Vaxcyte, Inc. (NASDAQ:PCVX) Q4 2023 Earnings Call Transcript

Vaxcyte, Inc. (NASDAQ:PCVX) Q4 2023 Earnings Call Transcript February 28, 2024

Vaxcyte, Inc.  isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good afternoon, everyone. My name is Bo and I will be your conference operator today. At this time, I would like to welcome everyone to the Vaxcyte Fourth Quarter and Full-Year 2023 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. [Operator Instructions] And just a reminder, today’s call is being recorded. Now at this time, I will turn things over to Mr. Andrew Guggenhime, President and Chief Financial Officer of Vaxcyte. Please go ahead, sir.

Andrew Guggenhime: Thank you, operator, and good afternoon, everyone. I’d like to welcome you to Vaxcyte’s earnings conference call to discuss our 2023 results and to provide a business update. I’m joined today by our Chief Executive Officer, Grant Pickering; and our Executive Vice President and Chief Operating Officer, Jim Wassil. Earlier this afternoon, we issued a news release announcing our results. Copies of this and our other news releases, latest corporate presentation and SEC filings can be found in the Investor & Media section of our website. Before we begin, I’d like to remind you that during this call we’ll be making certain forward-looking statements about Vaxcyte, which are subject to various risks, 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 10-K for the year ended December 31, 2023, and any subsequent reports filed with the SEC. With that, I’ll turn the call over to Grant Pickering. Grant?

Grant Pickering: Thanks, Andrew, and all of you on the call and webcast, thank you for joining us today. 2023 was another remarkable year for Vaxcyte, officially marking our 10th year of thoughtful and methodical research and development by the entire Vaxcyte team and our partners. We are driven by our mission to prevent or treat infections caused by bacterial diseases, including invasive pneumococcal disease for IPD. This past year, we continued to make significant strides in advancing our potentially best-in-class pneumococcal conjugate vaccines for PCVs VAX-24 our lead 24-valent candidate, and VAX-31, our next-generation 31-valent candidate. And we remain focused on providing the broader spectrum of coverage against IPD for both adults and children.

Last year was highlighted by the successful completion of our VAX-24 adult Phase 2 program following our stellar initial proof-of-concept data in late 2022 in adults aged 50 and 64, we reported data in April 2023, from a separate Phase 2 study in adults 65 and older. It not only confirms the prior proof-of-concept study results, which showed even greater immune responses, compared to Prevnar 20, on a relative basis. These data further validate the potential of our cell-free platform and carrier-sparing approach to deliver broader spectrum PCVs. The findings from our adult Phase 2 program support a potential best-in-class profile for VAX-24 and demonstrate how our novel cell-free technology platform has the capability to overcome the limitations of other conventional approaches.

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Q&A Session

These results and the foundation we have carefully created have us well-positioned to advance our PCV franchise to potentially disrupt what has consistently done a crucial vaccine class, societally, and financially. Following the VAX-24 adult Phase 2 program completion, we made important progress with regulators. This included a successful end of Phase 2 meeting with the FDA regarding the clinical design of the VAX-24 Phase 3 program, as well as encouraging feedback on CMC-related matters as we plan for future potential BLA submissions. In addition to the positive developments for VAX-24, we were pleased to initiate the adult clinical program for VAX-31. With this important step, VAX-31 is now the broadest spectrum PCV in the clinic. Following the FDA’s acceptance of the adult IND, we initiated the Phase 1 portion of a Phase 1/2 study in adults 50 and older in November.

This strong momentum in this study continued into 2024 as we announced the start of the Phase 2 portion in early January and completion of enrollment less than a month later. I am incredibly proud of our many achievements, particularly across clinical, regulatory, and manufacturing for our PCV programs. And we now look ahead to several important milestones. For the adult indication, our VAX-24 program is Phase 3 ready. And we are in the final stages of manufacturing the product needed for several of the potential Phase 3 studies, including the pivotal non-inferiority study. In advance of the potential initiation of this VAX-24 study in the second half of this year, we expect to announce the topline safety, tolerability, and immunogenicity data from our VAX-31 adult Phase 1/2 study in the third quarter.

This timing and the overlapping timeline for the completion of the VAX-24 and VAX-31 adult Phase 3 studies provide us the opportunity to make a strategic decision regarding which adult program we now move into Phase 3, following the VAX-31 data readout. As we advance VAX-24, we intend to initiate the pivotal non-inferiority study in the second half of this year and the balance of the Phase 3 studies, which are shorter in duration than the non-inferiority study in 2025 and 2026. If we advance VAX-31, we expect to initiate the full complement of the Phase 3 studies in 2025 and 2026. Regardless of which program, we move forward we expect to initiate the final Phase 3 studies in 2026. And subject to the results of these studies, submit a BLA shortly following the completion of the last study.

VAX-24 remains a potential best-in-class candidate covering more serotypes in any pneumococcal vaccine on market or in U.S. clinics today. And VAX-31 has the potential to further increase coverage to approximately 95% of IPD circulating in the U.S. adult population. Beyond expanded disease protection, VAX-31 is designed to also maintain coverage of previously circulating strains that are currently contained via ongoing vaccination. This is critical since previously controlled strains have rebounded in prior instances where vaccine coverage was withdrawn. This puts us in a unique position relative to other sponsors for applying the conventional PCV approach and are forced to make sacrifices in an attempt to cover nearly circulating strains. We estimate that the adult pneumococcal vaccine market today is approximately $2 billion of the total $8 billion annual global market and is positioned to be the fastest-growing segment.

Growth in the U.S. market is expected to accelerate due to the potential shift in universal adult vaccination from age 55 down to 50, which would both expand the market and open up the adult regimen to a prime-boost schedule, nearing the infant market. Outside the U.S., we expect to see other countries begin to routinely recommend adult vaccination, as evidenced by the recent recommendation in Germany to vaccinate adults 60 and older. While the adult market is expected to grow significantly, the infant segment continues to represent the largest portion of the global pneumococcal vaccine market at an estimated $6 billion in the sales annually. We believe VAX-24 has a potential best-in-class profile for this vital population. And we are thrilled to be nearing the completion of enrollment of the second and final stage of our VAX-24 infant Phase 2 study.

Based on our progress, we expect the topline data from the primary immunization series by the end of the first quarter of 2025 with the topline booster data to follow by the end of that year. In contrast to the adult program, the VAX-24 infant clinical program is substantially ahead of the VAX-31 infant program. And we intend to advance both of our PCV candidates in this population. We expect to provide guidance on the potential timing for a VAX-31 infant IND, following the readout of the VAX-31 Phase 1/2 adult study later this year. Bringing the broadest PCVs to both infants and adults represents an opportunity to significantly reduce invasive disease across the entire population, is what drives our efforts every day. Given the magnitude of the opportunity of our PCV franchise, we continue to invest in further solidifying our manufacturing foundation to enable robust large-scale manufacturing.

These investments are intended to support the potential global commercialization of our PCVs for both the adult and the infant populations. Our expanded relationship with Lonza and our decision to exercise our option Sutro Biopharma, both of which we announced late last year are reflective of these efforts. In addition to our PCV franchise, we continue to advance our earlier-stage vaccine candidates including VAX-A1 to prevent Group A Strep, VAX-PG to treat periodontitis, and VAX-GI to prevent dysentery and shigellosis. VAX-A1 and VAX-GI, as well as our PCV programs targeting diseases that are significant contributors to antimicrobial resistance or AMR. AMR poses a serious global health threat, and if no action is taken, drug-resistant diseases are expected by the WHO to be a leading cause of death by 2050.