Vaxcyte Inc (PCVX) 2025 Q4 法說會逐字稿

Good afternoon. My name is Chloe, and I will be your conference operator for the Vacsite 4th quarter and full year 2025 financial results conference call.

All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer period.

If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.

If you would like to withdraw your question, press 2.

Today's call is being recorded. I will now turn the call over to Andrew Guggenheim, President and Chief Financial Officer of Vacite. Please go ahead, sir.

Thank you, operator. Good afternoon, everyone, and thanks for joining us today as we review our 2025 results and provide a business update.

I am joined by our Chief Executive Officer Grant Pickering and our executive Vice President and Chief Operating Officer Jim Wassel.

Earlier today, 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 factsite which are subject to various risks, uncertainties, 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 forth in our Form 10k for the year ended December 31st, 2025, and any subsequent reports filed with the SEC. With that, I'll turn the call over to Grant Pickering. Grant.

Thanks, Andrew. As we close out 2025 and look forward to multiple clinical readouts beginning later this year, I'm proud of the progress we made across the company, particularly within our pneumococcal conjugate vaccine or PCB franchise. Despite decades of vaccination efforts, pneumococcal disease continues to drive substantial morbidity and mortality worldwide.

Particularly among young children and older adults. While current vaccines have made a meaningful impact, gaps in serotype coverage persist, and the public health need for broader spectrum protection remains clear. Consistent with that need, we are seeing accelerating growth in the adult PCB market, driven by expanded age group recommendations in the United States and increasing international adoption of adult PCV vaccination.

Continued momentum in the PCD class has reinforced the size of the opportunity and demand for a PCD that increases disease coverage by protecting against both historically and currently circulating serotypes while maintaining robust immune responses. Taken together, this underscores our opportunity to improve public health as we prepare to enter an increasingly attractive commercial market.

The unprecedented results from our phase 2 study in adults demonstrated that VAX 31 may offer substantial improvement over existing products and achieve our objective to significantly expand disease coverage while maintaining high immunogenicity responses.

And with the Opus phase 3 program underway, we believe that we are uniquely positioned to set a new standard by which future adult pneumococcal vaccines will be measured.

In December we initiated Opus 1, our pivotal non-inferiority study, and expect to announce topline safety, tolerability, and immunogenicity data in the 4th quarter of this year.

In January, we initiated Opus 2, a phase 3 trial evaluating vax 31 when administered concomitantly with a licensed seasonal influenza vaccine reflecting real-world vaccination practice. And earlier this month, we announced the initiation of our Opus 3 trial to evaluate the safety, tolerability, and immunogenicity of VAX 31 in adults who previously received lower valency pneumococcal vaccines. For this population, Vax 31 could represent a substantial incremental benefit and could be well positioned to obtain a catch-up recommendation. We look forward to the readouts for both Opus 2 and 3 in the first half of 2027.

In infants, we reported the final data from the Vax 24 phase 2 dose finding study in November.

These data were consistent with the previously reported positive interim results and provided important encouraging insights into immune responses, concomitant administration with other vaccines, and dose responsiveness.

Based on these learnings, we modified the ongoing VAX 31 infant phase 2 study to include an optimized dose arm in order to evaluate multiple higher doses than those explored in the VAX 24 infant study.

Enrollment for this study is now complete, and we expect to announce topline safety, tolerability, and immunogenicity data from both the primary 3-dose immunization series and booster dose either sequentially or together by the end of the first half of 2027.

In parallel, we continue to make strides to fortify our manufacturing capabilities, commercial readiness, and financial foundation.

On the manufacturing front, I'm pleased to report that we have now completed the construction of the dedicated large-scale manufacturing facility on time and on budget that has been designed to support global commercial demand for our PCB candidates throughout the developed world.

In addition, the buildout of a high volume custom filled finish production line in North Carolina is underway as part of a long-term investment of up to $1 billion in US manufacturing and services.

To advance commercial readiness, we began to scale the organization, including the appointment of our first Chief Commercial Officer, Mike Millett, and the initiation of launch planning activities in earnest.

These actions reflect our conviction in the long-term potential of our PCB franchise and our focus on a highly successful commercial launch.

Turning to our balance sheet.

We strengthened our already robust financial position with the successful completion of a public equity offering in February. We believe we are well positioned to advance our programs through multiple upcoming data readouts while continuing to invest in the capabilities needed to prepare for commercialization.

Overall, 2025 was about focused execution on our clinical programs and establishing the infrastructure clinically, operationally, and organizationally to support what we believe will be a defining period ahead.

None of this progress would have been possible without the expertise and dedication of our teams across the organization, and I want to thank them for their commitment.

With that, I'll turn the call over to Jim to walk through our clinical programs in more detail, including the Opus phase 3 program, the infant program, and an important update on vaxA1, our Group A strep candidate. Jim.

Thanks, Grant. I'll start with an update on our VAC 31 adult phase 3 program and then turn to our VAC 31 infant phase 2 program and broader height.

Beginning with adults, the phase 3 Opus program represents back 31's transition into late-stage development and is designed to support a Plan BLA submission.

The phase 3 clinical trials were finalized in consultation and alignment with the FDA and are intended to generate a broad and robust safety, tolerability, and immunogenicity data set across relevant adult populations and real-world vaccination scenarios.

Opus 1 is our pivotal non-inferiority trial evaluating vax 31 for the prevention of invasive pneumococcal disease and pneumonia.

This trial is evaluating the safety, tolerability, and immune responses of VAx 31 in adults aged 50 and older through direct head to head comparisons with both Prevnar 20 or PCV 20 and capvaxi or PCV 21, which are the current standard of care PCVs for adults. We remain on track to announce top-line data in the 4th quarter of this year.

Opus 1 was designed to establish a best in class profile for vax 31.

Based on the unprecedented clinical results we have generated to date, we believe this trial can deliver that profile and thus set a new standard in adult pneumococcal vaccinations.

We believe the current standard of care vaccines, PCV20 and PCV21, have hit the ceiling of what conventional approaches can achieve. Each of these vaccines represented a meaningful advancement over prior generations.

Yet in both cases, trade-offs were required to obtain life insurance.

In the case of PCB 20, they focus on making incremental stereotype additions to PCB 13, but falls short of coverage of the 31 stereotypes and back to 31.

For PCV 21, though it covers a greater percentage of circulating disease than PCV 20, the trade-off was sacrificing historically circulating strains, some of which are still circulating meaningfully, and others that are likely to return if we fail to protect against them.

VAX 31 is designed to overcome each of their limitations. By using our validated carrier sparing platform, we have shown VAX 31 can provide protection against both currently circulating and historically prevalent serotypes while maintaining robust immune responses.

With the Opus 1 study, where PCV 20 and PCE21 are the comparators, totality of data framework supports our objective to deliver a best in class PCV.

In this context, regulators assess both the public health impact and the overall strength of the data package for which perfection on an individual stereotype case has never been required, nor is it our expectation.

With this in mind, we are confident we can deliver an outcome to support a robust DLA submission, and with 10 or 11 incremental stereotypes over our study comparators, we believe Act 31 has the headroom to miss on a handful of individual stereotypes without risking the ultimate goal of licensure with what we believe is the best in class profile.

Now I'll briefly review the other Opus trials.

Which are also currently enrolling subjects. Opus 2 is designed to evaluate the safety, tolerability, and immunogenicity of AX 31 when administered either concomitantly with or one month following a licensed high dose seasonal influenza vaccine in adults.

This descriptive study reflects clinically relevant real world use scenarios, particularly for older adults who routinely receive multiple vaccines at one time.

Opus 3 is evaluating vaxillary 1 in adults who have previously received lower valency pneumococcal vaccine.

This descriptive study is intended to evaluate the safety, tolerability, and immunogenicity of vaxillary one, including whether vaxillary one can boost stereotype-specific immune responses while providing the broadest coverage in a single vaccine in this adult population.

Opus 12, and 3, complemented by a planned manufacturing consistency study, are designed to generate a broad and robust safety, tolerability, and immunogenicity data set. The 3 ongoing trials will enroll approximately 6,000 adults in total, of whom approximately 3,400 will receive vax 31.

Turning to our infant PCV programs, we completed the VAX 24 phase 2 dose finding study, the final data confirming dose-dependent immune responses and the safety and tolerability profile consistent with the standard of care comparative.

As Grant noted, we use those learnings to modify the ongoing backstory on infant phase 2 study to include an optimized dose arm.

The higher doses being evaluated are designed to enhance and optimize immune responses to provide short-term and long-term protection while maintaining tolerability and safety.

Enrollment in this optimized study is now complete with 900 infants do.

In US children, vacc1 is designed to cover over 90% of IPD and acute otitis media due to strep pneumonia, which represents a significant increase over today's standard of care.

By the middle of this year, we expect to provide an update on our unblinding and disclosure plan for this study.

Beyond our PCB franchise, you will recall that we made a decision to pause non-PCB pipeline programs last year.

I'm now pleased to share that we plan to resume development of our most advanced pre-clinical program, VA 1, our Group A strep vaccine candidate, which is designed to provide protection in both the adult and pediatric settings. We expect to initiate a phase 1 study in adults this year with the primary objective of assessing safety and tolerability.

We plan to conduct a study in Australia where Group A strep has been especially problematic and with our experienced investigative networks with expertise in Group A strep.

This approach is designed to generate high-quality initial safety data and provide a foundation for evaluating next steps in this program's development.

Group A strep remains a major global cause of morbidity and mortality due to its wide ranging clinical manifestations and potential for severe complications. Group. A strep causes common illnesses such as strep throat and skin infections, but it can also lead to serious conditions like sepsis, meningitis, and rheumatic fever, and is a leading driver of antibiotic use, most notably in children.

Each year it's estimated that Group A strep is responsible for over 600,000 deaths and 800 million cases of illness worldwide.

In the United States, the medical and economic impact of Group A strep is substantial, with the estimated annual healthcare and productivity costs exceeding $6 billion. This underscores the importance of advancing a preventative vaccine approach.

With that, I'll turn the call over to.

Andrew.

Thanks, Jim.

I'll begin with a brief overview of our financial position and then touch on our public affairs and policy engagement.

As of December 31, 2025, we reported $2.4 billion in cash equivalents, and investments.

Subsequent to year-end, we further strengthened our balance sheet through a public equity offering, raising approximately $600.2 million in net proceeds. The offering further enhances our financial flexibility as we advance our adult and pediatric back 31 programs. Continue to invest in manufacturing readiness and prepare for potential future commercialization activities.

Based on our current operating plan and including the net proceeds from our recent financing, we believe our cash on hand provides runway to at least the end of 2028. This supports execution across multiple planned clinical, regulatory, and manufacturing milestones over this period.

From a total spending perspective, we saw an increase in 2025 compared to the prior year, driven primarily by continued investment in commercial manufacturing readiness and advancement of our clinical programs. R&D expense growth reflected manufacturing scale-up and validation activities and latest clinical execution.

Separately, we saw an increase in capitalized costs primarily related to the build out of our dedicated manufacturing facility.

Our full year audited financials are available in our Form 10k filed today.

Looking ahead to 2026, we expect total expenses, particularly within R&D, to increase meaningfully relative to both full year 2025 and fourth quarter 2025 annualized levels.

This expected increase is primarily driven by a few key factors. First, an increase in manufacturing spend to support commercial readiness, including the buildup of VAC 31 commercial supply in advance of potential launch. And second, higher clinical spend to support a greater number and size of clinical trials with multiple VAC 31 adult phase 3 studies and the Phase 2 infant study.

Within manufacturing, there are several initiatives running in parallel, preparing for the potential vax 31 adult launch at the current Lanza shared facility, running batches at the dedicated large scale manufacturing suite, the construction of which has now been completed.

And to a lesser extent bringing the dedicated stillfinished facility online.

With respect to capitalized costs, we expect these to trend down in 2026 compared to 2025. As I mentioned, we have now completed the buildout of the dedicated large scale manufacturing facility with Lanza, and as a result, the majority of the costs related to this facility going forward will be expensed rather than capitalized.

Turning to public affairs and policy engagement, during the year, we formalized and expanded our efforts to engage with policymakers and public health stakeholders. This included targeted outreach to federal government stakeholders and discussions focused on the importance of science-based vaccine policy, domestic manufacturing readiness, and the role of broader spectrum vaccines in reducing disease burden and healthcare costs.

We continue to engage constructively with the FDA as our programs advance, and we believe the regulatory framework for PCBs remains well supported.

These engagements are focused on process and clarity, and we view them as an important part of responsible development as we move into latest programs.

With that, we'll turn the call back to Grant.

Thanks, Andrew. As we close our prepared remarks, 2025 was a year of executional excellence, laying the foundation for advancement in the latest development and continuing our transition toward becoming a commercial enterprise. The progress we've made across clinical, manufacturing, and commercial readiness reflects an organization that will be prepared to seize the opportunity our PCB franchise affords. We believe the breadth of this franchise. The underlying strength of our platform and our ability to deliver disciplined execution, position the company well for what we expect will be a catalyst rich 12 to 18 months ahead. With that, we're happy to take your questions, operator.

(Operator instructions)

Roger Song with Jeffries.

Great, team, thanks for that day and I take care of your question. Two from us. One is for opposite one, how is the study power to show the statistical non-inferiority, against each competitor independently? Just curious if FDA look at the population, they want to show the non-inferiority against either, parameter 20 and then.

Laxative, independently, would you be able to show that? And then, the other thing is, since you have, you're about to reach the alignment on the manufacturer consistency study at the last phase of phase, last phase three study, just curious, what's remaining to be discussed. Would that involve the US and ex US regulatory? That's it.

Thank you.

Yeah, thanks for the question, Roger. Nice to hear from you. The first question was about Opus 1 and the powering. I think the first clear, key thing to point out is that we, locked down that pivotal phase 3 study, in consultation with the FDA.

The non-inferiority, you asked whether or not it was independently assessed. The way the study is set up, first of all, as it relates to the power is we've already performed a head to head study against Prevnar 20, and so we have really good data to perform the powering to set expectations as to our ability to hit the non-inferiority.

We think we have exceptionally high power across the board to deliver relative to Prevnar 20. We have not performed a head to head study against cap axi, so we need to look across their own comparisons to Prevnar 20. So we do have high confidence there as well, but as it relates to the serotype by serotype comparisons, the way the study is set up.

Is such that for the 10 serotypes that are in all three vaccines, the analytical plan has it such that we only need to show noninferiority to one or the other to declare success. And then as it relates to the incremental serotypes, there are 10.

More that are exclusively in VAX 31 and in Prevnar 20, those will be head to head comparisons. We've already seen the results in our phase 2. We're quite confident there. And then as it relates to the exclusive serotypes in BAX 31 and capfaxi, there are 8 of those, and we've been able to look across. Their GMRs compared to Prevnar 20, our GMRs compared to Prevnar 20, the magnitude of the OPA responses, the magnitude of the IGG responses, the meanfold rise over baseline, and taking, taken together, it gives us confidence that we're going to see a successful result. A successful result, as we pointed out in the call today, is not perfection, right? No. Pneumococcal conjugate vaccine has ever had a perfect slate of comparisons to the standard of care vaccines. These vaccines are approved based on the totality of what they offer over and above the standard of care vaccines. And when we bring 10 or 11 more stereotypes to the equation. Totality is tilted in our favor by design and so we believe and the FDA has told us we don't need to be perfect. We can miss on a few. We know that we have really robust immune responses and it gives us confidence, but we don't know, we know we don't need to be perfect.

We believe even if we were to miss on a handful of comparative stereotypes, that would still put us in a terrific position with an approvable BLA that would have a best in class profile. You also asked about manufacturing consistency. Indeed, that is the last incremental study that we need to lock down on top of the three Ous studies that are already underway and enrolling, and I would say those conversations with the The FDA are moving apace. They're constructive, and the real key agreement that we reached last summer was the ability to advance into phase 3, for which there was an exhaustive review of all of the manufacturing to date for this complex biologic, and we feel good about where we're tracking, and we anticipate that that study will get underway and conclude in conjunction with our expected BLA timing.

thank you so much.

Thanks, Ra.

(Operator instruction)

Jonathan Miller with Evercore ISI.

Hi guys, thanks.

So much for taking my questions and looking forward to the, as you say, catalyst‑rich time coming in the next year and a half. I would love to ask, first.

You mentioned a catch‑up rec being possible in the adult market and obviously it's in the context of PCV21, which does deliver strong results across many serotypes that are relevant to the adult market. So what do you need to show specifically versus PCV21 for that catch‑up rec to seem possible to get or to seem likely to get from the ACIP?

And then secondly, dose response, which you've shown a couple of times, looks good for many serotypes, but it's not the same across all serotypes in those infant studies that we've seen. So when we think about the new dosing regimen in the updated X31 infant study, what drives your confidence that the serotypes that need the additional immunogenicity boost are going to get what you're hoping for out of the increased dose?

Yes.

Hey, John, thank you for the question, and indeed we're really excited about the Catalyst rich year ahead for us, starting in the 4th quarter and then into 2027 with the 3 readouts we expect, then.

So, as it relates to the Opus II study, which is the one that was set up for a catch-up recommendation where we're giving back 31 to adults who have previously received a lower valent pneumococcal vaccine.

The convention has been to run these types of studies and to demonstrate the ability to improve the responses to those stereotypes for which they received vaccination in the past, so effectively see a boost to what they came into the study with after having previously been vaccinated. And then to demonstrate that the incremental stereotypes on top of what they saw previously are also delivered with robust immunogenicity. So I mean what we're looking to do is to demonstrate across the span of historical vaccines, inclusive of Prevnar 13, the 15. Valent, the 20 valent, the 21 valent capib, and then also against pneumovax that we can expand coverage over and above what they have benefited from with a previous vaccination and potentially boost the responses to the strains they saw previously.

That's what the competitive programs have showed. That is what we would expect to show, and the broader spectrum vaccine has enjoyed this sort of catch-up recommendation in the past, and that's what we'll be shooting for. One of the challenges for us is that cap vaccine is only recently on the market, so there will be fewer individuals who've received that vaccine, but we'll do what we can to produce evidence to suggest that there's a benefit there too.

Then your question about the infant expectations, I appreciate that comment about the demonstration of dose responsiveness. That is definitely what we see in the data.

There are some stereotypes that are more responsive to increased doses than others, and what we're looking to showcase in the VAx 31 data that we'll see next year is a continued ability to demonstrate the incremental stereotypes that we bring over and above the standard of care can produce. That sort of expanded coverage footprint and that has been reasonably straightforward to show based on our vax 24 infant data and for others historically. So we have high confidence that the incremental 11 will come through over and above the 20 day one.

And then as you'll recall, the 20 for which we've compared already in the context of the x 24 study, most of the stereotypes looked great for our product. There were a handful that showed room for improvement. Fortunately. For us they weren't key circulating strains, but what we're looking to show is continued strong robust responses on the stereotypes for which there's the most strategic importance. Those are the strains that are circulating.

And then for those serotypes where we did show room for improvement that aren't circulating, we'll look to recover as many of those as possible, and what we've done is introduced multiple doses in the context of the x 31 phase 2 study that are using higher doses for any of these serotonin. That showed room for improvement. So again, as is the case in adults, most certainly in the infant setting, we've seen as many as 6 missed non-inferiority comparisons already in this segment, and you know we're looking to recover as many of those as possible. But we know perfection is not the requirement, so even if there were still a handful of misses at the end of the day, in the context of a 31 day vaccine that increases coverage from in the 60th percentile of circulating disease to the 90th percentile of circulating disease, that would be a huge step forward for the class.

Great.

Thanks so much.

(Operator instruction)

Saleem Sayed with Mizuho.

Hi guys, this is Eric on for Celine. Yeah, just, curious about the Group A strep. I understand that it's early yet, but just trying to think about, what we might expect to see.

The plans for development, what other things are out there, is there An accepted standardized standard for eugenicity.

Do you think that you know longer-term, all things going well with phase 1, phase 2 that you might expect to run an efficacy trial for phase 3 for a submission. Thanks.

Yeah, hey, Eric, thank you for the question. I'm going to, hand it off to Jim in just second, but I really appreciate the acknowledgment around vaccine one. This is a program we've been really excited about for quite some time. It was a really tough decision to pause that program last year, but we're thrilled to be able to, guide to the initiation of clinical development this year. This is a really important. Vaccine.

This has a blockbuster kind of profile. It's an important unmet need in both adults and infants. So yeah, I think it's going to get substantial attention as we move into the clinic, but I want to hand it to Jim, who's been the chief architect of this program, to answer those questions as it relates to setting expectations around clinical data coming out of phase one, Jim.

Thanks, Grant.

Eric, our plan is to start in adults with a safety assessment. We'll also be looking at immunogenicity, both IGA and IgG. We're going to be looking at both serum and saliva to see what the responses are to our antigens. There is no correlative protection, so we will not be able to predict. Whether or not there is efficacy. However, what's unique about Group A strep is, strep throat is so ubiquitous in school entry kids that we can do a very small study, and you're talking hundreds, maybe just barely in the thousands. And you can really get an early read on proof of concept even before going into a phase 3. So our intent here is to get some safety from adults as well as immunogenicity and dose ranging analyses, move into the toddlers, and then do a proof of concept.

And Eric, this is Andrew and consistent with prior practice, we've obviously guided to initiating the phase one study this year. We're excited about that, as we've noted, and consistent with our prior practice, we would intend to outline the specifics of the trial design upon the commencement of enrollment in the trial.

Great, super helpful.

Thank you and thanks for taking the question.

(Operator instruction)

Seamus Fernandez with Guggenheim Securities.

Hi guys, this is Evan Wang on for Seamus. Just keep me, just one thought on group date strep. Great to see that back, by the way, just curious, if you mentioned that does this reflect more of the updated financial position or any incremental confidence around the either the vaccine or development path. And then on back 31, can you just describe some the work, with respect to the pre-commercialization planning underway now and some of the red discussions around postmarketing SC.

Studies and then maybe on the postmarketing studies just how you should be thinking about how you're tackling these versus to some of what we've seen in the past from Merc with Pfizer. Thanks.

Yeah, maybe I can take the second 1 1st and then punt the 1st to Andrew.

As it relates to the postmarketing efficacy studies for vax 31, what we have worked out with the FDA is entirely consistent with the same agreements that were made with the currently marketed standard of care pneumococcal conjugate vaccines. So in the case of Merck and capvaxi, they agreed to a test negative design surveillance approach where you monitor.

Pneumonia cases in the environment to confirm that you see the amelioration of disease from your product in relation to the other products that are out there. So that's a standard study that has already been blessed, and we will be following an extremely similar approach. So I hope that answers your question. And then Andrew, can you address the Group A strep related question, either you and or Jim?

Yeah, sure, thanks for the question, Evan. You may recall last year, when we announced our decision, as Grant said, difficult, but we think the right one to pause advancement of our pipeline programs in the clinic. The most implicated program of that decision was the vaxA1 Group A Strep program, and that decision was made principally for financial reasons to extend our runway to ensure we could deliver on the key milestones for our PP franchise, which of course remains the biggest value driver.

We obviously executed financing that closed in February of this year and in our discussions with investors and others, one of the benefits of the financing. Was to enable us to again resume advancement of the pipeline programs and we specifically highlighted vax A1 in those discussions and so we can now move into the clinic with confidence and at the same time preserving all the significant milestones across our PP franchise that we can continue to deliver on with cash now through at Least the end of 2028.

Great, thank you.

(Operator instruction)

Carter Gould with Cantor.

Great. Good afternoon, guys. Congrats on all the progress. Looking forward to an exciting 2026. Back to Opus One. Jim and Grant, I appreciate your comments around the regulatory flexibility on individual serotypes, but I guess I wanted to pressure test how much that commentary should be read to. Extend even to scenarios around serotype 3 comparison serotype 3 comparisons against PCB 21 given its importance in IPD prevalence and maybe just speak as well to the commercial importance of demonstrating that inferiority there to avoid counter detailing.

Thank you.

Yeah, hey, thank you, Carter. Appreciate the question and the recognition of the moment for us.

Yeah, so I think, the key for us. Is that the test for vaccines in this class is the totality of the vaccine's contribution on a relative basis and so in our conversation and exchanges with the FDA, we've acknowledged that they said in writing we could miss on a few serotypes, and that was without designation. So there isn't a serotype that would be a disqualifier.

Now that said, I can completely appreciate why you're raising serotype 3. It is the outlier in the entire pneumococcal space. It is an infuriating stereotype that despite its inclusion in the market in pneumococcal conjugal vaccines for now over 15 years, it continues to be the top circulating serotype, and the reason for that is unfortunately, none of the vaccines have produced a. Magnitude of antibody responses that can keep that particular serotype in check. This is a complete outlier relative to the remainder of the serotypes that have been included now, up to as many as 21, and our objective is to include that up to 31 soon.

So yeah, serotype 3 is just a total outlier, and even though there have been some of the vaccines that have been able to show higher serotype. Immune responses relative to others. Unfortunately they're all still well below that protective threshold.

So we've seen this play out already.

When the 15 valent for Merck came out, they had higher immune responses to serotype 3, but the reaction from all the key decision makers was, well, better to have more, but not enough for it to be meaningful. And so that is the reality of where we find ourselves is in a situation where no one. Been able to produce meaningfully different antibody responses that anyone thinks would produce a better outcome. Unfortunately, so serotype 3 has not proven to be a differentiating feature for anyone, and you know we already have our serotype 3 responses. Ours looked better than Prevnar 20, both in the adult setting for vax 31, as well as for vax 24. And in the infant setting for vax 24, so we know we're on the right track, and we'll have to see what ultimately our immune responses look like in a direct comparison to capxi, but ultimately it has not proven to be a benefit to the products that have had slightly higher immune responses, so we do not expect that to be a competitive differentiator coming out of these studies.

Appreciate that.

Thank you.

(Operator instruction)

Jason Gerberry with Bank of America. Your line is open.

Hi, good evening. Congrats on all the progress of the court, this quarter, and thank you so much for taking our question. This is Tina on for Jason, by the way. I guess maybe just to follow-up on the prior discussion of the various open one data scenarios.

You kind of outlined a clear base case, in order to kind of clear the regulatory bar for approval.

Curious, in your view, just maybe thinking about the future competitive landscape, what is the bull case on data? Is it hitting statistical superiority on a certain number of strains or statistical superiority on, some high priority strains? And then just a quick one on Zach's Excel. Can you talk about where this program just kind of generally sits in terms of development? If you felt compelled to advance it, how quickly could you move it into the clinic?

Thank you.

Well, thank you for those questions, Dina.

Thank you for being a pinch hitter for Jason.

So the first question as it relates to Opus One, I'm glad that Bay's case is clear and Thank you for asking about the upside case. I mean, the first thing to emphasize is that coverage is king in this class. We've seen it over and over and over again, and we're seeing it playing out once again, even in the context of capvaxive relative to Prevnar 20, which are the two currently recommended vaccines for adults.

Kavaxiv is obtaining market share at a really rapid clip based on its coverage advantage. And yet it has this Achilles' heel of not covering 10 of the historically circulating stereotypes, a couple of which are still circulating significantly. So we think we have an opportunity to once again prove that coverage is the key adoption feature, and we'll have an improved coverage advantage that exceeds what has turned out to be a substantially winning strategy for others in the past. So coverage, but then as it relates to superiority on a relative basis for immunogenicity, that is something that we haven't really seen much of in this class. The only example of that ironically was with serotype 3, and it was a really difficult uphill climb to use that to their benefit because even though they were statistically higher, and this is kind of consistent with what I was saying in the last response.

That serotype, statistically higher immune response that was in the case of one product, it didn't turn into a competitive advantage because everyone acknowledged that while statistically higher, it was not clinically meaningful for a serotype that continues to circulate in earnest. So that's the only example we have.

To look at and that was a single serotype for a broad spectrum vaccine. We have an opportunity to potentially have a different set of arguments. Obviously we have the phase 2 data relative to Prevnar 20 where we showed consistently higher immune responses across an array of the common serotypes along with And incremental 11 serotypes on top of their 20. So I think it's a very different set of arguments when you're combining coverage and improved immune responses. So as you may recall in our phase 2 study, 18 of the 20 common serotypes we were directionally higher, and 7 of those 20 had statistically Significantly higher immune responses. So I think it is a different set of arguments when you're combining coverage and a broad array of improved immune responses. And of course this is in the context of the historical trade off where you're trading coverage for lower immune responses. So we've really Flip the script on being able to have the opportunity to demonstrate both. So yeah, I think we're incredibly confident that coverage will carry the day and then we'll see how much improved immune response may or may not further the advantage as the data comes into focus.

Now he also asked about vaxx XL, that's our 3rd generation broader spectrum vaccine over and above the 31 serotypes in VAX 31. This is a life cycle management strategy. As we've said, when you have a vaccine like VAX 31 that covers 95 to 98% of the circulating disease in the US and in Europe respectively, there really isn't enough headroom to warrant.

Bringing out a 3rd generation vaccine just yet, but the reality is that serotype replacement is a key phenomena in this class, and we believe that with the utilization of vax 31 broadly, we will begin to see serotype replacement from those very modestly circulating serotypes today to something more significant. And in that regard.

We want to have the readiness to expand coverage over and above the 31 in order to produce the most beneficial vaccine societally. We also want to make sure that we continue to flex a coverage advantage relative to any potential competitors and Yet in this moment it's really more about preparedness and identifying those stereotypes for which may circulate and having readiness to add them on top of X 31 to have this 3rd generation program move forward into the clinic in earnest at the appropriate time.

Thank you so much.

(Operator instruction)

Tara Bancroft with TD Cowan.

Hi, good afternoon.

So I feel like we have a pretty good grasp of data expectations, your regulatory commercial readiness. So I kinda want to ask something more qualitative, perhaps, your thoughts on Opus 2 and 3. Between those, I'm curious to hear from you guys which of these do you find more or really the most meaningful in the commercial setting and why and how could these specifically impact an ACIP recommendation, beyond the Opus One data? Thanks.

Yeah, thank you for that question, Tara. I always appreciate you being a student of the vaccine space. So, yeah, I think for Opus 2 and Opus 3, each of these studies will contribute meaningfully to, the overall BLA package. First of all, they're going to help us round out the safety database to ensure we get enough enough adults exposed to vax 31. But then each of them provide their own additional elements to the set of arguments that we want to make both in the context of the VLA, but then also in the context of the recommending bodies as they determine how to slot facts 31 into the schedule and so.

Opus 2 and it's, examination of concomitant vaccination with flu vaccines and with vax 31, it's important. Pneumococcal conjugate vaccines are given, only so often versus flu vaccines that are, given annually. So, I think it will be helpful, but I wouldn't call it instrumental. I do think the, CI 3 study is perhaps a more strategically important outcome and you know when you think about the context of a potential catch up recommendation where we've had adults now vaccinated in earnest in the United States for 12 years, you have an entirely massive potential catch up population of individuals. Who have received lower valency vaccines and that could create a really large bolus market that we would work through over many years to give as many people the benefit of the breadth of coverage that vax 31 could provide. So yeah, if I had to pick one of the two, I think it's Opus II that could unlock the most commercial potential for the company.

Okay, great.

Thank you so much. And I also, I have to say, specifically to Jim, I'm very happy for you guys that you have strep back.

Appreciate that. I'm really pleased that we can start this program again.

We'll take our next question from Assad Haider with Goldman Sachs. Your line is open.

Great, thanks for taking the questions and congrats on all the progress. A lot of mine have been answered already. Just two quick ones. First, just on the infant program, what factors are you considering and whether to announce the infant data either sequentially or together and maybe just talk about the pros and cons of each approach. And then on the competitive front, as you look out over the PCV, competitive landscape, what are the key developments that you're monitoring and how can you ensure your lead longer-term? Thank You.

Maybe I'll take the competitive landscape question and then hand the question about the trade-offs to Andrew in just a moment. So yeah, I think as it relates to the competitive landscape, Assad, we're, in front, right? We've got two vaccines that are the standard of care today. One's a 20 valent, the other's a 21 valent. Our 31 valent is, in the midst of its phase 3 program, as we've discussed.

The only other 30 something that's out there is the program that we're aware of from GSK.

They're in phase one. They just announced today the initiation of a second phase 1 study on top of the phase one that they started last year.

Apparently it's a new formulation. We don't really know much more than that, but I think their expectation is to hope to have phase 1 safety data by the end of this year. And of course we're anticipating having the outcome of our pivotal phase 3 foundation of our VLA filing by the end of this year. So I think we're comfortably in front with a technology that is much more based in certainty.

And then of course Pfizer and Merck have their own programs. We're not aware of any further development in the adult side from Merck. We are aware of the program that Pfizer has in phase 2, which is a 25 halin vaccine, and as we understand it, there are as many as 15 different formulations currently in phase 2 for that program, so it sounds like they're still working it out, so. So of course we're watching everybody, but those are the folks that are at the top of our list. And then Sanofi has a 21 valent infant program.

It did not work in adults, but they did proceed with the 21 valent in infants. So yeah, I mean we're obviously trying to keep our finger on the pulse of everyone who's working in the space, but that's the landscape as we see it. Andrew, do you want to comment on the first question?

Yeah, sure, and thanks for the question, Assad. And just to set the context, as we've said, the current disclosure is that we would announce the PD3 and PD4 data either sequentially or together by the end of the first half of next year. And the real question that we are interrogating is whether there are any operating benefits to unblinding the PD3 in advance. And of course if we blind it we would announce.

Reality and those potential operating benefits we're interrogating would be, would it enable us to engage with the FDA earlier in an end of phase 2 meeting? Would it allow us to initiate a phase 3 program sooner? So that discussion is still underway internally. That's the primary driver of our decision here and as we've noted, we expect to provide an update on this and of declare what our plan is by mid this year.

Tom Schrader with BTIG.

Thanks for taking the question, and it's certainly going to be an exciting 18 months. I have a kind of a question on Opus 3. Is that the same format as Merck's equivalent Stride 6? And I guess what motivates the question is if you're looking at the relative boost of two different vaccines.

With people who have had a prior PCV maybe a year before, maybe 10 years before, I'm just wondering if the final immunity is so broad that it's going to be hard to say anything. So I guess the question is, did Merck run the same trial and is the trial tricky because of that big.

Window of how long they had a prior.

PCV?

Thank you. Yeah, Tom, hey, thank you for the question. I'll tag team this one with Jim, but indeed both Pfizer and Merck have run similarly designed studies as ours. Ours is of similar size in terms of enrollment and similar design, but not precisely the same. I would say.

Your question is an interesting one as it relates to the duration between vaccinations. It was interesting. The Pfizer study, they did present the baseline presentation immune responses, which was helpful.

The MERC study did not include that, at least in the published findings, so we didn't get the benefit of that particular effort to look across. Across the magnitude of immune responses based on which vaccine and how long ago they received it, but we did see some of the data from Pfizer. So I just wanted to acknowledge that first part. Jim, any other comments? I don't recall if Stride 6 was the name of their study or not, but what would you have to say?

Yeah, no, what I would comment is I think you're absolutely right, Tom, that there's a lot of heterogeneity here.

What we want to show is that if you give vax 31, that you don't have what's called hyporesponsiveness, which is a reduction in the immune response with subsequent exposures to your vaccine. Now that has been seen with people who receive Pneumovax, which is the polysaccharide only vaccine. It has not been seen in this category with PCVs, the conjugates.

So our goal is to show that we can expand coverage.

For these other vaccines, give them the extra coverage that whichever vaccine, 13,15, 2021 that they would be getting and not have any hyper responsiveness, and I think if we achieve that, then we can go forward and work with recommending bodies to see if we can get a recommendation for a catch up or an expansion for those who've been previously vaccinated.

So if you get more.

Breadth, the bar for common stereotypes is just be no harm.

That has been the case historically and like I said when you had Pneumovax and then you got a PCV, you did see some reduction in diminution in your immune response, but you haven't with PCVs, so I think that's the bar we're hoping to Achieve.

Great, okay, thanks for the details.

Yeah, thanks, doc.

(Operator instruction)

Joseph Stringer with Needham and Company.

Hi, thanks for taking our question.

You commented that.

FDA has historically required.

Greater than 3,000 patient exposures from a safety database.Perspective.Sounds like you'll have more than that in Total from your phase 3 Trials Could you just characterize how your conversations with FDA have gone on the safety database requirement and your level of confidence that having at least 3,000 would be sufficient? Any additional color on this would be helpful.

Thank you.

Yeah, so we have been aware of the 3,000 minimum standard for quite some time. We have not seen a shift in that thinking, we have. Initiated these three Opus studies on the merits and in order to not only meet the minimum exposure for vax 31, but to also set us up to have the ammunition to make that best in class set of claims. So I think our view is that it's been a consistent request and really Not sure I have anything to add on top of that. Jim, would you add anything?

No, I think historically there's been 3,000 subjects exposed and like Grant said, we're going a little bit above to make sure we get a really robust label and then, leave it at that.

Yeah, I would just say this is one of the, this is Andrew, one of the many components of the protocol that was developed in alignment and consultation with the FDA.

(Operator instruction)

David Reisinger with Lyric.

Hi, I'm Edward calling in for David Reisinger. So, just a Quick question on PCD uptake For those who are like 50 years old and above. What is the current trend Right now? Thanks.

Right now? Thanks.

Yeah, thank you for that question, Andrew. I think I will turn that one over to our Chief Commercial Officer, Mike Millette, who is with us. Mike, do you want to comment as to what we're seeing with regard to uptake of pneumococcal conjugate vaccines now that the age has been reduced down to 50 and up from 65 and up?

Yeah, sure. So, first of all, thanks for the question. It's, I think a really exciting time and opportunity for commercialization of that 31. So we're getting ramped up and ready to go. Some positive signals we're seeing in the marketplace already.

Obviously the drop to 50 to 64 is progressing. We start to see both Pfizer and Merck sales in the segment account for immunizations in that age group, 50 to 64.

I would say that in some ways those immunizations were probably lower this year because of the lower influenza vaccination rates over the course of Q4 of this year. So we'll continue to monitor those and see how they progress. Also, I would say encouraged to see the market share, that has been able to achieve, again, solidifying this market dynamic of shifting from lower serotype vaccines to higher serotype vaccines. We continue to see Mer report strong earnings, in the United States and strong market share figures.

Targeting in the high 30s, low 40s, depending on the segment of the market that that we saw last year. So we'll continue to follow that trend as well, which we see as a supportive signal for the market likely moving to a vacc 31 in the future. We also, I would just say quickly, are encouraged by the uptake internationally of some of the adult vaccination programs in European countries, Japan, Canada.

Where Merck and Pfizer continue to make inroads in driving adult immunization in the pneumococcal space, which again we hope to, follow on with the licensure of vacc 31. So I would say really positive and encouraging signals so far from the market, and we'll continue to keep everyone updated as we progress with preparations.

Excellent.

Thank you, Mike. Yeah, I think I would just want to caveat that the US is a bit of an outlier, making the universal recommendation for adults 50 and up.

While the international adoption is increasing at a terrific rate, most of the major developed countries have now made recommendations. They're sticking with a slightly older age group, more like 60 and up, and some. 65 and up, but these are, countries for which there was no universal recommendation, so it's really leading to a substantial increase in the overall opportunity for pneumococcal conjugate vaccines in adults. And Mike, thank you for bringing that up. And Edward, thank you for the question.

That concludes today's question-and-answer session and also concludes today's Factsite 4th quarter and full year 2025 financial results conference call.

Please disconnect your line at this time and have a wonderful day.

Goodbye.