CureVac NV

NASDAQ:CVAC

Earnings Call Analysis

Earnings Call Transcript 2023-Q4

[Operator]

Greetings, and welcome to the CureVac Fourth Quarter and Full Year 2023 Financial Results and Business Update Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Sarah Fakih, you may begin.

[Sarah Fakih, executive]

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 Alexander Zehnder, Chief Executive Officer of CureVac; Myriam Mendila, our Chief Development Officer; and Pierre Kemula, Chief Financial Officer of Kovac. Our Head of Intellectual Properties, Marcus Dalton, will be present for the Q&A session. Please note that this call is being live and will be archived on the Events and 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, April 24, 2024. 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 Alexander.

[Alexander Zehnder, executive]

Thank you, Sarah. Ladies and gentlemen, good morning and afternoon to everyone on the webcast. After recently celebrating my first year as CEO of CureVac, I'm thrilled to be speaking to you today as a leader of a company that is dramatically transforming itself. As societies are moving beyond the COVID-19 pandemic, we are embracing a new normal agility and innovation are more vital than ever. At CureVac, this means we are taking decisive steps in 2024 to trim unnecessary residual pandemic infrastructure and have started redesign initiatives to increase efficiency, reduce operating costs and extend our cash runway. These initiatives began in March this year with a voluntary lever program that aims to reduce 150 positions and is intended to align our workforce to our business scope and priorities. At the same time, based on the rapidly changing epidemiological environment, following the end of the COVID-19 pandemic, together with our partner, GSK we have made the decision to wind down the pandemic preparedness agreement with the German government signed in April 2022.

Based on our solid cash position of EUR 402.5 million at the end of 2023 and despite a negative cash impact in '25 related to the wind down of the Pedemic Preparedness Agreement. Our efficiency initiatives are expected to result in a net extension of our cash runway into the fourth quarter of 2025. While we continue to streamline the company and optimize costs, it is essential for us to preserve and create new value by maintaining a strong focus on advancing our research and development activities.

Accordingly, we have made substantial progress in our clinical trials and are growing our pipeline of development programs in infectious disease and oncology. In Infectious Diseases, together with GSK, we have initiated a new Phase I/II study in avian flu which is considered a potential future pandemic threat. It is the latest program progressing to clinical trials under a broad infectious disease collaboration with GSK. Our ongoing programs in seasonal flu and COVID-19 has provided promising Phase II interim data confirming that our technology platform generates strong antibody types and well-tolerated dose levels.

In oncology, the dose escalation Part A of our Phase I study in patients with resected glioblastoma has completed enrollment. Part A successfully progressed to a safety review confirming no dose-limiting toxicity and providing a recommended dose of 100 micrograms for the Part B of the study. This important growth driver, I'm particularly thrilled about our collaboration with MD Anderson. One of the world's leading cancer centers with whom we are joining forces for the development of novel mRNA cancer vaccines. Further expanding such strategic collaborations will be a key focus for ?Thaminda Ramanayake, a veteran in the biopharma industry, who we are delighted to welcome as our new Chief Business Officer as of June 1 this year.

Also supporting our oncology strategy is the mRNA printer CureVac end-to-end solution for automated manufacturing of GMP-grade RNA vaccines and therapeutics. The printer achieved next important regulatory milestones by obtaining a framework license providing even greater freedom and flexibility to manufacture different mRNA cancer vaccine candidates. Taking a step back and looking at 2023 on Slide 5, [indiscernible] inspired by the progress that has been achieved by the entire CureVac team.

Last year, we made critical advancements in our clinical trials was notably the positive phase I data in COVID and flu that allowed us to transition into the current Phase II programs with potentially differentiated vaccine candidates in collaboration with GSK. We started the Phase I program in glioblastoma kicking off our strategy for the development of next-generation cancer vaccines based on our proprietary second-generation mRNA backbone.

Our successful capital raise in February 2023 was a lot of confidence of investors, providing us with the resources to advance multiple programs and research activities. And last but not least, we strengthened our intellectual property position by adding new IP rights to ongoing patent litigation with [indiscernible] demonstrating that we continue to be at the forefront of mRNA innovation.

Building on our achievements in 2023, we are poised to continue in 2024 with a clear focus to make [indiscernible] CureVac for the future. To this end, we have put a strategic emphasis on an organizational redesign, which I will describe in more detail on the next slide.

In our clinical trial programs, we continue to move forward with GSK following the promising Phase II interim data in COVID and flu this year as well as the newly started Phase I/II study in avian flu. In oncology, following the clearance of the Phase I Part A, glioblastoma safety data, we anticipate advancing to the dose confirmation Part B mid-2024.

We expect to report a first data readout in the second half of 2024 most likely at scientific conferences such as ESMO or [indiscernible]. Our efforts to build up our manufacturing facility GMP IV are progressing, and we expect certification of the facility in the second half of 2024, contingent on regulatory approvals.

With these catalysts driving our efforts, we are confident in our ability to make meaningful strides in maturing the company and advancing our clinical trial programs in 2024. On Slide 6, let me provide you with a more detailed overview of our corporate streamline and redesign initiatives in 2024. As already mentioned, the redesign aims to significantly increase efficiencies and performance while maintaining a strong focus on innovation and R&D activities. This encompasses a rate of targeted actions to trim unneeded pandemic area infrastructure, reduce operating costs and become a leaner, more agile and focused organization. The cornerstones of our efforts include our strategic reorganization streamlining reporting lines and digitizing the company.

The focus is on an improved interface between our discovery, research and clinical development areas by bringing them together under the leadership of Myriam as Chief Scientific Officer. A unified leadership will allow for an optimal alignment on strategic goals, improved prioritization, resource allocation and seamless transition from innovation from discovery to the clinic. Furthermore, we will double down our company-wide digital and data strategy to enhance the use of data and AI throughout the company and enable accelerated business processes and pipeline innovation.

The areas where we are trimming pandemic structures, as mentioned earlier, the targeted [indiscernible] voluntary leaver program to reduce the 150 positions is ongoing. The reduction of workforce will be accompanied by [indiscernible] stronger financial discipline. This includes a much leaner budget in '24 compared to '23, which is driven by lower operating costs and lower expenses in raw materials as our commitments for first-generation COVID vaccines are mostly closed. Also, our CapEx spend will be significantly lower with the completion of our GMP IV manufacturing plant.

While these actions have already been initiated, we will continue to look for more opportunities to improve efficiencies throughout 2024. Pierre will go into more detail in the financial update later in this call, and we will continue to inform you on the progress of these initiatives throughout the year. In parallel with our organizational redesign, we have made significant progress in achieving our goals through strategic collaboration such as the co-development and licensing agreement we recently entered with one of the world's most renowned cancer institutions, the University of Texas and the Anderson Cancer Center.

The collaboration focuses on the joint development of differentiated off-the-shelf mRNA-based cancer vaccines in selected hematological and solid tumor indications with higher unmet medical needs. It combines CureVac's unique end-to-end mRNA capabilities for cancer antigen discovery, MRNA design and manufacturing with MD Anderson's world-class expertise in cancer antigen discovery and validation, translational drug development and clinical research. This collaboration is more than just the synergy of skills. It's a shared commitment of CureVac as the pioneer of mRNA. And MD Anderson is one of the most trusted leaders in cancer care to go further and faster in making a profile impact on the lives of cancer patients.

Accordingly, both sites will contribute to the identification of novel cancer antigens based on [indiscernible] genome sequencing, RNA sequencing and cutting-edge bioinformatics. So preclinical validation of the highest quality cancer antigens is expected to be followed by Phase I/II studies with potential lead candidates conducted by MD Anderson. We are convinced that this collaboration will be instrumental in boosting our oncology strategy. It will be an engine for the development of new cancer vaccines, helping us to deliver novel treatment options faster and more efficiently.

In this context, it is with great pleasure that I introduce Thaminda Ramanayake as our new Chief Business Officer. Thaminda will join our management team on June 1 at this pivotal moment in our corporate evolution. Thaminda joins from Affini-T Therapeutics. He brings 15-plus years of international experience in business development and corporate strategy. He has a strong track record of successful clinical collaborations, M&A, asset and licensing and strategic financing across multiple therapeutic areas. He has previously had positioned at Sanofi BioMarin Pharmaceuticals and Amgen. This wealth of knowledge is complemented by a strong foundation in science with focus on immunology and oncology. This broad expertise uniquely positions Thaminda to build upon our current achievements and drive CureVac's corporate strategy forward.

With this, let me hand over the call to Myriam for an update on our clinical development programs.

[Myriam Mendila, executive]

Thank you, Alex. Moving on to Slide 9. I would like to take a moment to outline our most recent development pipeline, which forms the core of our business strategy. Based on the versatility of our unique mRNA platform, we address indications in the 3 therapeutic areas of prophylactic vaccines, oncology and molecular therapy. In this updated layout, you can see that across these areas, we have focused our program resources and have discontinued legacy programs that no longer align with our development goals and expectations for adding value.

In our most advanced area prophylactic vaccine, the Phase II COVID-19 and seasonal 2 programs are ongoing being developed jointly with GSK. Both Phase II studies are fully enrolled and recent interim analysis data confirms that our platform [indiscernible] strong antibody titers at well-tolerated dose levels. The newly initiated combined Phase I/II study in avian flu is being conducted in the U.S. and [indiscernible] a modified monovalent vaccine candidate encoding an influenza H5 antigen in younger and older adults against the placebo controlled.

We continue to translate the progress in our prophylactic vaccines area into oncology. Our Phase I study in patients with resected glioblastoma is currently preparing to start Part B after having successfully completed the dose escalation Part A, as previously mentioned. In the third therapeutic area, molecular therapy, we are developing optimized mRNA therapeutics together with several collaboration partners, which are intended to enable the expression of therapeutic proteins to treat diseases in different areas with unmet medical need.

We remain committed to broadening and diversifying our pipeline being guided by our mission of advanced innovation and health solutions for people and patients.

I'm now on Slide 10, which offers more detail on our development programs in COVID-19 and seasonal flu. The Phase II part of the combined Phase I study for flu as this is a potentially differentiated multivalent candidate encoding antigens match to all 4 WHO recommended flu strain. The candidate was selected from the Phase I part of the study, which tested a comprehensive series of multivalent modified seasonal 2 candidates with up to 8 constructs per candidate.

The Phase II part of the study is fully enrolled with 480 younger adults, aged 18 to 64 and 480 older adults age 65 to 80, both age groups were tested against age [indiscernible] match licensed comparator vaccine. The vaccine candidate showed an acceptable safety and tolerability profile with the majority of solicited adverse events reported as either mild [indiscernible]. For influenza A strains, geometric mean titers generated by the vaccine candidate numerically exceeded the geometric mean titers of the licensed comparator vaccine consistently across all tested dose levels and age groups.

For influenza B strains, geometric mean titers were generally lower than those invested by the licensed comparator vaccine. Based on the challenges and addressing B strains across vaccine technologies, this is in line with our expectations and the results from early studies of other mRNA-based flu development programs. Together with GSK, we plan to assess targeted optimizations to further improve immune responses against these trends in an additional Phase II study. We are confident and planned optimization will improve performance against this historically challenging influenza strains.

In the Phase II COVID-19 study, we assess different booster vaccinations of 2 vaccine chemicals. CV0601, a modified monovalent construct encoding the Omicron BA45 variant and CV0701, a modified valent construct encoding the Omicron BA45 variant as well as the original [indiscernible] 2 strain. The study is fully enrolled with 427 participants aged 18 or older. According to the applicable standard of care at the time, the study employed and licensed bivalent mRNA comparator vaccine.

Interim data was reported in early 2024 and confirms a favorable tolerability profile combined with competitive immune responses at low doses. All tested dose levels were well below those use in any of the mRNA-based COVID-19 vaccines licensed in the U.S. and EU. As can be seen in the left of the 2 graphs, both vaccine candidates showed a lower or similar proportion of participants reporting solicited adverse events compared to those who received the comparator vaccine.

As illustrated in the right graph, CV601 shown in orange, was tested at the medium dose level and elicited neutralizing antibody titers against the Omicron BA45 variant on day 29, which numerically exceeded the titers generated by the comparator vaccine by a factor of 1.4%.

For the low, medium and high dose levels tested for bivalent CV0701, neutralizing antibody titers were 0.7, 1 and 1.3x the titers of the comparator vaccine. The study is currently ongoing with an additional expansion cohort. Taken together, the promising interim data strongly underscores the strength of our proprietary technology platform.

With this, let me shift our focus back to our oncology area. On Slide 11, let me briefly remind you of the strategy for our oncology area, which we consider a cornerstone of our future growth. We have made significant strides in advancing our cancer vaccine program based on our 2-prong strategy, which encompasses both off-the-shelf and personalized [indiscernible] vaccines. Our off-the-shelf programs target the discovery of shared antigens with high prevalence and specific cancer types and the potential to enable more scalable and rapid cancer care. In this part, we have achieved key milestones over the past several months. We are delivering on our glioblastoma study by targeting known glioblastoma antigens to validate our second-generation bulk backbone in the oncology setting.

At the same time, in collaboration with myNEO Therapeutics, we have identified novel shared antigens based on myNEO's advanced AI power technology platform, which shows strong immunogenicity in undisclosed preclinical studies. The combination of antigens evolving from the myNEO collaboration with antigens discovered with our proprietary platform enables selection of the next clinical candidate in oncology. We plan to advance this candidate to the clinic in 2025.

Our collaboration with MD Anderson will also be an engine for the future development of new cancer vaccine candidates further strengthening our off-the-shelf clinical development program. In parallel, we are also aiming to push the boundaries of first-class cancer vaccine tailored to the unique genetic makeup of a patient's tumor. We have evolved our antigen discovery platform acquired with Frame Cancer Therapeutics and specifically directed the technology towers the identification of novel classes of personalized cancer antigens.

Fast and flexible access to cancer candidates based on novel personalized antigens will be critically enabled by the RNA printer, which was just granted a framework license in the ongoing regulatory review. As we continue to navigate the challenges and opportunities of the oncology landscape, our achievements in both off-the-shelf and personalized cancer vaccines position us strongly for future growth and success in this important area.

Turning our attention now to the clinical front in oncology on Slide 12. Let me give you a little bit more detail on our Phase I study in patients with surgically resected MGMT unmethylated glioblastoma. On this slide, you can see the setup of the open label Phase I study with a multi-epitope cancer vaccine candidate, CVGBM. CVGBM features a single unmodified mRNA encoding 8 epitopes derived from tumor-associated antigens with demonstrated immunogenicity in glioblastoma. The exact nature of the epitopes is not disclosed. The dose escalation Part A has successfully completed recruitment with 16 patients across 4 dose levels between 12 and 100 micrograms. A review of the safety data for these dose levels by the Data Safety Monitoring Board, or DSMB confirms no dose-limiting toxicities.

Accordingly, the DSMB get a recommendation for a preferred dose of 100 micrograms for the subsequent Part B of the study. Part B expected to stand mid-2024, will enroll up to 20 patients. We are looking forward to sharing first immunogenicity data from the study in the second half of 2024 at the scientific conference. To finalize the encouraging news flow in the context of our oncology strategy, the RNA printer, our highly automated solution for GMP-grade manufacturing of cancer vaccines has achieved the next important regulatory milestone. You might remember that we reported the first manufacturing license for the printer to spot our oncology strategy in the third quarter of 2023.

In an ongoing regulatory review, this license was expanded by a so-called framework license, which allows the flexible manufacturing of different mRNA constructs based on the established processes on the printer. In 2024, our goal is to further expand this approach to also include the formulation module of the printer to complete the end-to-end capabilities of the system.

With this, let me hand back to Alexander.

[Alexander Zehnder, executive]

Thank you, Myriam. Before we move on to the financial part of this call, on Slide 14, I would like to briefly provide an update on our patent litigation against Pfizer BionTech in Germany and the U.S. Starting with the recent development in the U.S. shown on the left-hand side of the slide, please recall that a total of 10 patents are currently at issue in this geography.

In November 2023, our partner Acuitas Therapeutics moved to intervene, sever or stay our U.S. litigation against Pfizer BionTech. The motion is based on a co-ownership and co-inventorship claim related to one patent family covering 4 patents out of the 10 litigated in the U.S. These 4 patents cover the specific design of COVID-19 vaccine. This is in a lipid nanoparticle, which was used in [indiscernible] but first introduced to the clinic by CureVac in 2018.

Recently, a magistrate judge granted intervention and recommendation to stay litigation of all 10 patents before the district court until the Acuitas claims resolved. So far, no decision has been made, and we are currently preparing objections to this recommendation and anticipate a decision within the next 2 months. Germany, shown on the right-hand side of the slide, on December 19, 2023, the German Federal Patent Court granted in the first instance, the 2022 request by [indiscernible] to notify the German part of our technology patent on GC enrichment.

Given the broad scope of our robust patent portfolio, this initial position does not damage the strength of our value of our intellectual property position as this is only the first instance decision and proceedings are continuing in Germany with the remaining IP rights. We are currently waiting to receive the written judgment of the December decision, which will enable us to find an appeal before the German Federal Court of Justice that will firmly establish the merits of our case.

Patent litigation is part of the business landscape, especially in industries driven by [indiscernible] innovations such as ours and routinely take years to play out. However, delays and setbacks will not deter us from having our intellectual property rights acknowledged and fairly compensated.

With this, I would like to conclude the business update and hand over to Pierre for a review of the financial data.

[Pierre Kemula, executive]

Thank you, Alexander. Good morning and good afternoon to everyone on the call. Before we go into financial statement details, I would like to provide a little context on our updated runway guidance and the main factors that are impacting our 2024 and 2025 projections. Alexander already mentioned the joint CureVac GSK decision to wind down the 2022 Pandemic Preparedness Agreement with the German government.

Based on the 2024 obligation from this agreement, we expect the wind down to have a positive cash impact supporting a 2024 runway. This relates to significant savings on raw material stockpiling a reduction in running costs for our GMP IV manufacturing facility. On the other hand, in 2025, we will no longer receive the standby fee that the German government would have paid for maintaining a warm manufacturing base resulting in a decreased 2025 revenues. We will offset this overall negative cash impact with 2 things. First, we have [indiscernible] all remaining raw material commitments related to our first-generation COVID-19 vaccine. And second, our organizational redesign, including [indiscernible] program will enable reduced operating costs, allowing additional investments into selective development programs.

Further reduction in cash out in 2024 compared to 2023 will be driven by lower operating expenses in various SG&A functions. With our GMP IV facility expected to be certified in the second half of this year, subject, of course, to regulatory approval, the CapEx requirements in 2024 will also be significantly reduced compared to 2023.

Taken together, it allows us to extend our cash runway from mid-2025 into the fourth quarter of 2025. We will continue to look for more opportunities to increase efficiency in 2024, and we'll keep you updated. Looking at our cash position on Slide 16. As already mentioned, we closed 2023 with EUR 402.5 million. [indiscernible] in operations was mainly allocated to R&D activities expenditures for our GMP IV production facility and purchases of R&D materials. Overall underlying in this presentation, the significant one-off effects that took place in 2022 as a consequence of closing our first-generation vaccine [indiscernible] COVID-19.

First, let us look at revenues. Revenues increased by EUR 10.9 million to EUR 22.6 million for the fourth quarter and decreased by EUR 13.6 million to EUR 53.8 million for the 12 months of 2023 compared to the same period in 2022. The decrease year-on-year was primarily driven by lower revenues from our 2 GSK collaboration agreements. Revenues from both collaborations decreased year-on-year and amounted to a total of EUR 47.1 million in 2023 compared to EUR 62.3 million in 2022. The decrease was driven by the agreement of both companies to focus on the larger indications.

Revenues for the fourth quarter was higher compared to the prior year period as a significant portion of the milestone related to the initiation of Phase II for the seasonal flu clinical trial was recognized. Operating loss was EUR 88 million for the fourth quarter 2023 presenting a EUR 33.5 million decrease compared to the same quarter of 2022.

For 12 months of 2023, operating loss increased by EUR 24.7 billion to EUR 274.2 million compared to the same period in 2022. The operating result was affected by several key drivers. First, cost of sales decreased year-on-year, mainly as the impact of our first generation COVID-19 vaccine subsided. This resulted in lower write-off of raw materials in 2023 as well as lower impact on cost related termination of CMO activities.

Second, R&D expenses increased with higher investment in later-stage infectious diseases and oncology development programs as well as strengthening the workforce. In 2022, R&D expenses were positively impacted by a EUR 38.5 million related -- related to the reversal of an outstanding [indiscernible] provision as well as by a one-off net gain for a change in contract termination provision resulting primarily in GSK taking over from the company committed capacity at the CMO.

Third and still in 2022. Other income was positively impacted by a $32.5 million one-off of reimbursement of prepayments and production activity set up at the CMO. Financial results increased by EUR 8.7 million to a profit of EUR 1.5 million in the fourth quarter of 2023, an increase by EUR 13.9 million to a profit of EUR 14.2 million for the 12 months of 2023 compared to the same periods in 2022. They were mainly driven by interest income on cash investments. Pretax losses were EUR 86.5 million for the fourth quarter and EUR 260 million for the full year of 2023.

With this overview, I would like to hand back the call to Alexander for the summary of today's key messages.

[Alexander Zehnder, executive]

Thank you, Pierre. So building on our achievements in 2023, we have kicked off 2024 by delivering progress across several key areas and positioned ourselves for continued success throughout the year. Foremost, we have launched a comprehensive organizational redesign initiatives that trims residual endemic era infrastructure streamlines our organization and applies increased financial discipline. We expect these measures to significantly improve our operational efficiency and agility and contribute to a stronger financial performance in 2024. This expectation is reflected in the extension of our cash runway for mid-2025 into the fourth quarter of 2025.

In the clinic, our infectious disease vaccine development pipeline continues to make significant progress, marked by most recently by a start of a new study [indiscernible] together with GSK. This is complemented by key data milestones in the Phase II studies for COVID-19 and seasonal flu, confirming the competitiveness of our proprietary mRNA technology platform.

In oncology, cornerstone of our strategy, the establishment of our cancer vaccine collaboration with MD Anderson and the advancement of our Phase I study in patient with glioblastoma both reinforce our commitment to staying at the forefront of oncology innovation. The pandemic dramatically illustrated the utility of mRNA technology, and we believe that mRNA most significant promises still lays ahead of us and CureVac is rescued in its mission to bring that tremendous potential to life.

And with this, I would like to conclude our presentation, and I would now open the webcast to your questions.

[Operator]

[Operator Instructions] And our first question comes from the line of Evan Wang with Guggenheim.

[Boran Wang, analyst]

One related to the infectious disease platform. Just wondering if you could provide any time lines with respect to some of the next steps [indiscernible] for COVID, seasonal flu, and a potential combo. I guess with the flu, one question I did have was should we be thinking about a trivalent going forward or try to -- with the WHO antigen? And then with GBM glad to see the progress and selection of the go-forward dose. Anything you can share with respect to Part A on immunogenicity was that evaluated? And how does the response there compared to some of the response we've seen from some competitors recently.

[Alexander Zehnder, executive]

Thank you very much. Maybe I can start and then I will add Myriam to comment as well. Maybe first one on the IT platform. As we mentioned, we just started a new trial Phase 1/2 trial in avian flu. So that's an additional program as part of the GSK collaboration that is moving forward. And I think might address an important future need and then for COVID and flu, as we mentioned during the call, both Phase II studies are still ongoing. For flu, we are out to start the additional study to improve B strain response and for COVID, the additional part of the [indiscernible] studies still are going to optimize for different presentations of the vaccine.

And once we have all this data together from the relevant study, we will complete our discussions with the regulatory authorities for the setup of the pivotal Phase III studies. And together with GSK, we are working on what is in the most value-driving strategy for both our collaborations and that reflect the current needs for both indications. Your question to GBM whether data is already available, maybe I'll let Myriam comment on this.

[Myriam Mendila, executive]

Yes. And maybe before that, Evan had another question on flu and whether we go with the trivalent vaccine. And yes, that's the WHO recommendation, and that will be the plan for Phase III that we will basically encode just for one B strain in the future, and we will always follow the WHO recommendation, but that's sort of the plan for Phase III. And for GBM, we are analyzing [indiscernible] data but haven't disclosed those. And as we said in the presentation, right, while we are analyzing and more data coming in, we plan to present those data at upcoming oncology conferences in the second half of 2024. So at the moment, our target is ESMO and potentially the [indiscernible] conference later this year in the U.S.

[Operator]

Our next question comes from the line of Roy Buchanan with JMP.

[Roy Buchanan, analyst]

I guess you can answer this one, but the seasonal flu Phase III, do you think you might be in a position to start that trial as early as later this year? Or is that most likely early next year? And then the frame you probably can't say or you would have said I was wondering when you might be in the clinic with the personalized approach and that what's on that getting that into the clinic at this point.

[Alexander Zehnder, executive]

Myriam, so a question on timing of flu Phase III and timing of personalized cancer vaccines to the clinic.

[Myriam Mendila, executive]

Yes. So for flu Phase III, right, we need to discuss other health authorities, and our goal is, of course, to bring it to clinic as soon as possible. But right now, it's difficult, and we are reluctant to commit to a basically start. So maybe once we discuss with authorities and have a clear plan. We will for sure [indiscernible] give an update on this one. For PCB, we're working on it and communicated that earlier. This is complex. And right now, we are planning to go into the clinic 2026.

[Roy Buchanan, analyst]

And then maybe -- sorry, just one more on the -- I think this is what you said, but the H5N1 program, that's another target selection by GSK, so it reduces their available targets by 1.

[Alexander Zehnder, executive]

That's correct.

[Operator]

Our next question comes from the line of Mani Foroohar with Leerink Partners.

[Mani Foroohar, analyst]

Wanted to pivot over to a financial one. I'm looking at the guidance slide here, Slide 15, which will hopefully breaks out the bridge at the late '25. can you give us a little bit of granularity on the assumptions around the voluntary lever program that are baked into that? And some of the economics of where we might see -- I mean that severance expense versus some OpEx coming off as head count trends, just how that will flow through the financial statements and what your operational assumptions are for degree and tempo of uptake? .

[Pierre Kemula, executive]

Hi Mani, this is Pierre speaking. Thanks for your question. I'm not sure I understood the last part. But we -- basically, you have on this slide, I think the key elements are the key driving elements, right, that have an impact on the runway. We haven't disclosed, for instance, the PPA, the revenues, it's a consortium approach with GSK and the government. So it's difficult to comment on that. What you understand from my call is we have an extension because we don't have to expense raw materials so far this year, but we have less revenues from the PPA. So it's a net -- small net negative over the period, right? And this will be counterbalanced by, of course, I'm a focused spend, I guess, on R&D and settings that we have on the infrastructure, but also I would say, on the G&A going forward.

Importantly, as I tried to underline as well, we had a lot of swings related to the end of the COV19 first gen, right? And so these are I mean mostly behind us now, right? So I think this will help us and we talk about [indiscernible] where you'll see in documents which we uploaded tonight, we have kind of finished investing into the building and the machines, right? So this will not reproduce going forward. So this is the color I can provide.

And all these [indiscernible] minuses and specifically with the effort that we've done in terms of lighter budgets, leader budget, more efficient that Alexander was talking about, we were able to extend the run rate despite having a bit of headwind over the 2 years in PPA.

[Mani Foroohar, analyst]

Okay. And pivoting over and a quick follow-up to strategic and sort of clinical development question. When you think about the [indiscernible] technology in oncology, whether one wants to call it a personalized cancer vaccine, neoantigen therapy, whatever various competitors are calling their products now. How do you think about indication selection and to what extent is that informed by positioning indications and data from your competitors, Moderna, Biotic, et cetera?

[Myriam Mendila, executive]

Maybe I can take that. Sorry, Alex. If you're okay, yes, I can take it. I think it's a great question. And yes, we're doing all of that, right? Especially for oncology, where you could go into 50-plus tumors. And if you -- divide them into molecular subtypes, it's even more. We did a strategic evaluation over the last quarter of last year, really looking at all of the different possibilities where to go and then applying different criteria with different waiting on how to rank those and then came up with basically a list of priorities, considering commercial opportunity, considering competitive landscape available data. And that basically was an underlying basis or became the underlying basis for our oncology strategy. So we are going strategically into specific indications where we see the scientific need or the scientific rationale, the medical need, the commercial opportunity maybe also an edge versus the competitors, and that sort of like is driving how we decide into which indications we're going. Does that address your question?

[Mani Foroohar, analyst]

Yes, broadly. I guess a more sort of narrow question would be, where should we be looking for data sets from you guys, perhaps melanoma [indiscernible] elsewhere that we could look at to provide a little bit of a comparison on efficacy versus your competitors so that your stock is started getting some value for it -- sort of evaluate your opportunity to differentiate.

[Myriam Mendila, executive]

Yes. As said, right, we haven't published clinical data, right? And if that's your question. So that's why right now, those data are not available from -- basically from our cancer vaccine in the clinic, maybe I misunderstand your question, but.

[Mani Foroohar, analyst]

Yes, I'm thinking about what the timing -- how we should think about the timing when we could see a data set that we could sort of an indication where we can sort of compare it with an existing competitor.

[Myriam Mendila, executive]

That's difficult to answer question because our current trial is ongoing in glioblastoma and to my knowledge, there is no other mRNA vaccine ongoing in this space, right? So if you're specifically asking to compare our platform with other platforms. Our next Phase I trial is in planning, right? So it will take some time until data will become available, where you could probably compare [indiscernible] indications. But the one thing we all have to be cautious when you're comparing across trials, right? Because we're doing that ourselves as well when we're looking at the other data, but we realize how difficult it is to compare data in more tumor indications based on different vaccine platforms based on different assays, patient selection criteria and so on. While we all want to have and do those comparisons, we also have to be cautious that cross-trial comparisons cost-platform comparisons will have the limitation. So while I understand the need, you would like to do that, there's also a, I want to say, a limited value. So I think when we publish the GBM data, we have to take them as they are. Is this a validation of the platform? Will it show a great immunogenicity? and we will compare across other vaccine technologies, but those comparisons again have all their caviars and pitfalls.

[Alexander Zehnder, executive]

Maybe just to add -- I think, maybe just to add to that, I do believe here the MD Anderson collaboration will be able to help us a lot because at the end, we have a differentiated product. It's all about having the right antigens, good backbone, good delivery good translational capabilities. And I think this collaboration that we announced a few weeks back with MD Anderson will really help us there and create an engine for us to produce, hopefully, differentiated products that make a difference for patients, right? So I think this is something that is going to increase our capabilities a lot. It will still take some time as we alluded until we see the declaring. But at least we have a great engine with this collaboration that should help us a lot to be faster and be more efficient as well and bring differentiated products to the market.

[Operator]

Our next question comes from the line of Umer Raffat with Evercore ISI.

[Umer Raffat, analyst]

I have 3 here, if I may. First, I know you talked about your wind down of the Pandemic Agreement with the German government. How does that change your anticipated time lines to market with your COVID vaccine. I would have thought Germany would have allowed you a more rapid path to market. Secondly, for your largest and most advanced trial of everything you're running, which is a COVID vaccine, I noticed the slides keep mentioning 601 and 701 formulations, but not the 801, which is a monovalent strain that you do have also as part of this trial. Could you give us more color on the anticipated timeline, the readout of that and the specific strain that 801 covers? And then finally, on Acuitas related delay on your litigation, wasn't Acuitas only hoping to be a co-owner on your formulation patents, meaning your CG and your [indiscernible] would have been unaffected anyways. And I'm just trying to think about why all those plans were also looped up as part of the broader stay order.

[Alexander Zehnder, executive]

Thanks a lot, Umer. So 3 questions. One on the PPA and timelines, COVID-19 strain and then Marcus, I will let you comment on Acuitas and the recent updates here. So you [indiscernible] PPA. PPA should not impact the time lines at all because following the pandemic emergency procedures that were in place to accelerate some of the approvals, they are largely gone. So there's no impact at all related to PPA or discontinuing PPA in terms of time lines in Germany. Myriam, do you want to comment on your most questions on strains COVID?

[Myriam Mendila, executive]

Yes. So 601 is a monovalent train for the BA45 variant and the 701 is bivalent and 801 was the wild-type. [indiscernible] strain. So that's why -- I'm not sure I understand your question. That's why basically, there wouldn't be additional data coming. Maybe I misunderstood the question, but our focus is definitely on the updated trade. And our focus is, again, continuing to develop a monovalent strain or a monovalent vaccine that is matching the most recent COVID or corona strain.

[Umer Raffat, analyst]

I guess maybe to clarify, shouldn't the 801 or the 901 have been the XPV 1.5 instead of BA45 at this point of development?

[Myriam Mendila, executive]

Now at the time when we started this Phase I and Phase II program, actually XBB 1.5 was just basically on the rise. And yes, right, if we were to -- when we are planning for the next clinical trial, whether it's the Phase III or something different, then we would, of course, encode for whatever is the next train now XBB 1.5, but it could be until then, until we start the Phase III, the strain would have changed. So we will always uncoach again in the next wave, the most recent and updated strain that was recommended by the WHO [indiscernible]

But again, at the time we designed the study, right, the current strains in circulating strain was the BA45 variant.

[Alexander Zehnder, executive]

Marcus, do you want to comment on that? on Acuitas.

[Marcus Dalton, executive]

Yes, sure. So your question was right that Acuitas only asked for the severing of the 4 formulation patents. The court didn't want to -- so the -- let me also be clear, there is no decision yet to favor [indiscernible]. There is a decision that Acuitas can intervene is the case, but the [indiscernible] recommendations by the magistrate judge that has to be endorsed by the trial judge. And that will take some time, we have brands to object, which have to be in and then there will be a response from the other side. And so it is -- the trial is still ongoing and the work for the trial is ongoing at the moment. So you're right. Actually, Acuitas didn't ask for -- nobody asked for the stay of the whole proceeding with a decision of the magistrate judge to recommend that to the trial judge and Alexander said in his presentation, we expect that to be resolved in the next 2 months or so. In the interim, all the work is carrying on.

[Operator]

Our next question comes from the line of Ellie Merle with UBS.

[Unknown Analyst]

Hi, this is Sarah on for Ellie. I have 2. First, on COVID flu. How are you in GSK thinking about prioritizing the combo vaccine versus individual vaccines? And then are you still canting to initiate clinical development in the second half? And how should we be thinking about sort of economics here and then on your oncology program, for the date of second half, what are you looking for in particular, to serve kind of this proof of concept for your platform in oncology?

[Alexander Zehnder, executive]

So 2 questions, on COVID and how we think about combo, I guess, the second one in terms of [indiscernible] and what we are looking for in terms of the data. Maybe I can start I can start with the first one. And then, Myriam, you can comment, you can comment on the [indiscernible] so with regards to COVID, even though the pandemic has ended obviously, but it will likely -- it was likely stay with us and will require a seasonal boost of vaccination, especially for the patients at risk. And due to the continued need for the vaccines, we do believe that the COVID market is still expected to be a multibillion market. However, [indiscernible] added convenience and potential for better immunization. And it's clear for us, and I guess, from GSK as well that there is real value for a combination vaccine that will be attractive in population requiring both vaccines and mRNA technology, obviously, is perfect to address opportunities to its potency and flexibility. And GSK has repeatedly made the comment that combo vaccine and flu are a focus for them and with the expectation of $3 billion-plus peak sales [indiscernible]. So overall, we believe flu definitely still has a lot of potential, but the combination is definitely something that we're looking at very closely. And once we have the individual pieces from the 2 Phase II data, I think we will be able to provide more guidance in detail with this moving forward.

Maybe the second question in oncology, I guess, it was what kind of proof of concept data that we would look forward into then?

[Myriam Mendila, executive]

Yes. Thank you. And thanks, Sarah, for the question. So in the part A of the GBM trial, will -- because it's a Phase I dose escalation trial, primary endpoints, of course, are first of all to look at safety [indiscernible] and then we do have secondary endpoints and exploratory endpoints regarding immunogenicity. And that part A, we are looking at basically T cell activation by [indiscernible] ex vivo as well as in after in vitro stimulation. In the Part B, we do a more expanded immunogenicity testing program where we, of course, continue to look at [indiscernible] but also do more quantitative T cell measurement and a more in-depth analysis of [indiscernible] in those patients. And so that's what you can expect. And we have defined our internal sort of like hurdles we'd like to take, but I hope you can understand that [indiscernible]. I don't feel comfortable to share those. But clearly, we want to be ambitious in what we would like to see to declare that the -- especially immunogenicity data from that trial confirm basically that the platform works in oncology. But we have defined it, if that's your question.

[Operator]

Our next question comes from the line of [indiscernible]

[Unknown Analyst]

I'm Clara [indiscernible] on the half of [indiscernible] so I have to say my phone disconnected. So I really hope I didn't miss what I about ask. So I wanted to ask you if you could elaborate a bit more on the recently announced MD Anderson collaboration. So I was wondering how do you go about choosing programs and indication. Are you going to use the same strategy that Myriam just discussed 5 minutes ago? .

[Myriam Mendila, executive]

Yes. So maybe I can take this one. And so the Alex, did you want to start?

[Alexander Zehnder, executive]

Go ahead. I can add.

[Myriam Mendila, executive]

Okay, super. So with MD Anderson, of course, we discussed the selection of indications and follow the same approach where MD Anderson has their priorities, we had our priorities. And then we sort of like look what is in the -- where is it overlapping? And so we have agreed already on the indications that we will focus on our collaboration and I don't recall what our second part of the question.

[Unknown Analyst]

Oh, that was it.

[Operator]

Our next question comes from Charlie Yang with Bank of America.

[Chen Yang, analyst]

Great. I have a few, please. First one is, can you just talk about the regulatory pathway for glioblastoma trial. I guess my impression maybe perhaps was that this is going to be more of a proof of concept, but your focus will be on the other indications with the other account platforms. But if this a [indiscernible], then what would that time line kind of look like? And I guess my second question is just thinking about all the different kind of early-stage programs that you have in the cancer vaccine and thinking about the cash balance and the run rate. How do you think about account prioritization among those programs which one is kind of more important versus the others? And why not just focus on one instead of sort of kind of doing a few.

And lastly, just with hiring of kind of new Chief Business Officer, what kind of strategic deals that you -- that the company is thinking of in coming perhaps months or quarters? And how should we think about from the therapeutic count standpoint?

[Alexander Zehnder, executive]

Thank you Charlie. What was [indiscernible] GBM regulatory.

[Myriam Mendila, executive]

Yes. Maybe I can take the first 2, Alex, and then you can address the third one. So for GBM, as you rightly stated, right, for us, this is a proof of principle study. We already announced an earlier call -- disclosed in earlier calls that this is for us a trial where we are using basically our platform in oncology for the very first time. And our intention is to show it's safe and well tolerated and it's inducing an immune response against the encoded antigens. We didn't have and don't have plans to then -- to take this as a pox to proof of concept and then start a Phase II or Phase III program. If -- and you never know, right? But if we would see, which is unexpected, some strong, compelling efficacy signal, which will take time in the GBM trial because we are here treating patients that have undergone surgery so they don't have remaining tumor and hence, assessing efficacy will always be based on an endpoint-driven parameters such as disease-free survival or progression-free survival. But in case with longer follow-up, we would see something compelling, then we will revisit that decision. Right now, we are not considering to take this all the way through clinical development and into Phase II, but again, just want to use the GBM data as a proof of principle, the platform works in oncology. Then regarding the prioritization of the different oncology programs, and the sort of like cash runway we're having is, of course, something that will happen once we have the data. Right now, we have the GBM program. We are preparing for another Phase I program with a clinical candidate and the collaboration with MD Anderson is just starting, right? And we need to see if we can find antigens that will enable us to nominate a candidate. And then again, based on what I described before, different parameters, we will see what we can take to the clinics and otherwise prioritized based on the scientific evidence and the signals we've seen in terms of what we'll take into the clinic.

[Alexander Zehnder, executive]

Thank you, Myriam. And I think the last question was regarding with the incoming of the new CBO, Thaminda and strategic direction for business development or additional partnerships. I think there are a few focus area for us, one being oncology, for sure, even though we have announced the collaboration with MD Anderson, this will not preclude us from additional partnerships for these assets if they make it to through Phase II. So oncology is definitely a big focus for us in looking for additional partnerships. We also still have opportunities on the infectious disease side for programs that are not partnered with GSK. Beyond this in molecular therapies, we have a few programs ongoing that we haven't fully disclosed, but that could be interested for partnering in selected indications. So it's definitely something that we're looking at very broadly, and we are engaged and with Thaminda coming on board, we can engage even further on this.

[Operator]

Thank you. And we have reached the end of the question-and-answer session. I'll now turn the call back over to Sarah Fakih for closing remarks.

[Sarah Fakih, executive]

Thank you. 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]

Thank you. This concludes today's conference, and you may disconnect your lines at this time.