Joining me now with more is the CEO of Moderna, Stephane Bancel, joining me right now. Stephane, welcome. Thanks so much for joining us this morning.
Good morning, Maria. It's good to see you. Thank you for having me.
I want to talk about this great success that you have had with Merck and your scientists have reported real breakthroughs with regard to cancer and your phase trials this year and at the end of last year. What can you tell us, Stephane?
Yes. So we're indeed very excited. We've been working on this for almost 10 years now. So it's a lot of investment in innovation. With Merck, it's basically an individualized treatment for cancer. So the data we shared is about skin cancer, melanoma, which as you know a lot of people die from every year and other people are diagnosed with. And what is really unique about this drug called mRNA-4157 is that it's individualized. Meaning if you and I were diagnosed the same day by the same doctor with skin cancer, Moderna will make a different medicine for your cancer and the medicine for my cancer. And that would be done in around 30 days. And as you said, the results are really exciting. If you look at the study, it was a phase two study, 157 people. It was randomized. So it was a real study. And what is really interesting is we saw a recurrence-free survival, meaning people not dying from their disease or getting the disease coming back. At five years, we saw 50% improvement versus people getting Keytruda, Merck's blockbuster medicine which has saved so many lives. And so as you see, this is very meaningful for patients and we are very excited because this year we should get the phase three study result for that medicine and hopefully if it's positive we should be able to file very quickly with the FDA to get this to American people to save them with their disease. So, we're very excited.
Well, this is very exciting for sure. So, Stephane, when Moderna is working with Merck's cancer vaccine, of course, Keytruda, it actually reduced the melanoma relapse and the death risk by, as you just said, 49% when combined with Keytruda. And this is five-year data from phase 2B trials, right? And what other impact in terms of cancers have you been able to identify? What other types of cancer?
Yes, Maria. So, we are right now with nine different studies ongoing with Merck across the world in lung cancer, in kidney cancer, in bladder cancer. We also have some early studies with this technology on gastric cancer, also pancreas cancer. So we're just trying to go and explore what this technology can do to help people. We believe in a mechanism of action. By individualizing the treatment, we're able to target your immune system to go and to basically direct it to your cancer in a more precise way. What is so very interesting is that the safety profile is really quite interesting. There's no additional safety risk or side effect from the treatment versus what we're seeing with Keytruda alone. So you see a huge benefit for the patients and the families with no downside of side effects. So that's why it's also so exciting.
That is incredible. Well, we will be following that closely and I want to congratulate your scientists for that. Stephane, at the last analyst meeting when you spoke with Wall Street analysts, you talked about 2027 being a key growth year for the company driven by the potential to capture a slice of that $1.75 billion respiratory virus vaccine market in the European Union. You also talked about growth from long-term partnerships in Latin America. I want to get your take on the vaccine and the core vaccine business which of course is critical at Moderna because the Trump administration is issuing new guidance on vaccinations for Americans. Here now is Health and Human Services Secretary RFK Jr. on the new vaccine guidance. Watch this.
Today, a compliant child must take between 69 and 92 vaccines to stay in school in some states, and not one of them has been safety tested in a pre-licensing placebo control trial. And that is just malpractice. So, the people who were in charge of that are now gone. And we're going to be bringing people onto the ACIP panel, not anti-vaxxers. We're bringing people on who are credentialed scientists, who are highly credentialed physicians, who are going to do evidence-based medicine, who are going to be objective, and who are going to follow the science and make critical public health determinations for our children based upon the best science.
Stephane, what is your reaction and how is this changing your investment strategy in the vaccine business?
Sure. So, as you know, Maria, we are a science-based company and we always look at the data and the facts to be able to protect people and we look, of course, at efficacy of our product and safety and we take safety very, very seriously. In the case of Moderna, we have now three products approved by the FDA that actually some of them got approved just last year under this new administration. And if you look at the data, the data of Spikevax was done with placebo control. This was how the vaccine was tested. As you know, the safety database has been very extensive because this vaccine has been one of the most used vaccines in the world. So we continue to work with health regulators around the world to figure out the best path forward to focus on people at high risk because as you know the FDA has issued guidance around COVID last spring focusing on people at high risk that have co-morbidity factor or because of age or because of both they're older and they have a co-morbidity factor and those are the people that benefit the most and we are exactly going into that direction.
What are you expecting in terms of the COVID vaccine? Obviously, it's not as important or not as impactful to the company at this point and analysts are expecting a decline in sales. What can you tell us about that?
Sure. So, as you know, the company has worked really hard in 2020, 21, 22 to be able to provide vaccines to get us out of the pandemic. Over the last few years, we basically right-sized the company to adapt to the fact that of course we always knew there was going to be much less use of a vaccine as you go into an endemic setting. It's really focusing on people at high risk now. And so this has happened and now what is exciting for us is the momentum we are seeing in 2026 and then into 2027. The momentum is about basically growing again. We're growing again because we have partnerships around the world including in some countries where we have long-term partnerships and also we are launching new products. All the investment we made in science allows us to launch new products. We've launched now three products that are approved by regulators. We should see more approvals this year. We could be sitting at the end of 2026 with up to five products approved. And so as we diversify the portfolio of products and as we launch products in more and more countries around the world, the company is growing again this year and potentially even further in '27 as Europe as you said earlier is reopening its market for us.
And what does that mean in terms of your continued focus on cost cutting, Stephane? What are your expenditures expectations for this year?
Yes. So we expect of course to reduce cost, not as much as last year. Last year the team did a tremendous job of resizing. We basically took $2 billion of cost out of a company in a single fiscal year. This year it will be more modest but we'll continue to reduce cost because we also have to invest in the future. As we just spoke about cancer, we have nine ongoing studies as you know, those are big and expensive. We also are investing in rare genetic disease. And so those investments are important to build the future of a company. So the momentum has changed and 2026 is going to be a very exciting year for us.
