUR 127.9 million year-over-year. The operating result was affected by several key drivers. Cost of sales decreased primarily due to lower expenses for CMO services. Prior year end 2021 was highly impacted by significant expenses for the setup of a 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 reserve production capacity at the CMO. R&D expenses decreased primarily due to significantly lower development expenses related to the completion of the large Phase IIb/III clinical trial for CVnCoV. In line with the declining number of continuing study participants in 2022 and renegotiation of existing contracts in the first 9 months of 2022, our remaining clinical trial cost estimate decreased, resulting in the reversal of EUR 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 EUR 32.5 million from GSK for reimbursement of prepayment and production activity set up at a 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 EUR 5.1 million to EUR 4.7 million for the third quarter of 2022 and about EUR 8.7 million to EUR 7.5 million for the first 9 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. Pretax losses were EUR 47.7 million in the third quarter and EUR 120.4 million for the first 9 months of 2022. With this, I would like to hand back to Franz for today's key takeaways. -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [9] -------------------------------------------------------------------------------- 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 3 core competencies including technology, product development and manufacturing. We have expanded our clinical development pipeline by a total of 4 clinical trials in prophylactic vaccines this year in COVID-19 and influenza together with GSK. All 4 trials are on track and provide meaningful data with a goal to select the best performing candidates early next year and advanced 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 2 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. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question comes from Geoff Meacham with Bank of America. -------------------------------------------------------------------------------- Geoffrey Christopher Meacham, BofA Securities, Research Division - Research Analyst [2] -------------------------------------------------------------------------------- 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 market opportunity there? -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [3] -------------------------------------------------------------------------------- Thank you, Geoff. With regard to the rabies, certainly, our core efforts were with our -- together with our partner, GSK, looking into, first of all, making a difference to the pandemic, which is not over yet. Therefore, the effort 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. Still, 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 [4] -------------------------------------------------------------------------------- Our next question comes from Evan Wang with Guggenheim. -------------------------------------------------------------------------------- Boran Wang, Guggenheim Securities, LLC, Research Division - Associate [5] -------------------------------------------------------------------------------- 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 between the modified and unmodified, how exactly will that decision be made? Any color there would be helpful. -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [6] -------------------------------------------------------------------------------- Thank you, Evan. It is a bit too early now to say how we are going to present on the stage. First, we want to see the data, the readout. But you can be assured that this is a core of the discussion we are having at the moment with GSK together in order to find exactly where you're finger-pointing on, what is the difference between modification, non-modified RNA construct in two sense. The one is really what is the first-generation backbone versus the second-generation backbone, whereas a 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 our mutual -- with our partner, GSK, on our mutual projects we are running here. So therefore, unfortunately, it's a bit too early to talk about exactly this. -------------------------------------------------------------------------------- Boran Wang, Guggenheim Securities, LLC, Research Division - Associate [7] -------------------------------------------------------------------------------- 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, the number of patients? Whether we will see humoral and T cell response? And then as a follow up, in terms of later stage development for influenza or COVID, is there -- 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? -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [8] -------------------------------------------------------------------------------- Yes. Thank you. Yes. So the expectation, and this is what we try to put in the presentation there as well. The readouts, what we want to see is certainly chemical-modified versus non-chemical modified, as we try to explain that the second-generation backbone is playing a role on our technology level than 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 in 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 then certainly, of course, is our 3 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 are 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. -------------------------------------------------------------------------------- Operator [9] -------------------------------------------------------------------------------- (Operator Instructions) Our next question comes from Jonathan Miller with Evercore. -------------------------------------------------------------------------------- Jonathan Miller, Evercore ISI Institutional Equities, Research Division - VP [10] -------------------------------------------------------------------------------- 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 time line to visibility on those lawsuits in German courts? And any plans you have to pursue similar suits in other jurisdictions? -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [11] -------------------------------------------------------------------------------- So thank you for the questions. 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 a goal, what is the next step for a 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 the full picture. On the IP time lines, well, the process as we are 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 just can say that the process has been started. It's following the normal rules of the process, and we are waiting for first since from the court and follow the process from here. Definitely nothing in this year, this is as much as I can say now. -------------------------------------------------------------------------------- Jonathan Miller, Evercore ISI Institutional Equities, Research Division - VP [12] -------------------------------------------------------------------------------- Okay. Fair enough. And then maybe, I guess, on the onco vaccines, could you guys go into a little bit more detail about the usage of non-coding areas for antigen identification? How frequently deploymentations in non-coding regions result in expressed antigen that's targetable in a vaccine context? -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [13] -------------------------------------------------------------------------------- Yes. Thank you very much for that question. We've done the numbers for a couple of -- 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 a non-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 you look at that in cells that we've studied. Both cells taken from tumor cells was also cell lines and cells taken from mice as well, so it's about 1 in 10 cases where that actually results in such expressed sequence. -------------------------------------------------------------------------------- Jonathan Miller, Evercore ISI Institutional Equities, Research Division - VP [14] -------------------------------------------------------------------------------- For this chromosomal rearrangements, not -- obviously not just point mutations in non-coding regions? -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [15] -------------------------------------------------------------------------------- That's right. I would say that a point mutation in the 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 the -- 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, Evercore ISI Institutional Equities, Research Division - VP [16] -------------------------------------------------------------------------------- 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 cells in the tumor? -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [17] -------------------------------------------------------------------------------- Yes, those are 2 different questions. Well, 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 in point mutants because brain cells are very much protected from the environment, but 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 sequence the tumor, let's say, 100x deep. So every site in the genome is sequenced 100x. 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 in 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 [18] -------------------------------------------------------------------------------- Our next question comes from Roy Buchanan with JMP Securities. -------------------------------------------------------------------------------- Douglas Royal Buchanan, JMP Securities LLC, Research Division - Director & Equity Research Analyst [19] -------------------------------------------------------------------------------- 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 IV 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? -------------------------------------------------------------------------------- Pierre Kemula, CureVac N.V. - MD, CFO & Member of Management Board [20] -------------------------------------------------------------------------------- Roy, 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 a Printer or GMP IV. 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? So -- and at the same time, make sure that we continue to fuel the strengthening of the platform. And I think we went through a long stride in the presentation to try and give you a sense of what we were doing. And on GMP IV, 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 a fee -- a yearly fee from the German government, right? So we would have to make sure that the plant is ready to go and fully, I would say, resourced, but then all that is more than paid for by the German government. Yes. So there was a question on the -- do we discuss with the FDA on Printer and this is maybe, Ulrike, you can take that one? -------------------------------------------------------------------------------- Ulrike Gnad-Vogt, CureVac N.V. - Interim Chief Development Officer, Senior VP & Area Head of Oncology and Member of Executive Board [21] -------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- Douglas Royal Buchanan, JMP Securities LLC, Research Division - Director & Equity Research Analyst [22] -------------------------------------------------------------------------------- Okay. Great. And then maybe a follow up, the 2 cancer Phase I 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. -------------------------------------------------------------------------------- Ulrike Gnad-Vogt, CureVac N.V. - Interim Chief Development Officer, Senior VP & Area Head of Oncology and Member of Executive Board [23] -------------------------------------------------------------------------------- Yes. Actually -- I mean 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 they will be injected intramuscularly. -------------------------------------------------------------------------------- Operator [24] -------------------------------------------------------------------------------- Our next question comes from Zhiqiang Shu with Berenberg. -------------------------------------------------------------------------------- Zhiqiang Shu, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [25] -------------------------------------------------------------------------------- I have 2 questions. First, on the cancer vaccine pipeline you outlined today, I wonder for the 2 proof of concept -- 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's a tough cancer to crack. Any color there would be great. -------------------------------------------------------------------------------- Ulrike Gnad-Vogt, CureVac N.V. - Interim Chief Development Officer, Senior VP & Area Head of Oncology and Member of Executive Board [26] -------------------------------------------------------------------------------- Yes. So thank you for that question. So indeed, this is a tough cancer, but also an indication with very high unmet need 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 the 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 well as the test elaborated and also look for potential to apply combination treatment with potentially synergistic agents to overcome the immunosuppressive microenvironment. -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [27] -------------------------------------------------------------------------------- Perhaps also on top to say that with the technological advancements we have 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, CureVac N.V. - Interim Chief Development Officer, Senior VP & Area Head of Oncology and Member of Executive Board [28] -------------------------------------------------------------------------------- Exactly. -------------------------------------------------------------------------------- Zhiqiang Shu, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [29] -------------------------------------------------------------------------------- Got it. And then second question on your proprietary non-pegylated LNP, I guess just looking at the data you released on Page 16, looks like the humoral activity is higher -- neutralizing antibody titers are higher. Does that mean the protein expression from the mRNA is higher based on your new LNP formulation? -------------------------------------------------------------------------------- Ulrike Gnad-Vogt, CureVac N.V. - Interim Chief Development Officer, Senior VP & Area Head of Oncology and Member of Executive Board [30] -------------------------------------------------------------------------------- Sorry, could you repeat the question? You were breaking up there for a minute. -------------------------------------------------------------------------------- Zhiqiang Shu, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [31] -------------------------------------------------------------------------------- Sure. Sorry. On Slide 16, the -- some of the data on non-pegylated LNP formulation, and I think you showed, just looking at 3 panels, you showed the neutralizing antibody titers are higher based on your new technology. I wonder does that mean that the mRNA protein expression is higher using your new formulation? -------------------------------------------------------------------------------- Ulrike Gnad-Vogt, CureVac N.V. - Interim Chief Development Officer, Senior VP & Area Head of Oncology and Member of Executive Board [32] -------------------------------------------------------------------------------- Exactly. I mean 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 -- I mean 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, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [33] -------------------------------------------------------------------------------- I guess, do you envision this to be used in the cancer vaccine platform or more on the infectious disease franchise? -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [34] -------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- Operator [35] -------------------------------------------------------------------------------- Our next question comes from Luísa Morgado with Kempen. -------------------------------------------------------------------------------- Luísa Morgado, [36] -------------------------------------------------------------------------------- I just have one. For the cancer vaccines, what do you predict will be the ratio for the off-shelf or personalized cancer vaccine? -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [37] -------------------------------------------------------------------------------- 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 for which one will be applicable and patient groups for which the other one will be, let's say, required because buying off the shelf, you cannot reach enough and there, I think, space for both. Does that answer your question? -------------------------------------------------------------------------------- Luísa Morgado, [38] -------------------------------------------------------------------------------- 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, CureVac N.V. - CEO, Member of Management Board & MD [39] -------------------------------------------------------------------------------- It's early to tell -- 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, then, of course, scalability is favorable. But if it's required for efficacy, then one needs to go fully personalized and time will tell. -------------------------------------------------------------------------------- Operator [40] -------------------------------------------------------------------------------- We have a follow up from Roy Buchanan with JMP. -------------------------------------------------------------------------------- Douglas Royal Buchanan, JMP Securities LLC, Research Division - Director & Equity Research Analyst [41] -------------------------------------------------------------------------------- I 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, CureVac N.V. - CEO, Member of Management Board & MD [42] -------------------------------------------------------------------------------- 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 is a certain sequence of events on the recruitment. This is exactly what is -- what will decide on the time lines here. And as it is not completed yet, it's very hard to say. -------------------------------------------------------------------------------- Douglas Royal Buchanan, JMP Securities LLC, Research Division - Director & Equity Research Analyst [43] -------------------------------------------------------------------------------- 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? -------------------------------------------------------------------------------- Franz-Werner Haas, CureVac N.V. - CEO, Member of Management Board & MD [44] -------------------------------------------------------------------------------- You are asking about the workflow in Slide 18. So -- yes, so the timing there is that the sample is taken and within 2 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 6 to 8 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 make -- should play a role that then you've got everything at the same spot. And then in these small scales, the fill and finish should not be a limiting factor here either. -------------------------------------------------------------------------------- Operator [45] -------------------------------------------------------------------------------- At this time, I would like to turn the call back over to management for closing comments. -------------------------------------------------------------------------------- Sarah Fakih, CureVac N.V. - VP Corporate Communications & IR [46] -------------------------------------------------------------------------------- With this, we would like to conclude this conference call. Thank you very much for your participation. Stay safe, and please don't hesitate to contact us should you have any further questions. Thank you, and goodbye. -------------------------------------------------------------------------------- Operator [47] -------------------------------------------------------------------------------- This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.