Vaxcyte Inc Aktie

At BofA, and I am pleased to be introducing our next company presenter, Vaxcyte. Joined by Grant Pickering, Co-Founder, Director, CEO; and Jim Wassil, Executive VP and Chief Operating Officer. And Grant's got a few opening remarks on state of pneumococcal vaccination space, and then we'll go into my questions after that.

Excellent. Thank you, Jason. Appreciate you guys having us here to Las Vegas for the Bank of America conference. As most people know, we have fully enrolled our Phase III program, all 3 of the Phase III studies for VAX-31. We are in the business of setting expectations around the pivotal study that will read out in the fourth quarter of this year that we call OPUS-1.

And we want to make sure people have clarity of thought as it relates to expectations around that study. The pneumococcal conjugate vaccine space has had a long history of successful reviews of broader and broader forms of these vaccines to rise to the occasion of the incremental strains that are causing disease over and above those strains in the standard of care at the time.

And what we've seen from past vaccines is a recognition that in some cases, there are missed non-inferiority comparisons. But in the scheme of the totality of the evidence, it warrants the approval and inclusion of all of the serotypes in order to produce the broadest protection possible.

And as we think about expectations for OPUS-1, we're comparing VAX-31 to not only Prevnar 20, but also Capvaxive, the 21-valent product that's out as well with equal standard of care recommendations. And so with VAX-31, we have the benefit of having 31 serotypes, which are 11 more than Prevnar 20. And in the context of having already done a direct head-to-head comparison against Prevnar 20, we saw really resounding positive immune responses from VAX-31 and very robust responses across the full spectrum of those 31 conjugates.

So as we think about an expected outcome heading into this Phase III study, we recognize that while 18 of the 20 serotypes that are in common were better than those responses in Prevnar 20. There were 2 that were lower and one was appreciably lower.

And in that context, we see that as an expected serotype for which we will miss the noninferiority comparison. It's serotype 22F. It slightly exceeds the minimum threshold in Phase II. But in light of certain uncertainties heading into Phase III, our thesis is that we should just expect to miss on that one.

But in the context of a 31-valent vaccine relative to a 20, that would be a decidedly better profile than the continued recommendation for Prevnar 20. And in the case of serotype 22F, the magnitude of the immune responses against that particular serotype are extremely high in ways that we think there would be continued confidence that we'd see effectiveness going forward.

As it relates to the comparison to the other vaccine, Capvaxive, we have, again, 31 relative to 21, so 10 incremental serotypes, which would confer an incremental 15% to 20% coverage on top of what's offered from the 21-valent vaccine. And the situation is that while both Capvaxive and VAX-31 have been compared to Prevnar 20 in well-controlled studies, we don't have a direct comparison of VAX-31 to Capvaxive yet.

We will get that data in the fourth quarter. But looking across those studies, what we see is in a number of cases, higher immune responses coming from VAX-31, but in other instances, a handful of serotypes for which we think there's a reasonable expectation that we'll miss on the non-inferiority comparisons of that handful.

But in the context of a 31-valent vaccine compared to a 21-valent vaccine, we do believe it will be a decidedly best-in-class offering in light of our expected outcomes from the study. But when we look at the specific serotypes, we do see that serotypes 3 and 8 are ones that we think we can reasonably expect to miss as well as serotypes 23B, 31 and 35B.

But I would say that the magnitude of the immune responses that we have seen with VAX-31 would suggest to us that they would meet the same relative criteria that the FDA has applied to past instances where they formally missed non-inferiority, but the magnitude of the immune responses would suggest that they would continue to offer protection and particularly in the context of a broader spectrum vaccine, one that would put VAX-31 in a position to have a best-in-class profile heading into the BLA filing.

So that's how we're thinking about it. We're calling this a handful of misses. But I should caveat, I'm sure Jason will ask this the very first question, but I'm going to preempt him. We do have the study set up such that the 11 serotypes that are in all 3 vaccines are set up such that it's an either or we need to just hit on one or the other. So in the instances of 22F, 3 and 8, we think we'll hit on at least 1 of the 2 vaccines in ways that we wouldn't expect those to come out of the study as an official miss.

So that's the way we're setting expectations heading into the fourth quarter readout for OPUS-1 for VAX-31. So why don't I stop there and move on to the balance of the Q&A, Jason.

Okay. And then as a follow-up to the Capvaxive analysis that you guys have done, is the right way to think about this, hey, this is a worst-case analysis, when you say a reasonable expectation that those 5 could be a miss -- not that there's still a possibility that you could, but you want to set the expectation and that's maybe a worst-case planning analysis?

Yes. I mean I think what we are trying to do is to remove the ambiguity out of the question that we tend to get from investors, which is how many can you miss on? And we try to be as precise as we can with that. But I think our view has been that there's been too much residual ambiguity around precisely what that means.

So in our view, this is our best expectation. And particularly for the Capvaxive situation, where you don't have a head-to-head, you have 2 different similar but slightly different OPA assays, we need to wait until the data emerges out of the study. But what gives us the most reassurance is the magnitude of the immune responses we're seeing are decidedly encouraging around the way that these are tended to be handled with regard to the actual review by the FDA.

Would these have met at 0.5 as lower bound, but not at 0.65. Is that fair to say that the heightened hurdle is impacting this?

I do think that at 0.5, we were fairly confident that we should be able to do much better, obviously, than that. I think serotype 3 may or may not miss it, but that's the only one that I think at 0.5 would be possibly a miss.

Okay. All right. And maybe before we jump into OPUS-1 and specific trial-related questions, a couple of the high-level change again a foot at the FDA. And I would imagine that perhaps leadership related headlines and overhangs on your business over the past year, 1.5 years have been more about HHS, CDC than it has been about FDA, but the latest news and how you think about that impacting pre-agreements, discussions with FDA and any approach that you're taking?

Yes. I think we've had an extremely constructive dialogue on a continuous basis with the FDA. We have the benefit of a breakthrough designation, Fast Track designation and a real recognition that expanding coverage for pneumococcal conjugate vaccines is a critical priority.

So I mean, for us, we just went through the whole process of locking down the Phase III clinical program for VAX-31 and we thought that was a very constructive dialogue. So we don't expect any changes there in light of how similar that outcome was relative to what has been the historical set of precedents. So yes, I think we're comfortable.

The other news is Pfizer's 35-valent vaccine that they disclosed. It's not in the clinic yet, obviously. But if you think about the time line for VAX-31 on market 2028, I would presume they would -- if you are successful, they may have to run a head-to-head trial against VAX-31. So maybe if you can just talk about time lines, how entrenched you need to be as a standard of care to prompt a future competitor from having a higher development acquirer.

Yes, that was big news. So as you point out, last week, Pfizer announced that they are no longer advancing the 25-valent vaccine, their fourth-generation vaccine that was expected to be going into Phase III clinical development and instead pivoting backward to a preclinical 35-valent vaccine for which they're not providing any detail. So for us, we're already in Phase III clinical development with a 31-valent vaccine.

I think, if you could imagine the optimal 35-valent composition, it wouldn't move the coverage from where we are at with our 31-valent, which is covering 95% of the circulating disease to more than 96% or 97%. So even if you could get on track with a 35-valent vaccine, as you say, it would come well after us, would likely require a direct comparison to VAX-31 for which on a relative basis, we're showing 25% higher on average immune responses relative to Prevnar 20.

And the trick has always been how do you get more of them into a single formulation without the immune responses dropping further, further and further. So I think for us, that was just -- it means we have less competition behind us. We'll find out soon enough as they tell us more about that particular program.

And if things play out as you've outlined here, right, so I guess, relative to PCV20, you have a net gain of 9 serotypes versus Capvaxive, you have a net gain of 5 serotypes. In the past few years, you've always talked about how health authorities would view that added coverage. There's obviously discussions about preferential recommendation, things like that. So maybe if you can contextualize what that clinical benefit means and how that could move markets?

Yes. I mean I would say that it's definitely not as simple as subtracting a number of technically inferior outcomes from your coverage. And I say that because for the same reason that Prevnar 13 and Prevnar 20 are what they are despite having 3 and 6 misses on non-inferior comparisons, the magnitude of their immune responses were sufficiently reassuring to the authorities that they preserve that coverage even with the misses. And that's the expectation that we're setting with our data.

So I'll give you a good example. So we talked about the expectation of missing on 35B. The magnitude of those titers are extraordinarily high. They were 11,000. So that is an extremely high titer and would be extremely reassuring to anyone who's knowledgeable in the space.

So it certainly wouldn't be the case in our mind that it would be a matter of reducing the coverage in light of those potential misses. So -- for us, we're talking about a 95% coverage with VAX-31, which compares to around 80% for Capvaxive and more like 62% for Prevnar 20. Those are massive upticks in coverage, which I think will be rewarded for when the time comes.

I'll just add that at the same conference that Pfizer is presenting their infant data next week, the CDC actually has an abstract talking about the growing trend of serotype 4 in the Western states in the U.S. and Capvaxive is missing that. So there's also that consideration that in certain regions, especially where we're in right now, it's very critical to have that type of serotype coverage as well. And so that factors into it, too.

Yes. One thing you didn't mention, but you're optimizing certain dose levels to get greater immune responses and you have statistical superiority testing also factored into the program. And so how some of those puts and takes may ultimately net out, right, in terms of the -- it's a complicated algorithm, right, to duce this down to. But I'm curious, do you think that comes into play at all?

I think so. I mean, the anxiety on the part of the regulators was with each successively broader spectrum version of the pneumococcal conjugates that have come before us have arrived with significantly lower immune responses across the board. And so they've been forced to make that trade-off between broader coverage and lower immune responses, and this is well chronicled in the space.

And in the head-to-head studies that we've done with VAX-31, we've reversed that trend. And so when we're talking about having, on average, 25% higher on relative to Prevnar 20 immune responses, you're precisely right. Many of those are because we're showing substantially higher immune responses, 7 of whom in Phase II showed statistically significantly higher. And we're expecting a repeat of that. So while we're saying we might miss on a few, we expect to be much better on many others. So that is part of the trade-off here.

And thinking about product labeling, right, because the test is you can select an eye on the weaker of the 2 on the shared strains. And so is it that there's really only risk of lacking an ability to beat either or on just one strain or...

Well, I think to your point, yes, what we're saying is that in the either or the way the study is set up, since we have 2 standard of care vaccines that are not given preferential, there are 3 serotypes for which we might miss independently, but across the 2 comparisons, we wouldn't expect misses on those. So it would really be those few that are in Capvaxive over and above the 11 that are in combination.

It's an individual comparison, but on either/or, you're expecting...

Correct. Right.

And so then presumably in showing a robust immune response even against the stronger of the 2, the expectation presumably you'd get recognition of all 31 strains in the label.

That is the expectation, yes.

I mean the precedent is others have missed in the past, but they still were able to claim that serotype in the label. So we would expect based on that precedent to be a similar position. Unless I mean, if it's a huge miss, and I don't know what a huge miss would be, but I think then there would be a debate, but I don't think we're expecting any huge misses here. They're going to be near misses.

And I guess it seems like this is more of an investor thing to prepare people for in terms of analyzing data. As you think ahead to the infant program when you move to pivotal, do you think that the higher non-inferiority thresholds are going to be applicable in those Phase III studies as well because it seems like that's kind of the main drag here.

Yes. So the rationale behind the increase, the higher bar for adults was really driven out of the regulators' concern that in the adult space, you don't have a clear bright line on what is a sero protective threshold. If you're above a particular level, they're reassured. But as you get closer and closer to lower levels, that's anxiety-inducing. That's why they wanted to see the bar raised.

In infants, it's a different set of circumstances. The 3 field efficacy studies that were ran back in the day when Prevnar was first approved showed that there was a very clear bright line for which over a certain magnitude of IgG antibody titers showed protection in the field efficacy studies. And so there isn't the same question of titers that aren't correlated, how far can they go? These are correlated to protection in infants.

So that's one of the reasons why they regulate the infant vaccines differently than the adults. They actually require separate IND filings. And so that for certain means that, that endpoint won't change. There is a comparison of the antibody titers as part of the pivotal study design for infants. So there is some possibility they could raise that bar for the second of the 2 co-primary endpoints, but it's not a given.

Okay. So then assuming clinical success in the fourth quarter with OPUS-1, just remind us the sequencing of the other 2 registration-enabling trials, when the earliest possible filing could be and just remind us your FDA discussions, I think you're shooting for greater than 3,000 patients with the safety database to satisfy what the regulators need, but just confirm that.

So I mean it's a pretty standard number of subjects you need. You need 3,000 subjects exposed with your final manufacturing formulation for safety. You've seen our OPUS-1, our OPUS-2, OPUS-3, we go well beyond that minimum requirement. We've had these discussions with the FDA already.

In terms of timing, we said OPUS-1 comes towards the end of this year in the fourth quarter, OPUS-2 and 3 in the first half of next year. And then we will have one more additional clinical study that we will do, which is a manufacturing consistency. The other requirement the FDA has is that you demonstrate with your commercial process that you can manufacture multiple batches and do it and get consistent clinical results. And so that will be our final clinical study, and that will gate us to our ultimate BLA submission.

How long would that take the manufacturing study?

Relatively speaking, it shouldn't take very long. I think you're talking maybe 1,500 subjects, give or take, about 500 per arm, and it wouldn't necessarily have a comparator this time. So same thing, you do the study, you do 1 month later, you're still going to have to do the 6 months for safety. I would expect us to be able to have the serology and the safety all done within that 6-month period after the last subject.

Is that something that you can expedite or move faster? Or do you need to wait for some of the OPUS studies before you can start that manufacturing study?

No, we don't need to wait for those other studies to start that. I mean the expectation is that we'll be able to get that study started in due course and have it dovetail into the anticipated BLA filing late next year.

Okay. All right. That's what I was trying to get at. All right. Let's see. So post-marketing commitments to FDA, I know that, that was sort of part of the rumblings about how things are changing. How are the post-marketing commitments different at all from like what you've seen Pfizer and Merck has to do in the past?

So I'll caveat this by saying traditionally, a lot of your post-marketing commitments are one of the last things you negotiate. And the reason is the FDA wants to see the totality of your clinical package before they impose any of those additional requirements. That said, we've had some discussions already. We're comfortable that we're going to do a post-licensure test negative design study to demonstrate efficacy against pneumonia or effectiveness since it's post-licensure.

Similar to what Merck had done as well. And of course, as with every vaccine, an extensive safety follow-up will be also required to ensure that when you go into a larger population that's not controlled in a clinical study that you still have the same safety that you reported in your clinical trials.

Now maybe just a commercial question. How big do you think the adult market is today? I mean we could take the CapEx of revenue. What we don't know is how much that's taking from the Prevnar franchise. And then we have the -- over other -- others have a catch-up market too in there. So how do you disentangle that? And do you have a sense of like what the size of the adult market will be steady state when you're ready to go to market?

I think in this moment, our belief is it's about 1/3, 1/3 and 1/3 between the infant market, the adult market and then the international opportunity. So yes, I mean, Capvaxive has had a really good start. It doesn't appear to have eaten into Prevnar's revenues materially. So it seems like it's incremental growth of the adult segment, which is what we have been expecting for quite some time.

So that is going to be -- so the adult market is going to be the fastest-growing part of this market. It's an $8 billion segment today. It's anticipated to grow to $12 billion. And so the question is what portion ultimately will the adult market take? It's -- I think it's going to approach 50-50, probably won't get all the way there, but could get somewhere close to that eventually.

Okay. And then as we sit here a year from now, you guys are going to be close to hopefully a BLA submission and becoming a commercial entity. And so talk about the infrastructure build between now and launch. What are going to be some of the capital commitments and big hurdles and milestones to having your manufacturing between Lonza and your U.S. facility all teed up and buttoned up and ready to go?

Yes. So we've been spending a lot of time benchmarking, building out the initial leadership team for our commercialization effort. Jim is spending a considerable amount of time. The beginnings are usually with regard to thought leader development. And so the medical science liaisons group is growing, and that will be the initial outreach.

And then over time, we'll begin to scale the balance of the organization. But our view is that we can handle a launch of this complexity. I think with the -- well, we've been able to look at the uptake for Capvaxive, which has been quite impressive, and that's a product that has limitations. And with a product like VAX-31, we see a great opportunity to bring a better product to market, and we'll do everything required to deliver on that.

Okay. Maybe pivoting to the infant program and talk a little bit about the Phase II trial, which will read out next year. These trials are obviously underpowered, can produce results if you look across the history of Phase II infant studies that may be difficult for some investors to interpret because there's a lot of different comparisons. There's a post-dose 3, a post-dose 4 assessment here.

And so just maybe level set in terms of to what extent you expect carrier suppression maybe plays an issue in a Phase II study and just the noisiness and how to -- how would you kind of coach investors through that one?

Well, there's no question it's a lot more complicated to describe than the adult setting. In the adults, you give 1 vaccination. 1 month later, you get the antibody responses and there you have it.

As you say, with infants, it's considerably more complicated. They get 4 vaccinations. We only take 2 immunological readings after the third and the fourth dose. So yes, it is more complicated, but we've got a fair amount of time. We're not going to read out the study until first half of next year, and we haven't decided definitively if we'll take advantage of the fact that there is a chance to look at the first endpoint prior to the boost data. You don't have the whole story until you see the boost data.

So we've guided that we will get specific about our unblinding plan. But in any case, we'll have the full measure of that study by midyear next year. So we have quite a bit of runway to set expectations. But in this moment, we'd just say our VAX-24 data that read out last year was really encouraging. We think we have a path to the market with our 24-valent vaccine.

As it relates to carrier suppression, we've seen even less manifestation of carrier suppression with our vaccines in infants than we had seen in adults and that being in the context of having shown substantially less carrier suppression than others. So we're seeing the benefits of the design of our pneumococcal conjugates as we built them to avoid carrier suppression. But VAX-24's data looks really encouraging in the context of that carrier suppression. We're confident that we can add these additional 7 conjugates on top to get to VAX-31 and get them to be immunogenic across that spectrum.

We did have a handful of misses in the VAX-24 data. Fortunately, they were not on key serotypes that are circulating in any relevance. So we have a really good base to work from. We are testing higher doses with VAX-31. We've seen really nice dose response to improve immunogenicity with higher doses. And in this study, we're testing multiple higher doses. So the hope is that increase in antibody responses could rescue some of those serotypes for which we had missed. But if we deliver on the incremental serotypes on top of Prevnar 20, which is today's standard of care, it would create a major opportunity to expand coverage, again, from around 60% to 90%, which would be a massive increase, and that will be driven by the incremental serotypes.

And then across the common 20, we had already shown improved immune responses on the most important circulating serotypes. It was really on those ones that were not as strategically important, where we missed. And if we can improve any of those, it just strengthens the set of arguments as we try to deliver VAX-31 not only to adults, but to infants. So that's the best I've got today, but...

And on those 5 that VAX-24 where there are the misses, just for our understanding, talk about which of those you're pushing dose to potentially mitigate that?

Yes. So in the context of the doses, so just the order of how we've progressed, we took VAX-24 into adults first. We got our first clinical data. We showed with higher doses, we saw improved immune responses. So when we moved VAX-31 into adults, we kept pushing the dose upward and kept seeing more and more data associated with higher dose equals higher immune responses.

So when we got the first infant data with VAX-24, we did see room for improvement. And so we already had VAX-31 at higher doses, then we added an increment over and above that. And so I think our view is that we already had in the -- in one of the formulations, higher doses for a few of those serotypes that did end up showing room for approval -- room for improvement. And then when we added the optimized dose, Jason, on top of that, all those that showed room for improvement, we moved up to the high end of the range. So we'll have multiple shots at higher doses to produce the best profile possible coming out of Phase II.

Yes. Okay. And then lastly, I mean, we have 30 seconds here, but just beyond Pfizer and the stated ambition to have a 35-valent, your just general understanding of who you view as competitive possible competitors at least with a 30 handle or a 3 handle on their serotype coverage?

Yes. So I mean, so we've got GSK with their affinity bound constructs. They are in a Phase I study with a 30-plus valent vaccine. So they're in early-stage clinical development, then you've got Pfizer in preclinical. But I'd say the issue that people have found in adults is they're mixing multiple protein carriers, and that's turned out to be really problematic.

I know we're running out of time, but there have been multiple attempts at that. No one has succeeded. We have the benefit of not needing to try to mix in something new and exotic to expand coverage to the 30s. So yes, there are people trying, but we'll see.

We're out of time. So gentlemen, thanks so much for joining us.

Thanks for having us.

Good afternoon. My name is Chloe, and I will be your conference operator for the Vaxcyte Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] Today's call is being recorded.

I will now turn the call over to Andrew Guggenhime, President and Chief Financial Officer of Vaxcyte. 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 Wassil.

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 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, 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 PCV 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 PCV market, driven by expanded age group recommendations in the United States and increasing international adoption of adult PCV vaccination.

Continued momentum in the PCV class has reinforced the size of the opportunity and demand for a PCV 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 II 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 III 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 noninferiority study and expect to announce top line safety, tolerability and immunogenicity data in the fourth quarter of this year. In January, we initiated OPUS-2, a Phase III 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 II 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 II 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 top line safety, tolerability and immunogenicity data for 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 PCV candidates throughout the developed world.

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

To advance commercial readiness, we began to scale the organization, including the appointment of our first Chief Commercial Officer, Mike Mullette, and the initiation of launch planning activities in earnest. These actions reflect our conviction in the long-term potential of our PCV 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 III program, the infant program and an important update on VAX-A1, our Group A Strep candidate. Jim?

Thanks, Grant. I'll start with an update on our VAX-31 adult Phase III program and then turn to our VAX-31 infant Phase II program and broader pipeline.

Beginning with adults, the Phase III OPUS program represents VAX-31's transition into late-stage development and is designed to support a planned BLA submission. The Phase III 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 sets across relevant adult populations and real-world vaccination scenarios.

OPUS-1 is our pivotal noninferiority 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 PCV20 and Capvaxive or PCV21, which are the current standard of care PCVs for adults. We remain on track to announce top line data in the fourth 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 the adult pneumococcal vaccination.

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 licensure. In the case of PCV20, they focused on making incremental serotype additions to PCV13, but fall short of coverage of the 31 serotypes in VAX-31.

For PCV21, while it covers a greater percentage of circulating disease than PCV20, 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 PCV20 and PCV21 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 serotype basis 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 BLA submission and with 10 or 11 incremental serotypes over our study comparators, we believe VAX-31 has the headroom to miss on a handful of individual serotypes without risking the ultimate goal of licensure with what we believe is a 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 VAX-31 when administered either concomitantly with or 1 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 VAX-31 in adults who have previously received lower valency pneumococcal vaccine. This descriptive study is intended to evaluate the safety, tolerability and immunogenicity of VAX-31, including whether VAX-31 can boost serotype-specific immune responses while providing the broadest coverage in a single vaccine in this adult population.

OPUS-1, -2 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 II dose-finding study with final data confirming dose-dependent immune responses and the safety and tolerability profile consistent with the standard of care comparative. As Grant noted, we used those learnings to modify the ongoing VAX-31 infant Phase II 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 dosed.

In U.S. children, VAX-31 is designed to cover over 90% of IPD and acute otitis media due to strep pneumoniae, 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 plans for this study.

Beyond our PCV franchise, you will recall that we made a decision to pause non-PCV pipeline programs last year. I'm now pleased to share that we plan to resume development of our most advanced preclinical program, VAX-A1 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 I 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 investigator 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, 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 VAX-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 investments in commercial manufacturing readiness and advancement of our clinical programs. R&D expense growth reflected manufacturing scale-up and validation activities and late-stage 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 10-K 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 VAX-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 VAX-31 adult Phase III studies and the Phase II infant study.

Within manufacturing, there are several initiatives running in parallel, preparing for the potential VAX-31 adult launch at the current Lonza 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 fill-finish 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 build-out of a dedicated large-scale manufacturing facility with Lonza. 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 PCVs 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 late-stage programs.

And with that, I'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 into late-stage 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 PCV 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] We'll take our first question from Roger Song with Jefferies.

Two from us. One is for OPUS-1, how is the study powered to show the statistical noninferiority against each the comparator independently? Just curious if FDA look at the subpopulation they want to show the noninferiority against either Prevnar 20 and then vaxive (sic) [ Capvaxive ] independently, would you be able to show that?

And then the other thing is since you have -- you're about to reach alignment on the manufacturing consistent study as the last phase of -- last Phase III study. Just curious what's remaining to be discussed? Would that involve the U.S. and ex U.S. regulatory? That's it.

Yes. Thanks for the question, Roger. The first question was about OPUS-1 and the powering. I think the first key thing to point out is that we locked down that pivotal Phase III study in consultation with the FDA. The noninferiority, 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 noninferiority.

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 Capvaxive. 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 3 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 II. We're quite confident there.

And then as it relates to the exclusive serotypes in VAX-31 and Capvaxive, 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 mean fold rise over baseline. And 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 serotypes 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 know we don't need to be perfect. We believe even if we were to miss on a handful of comparative serotypes 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 3 OPUS studies that are already underway and enrolling. And I would say, those conversations with the FDA are moving a pace. They're constructive.

And the real key agreement that we reached last summer was the ability to advance into Phase III 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.

We'll take our next question from Jonathan Miller with Evercore.

Looking forward to the, as you say, catalyst-rich time coming in the next 1.5 years. I would love to ask, first, you mentioned the 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 it 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 VAX-31 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. Jon, thank you for the question. And indeed, we're really excited about the catalyst-rich year ahead for us starting in the fourth quarter and then into 2027 with the 3 readouts we expect then.

So as it relates to the OPUS-3 study, which is the one that we'd set up for a catch-up recommendation where we're giving VAX-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 serotypes 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 serotypes 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 Capvaxive 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 broadest 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 Capvaxive 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 serotypes 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 serotypes 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-valent.

And then as you'll recall, the 20 for which we have compared already in the context of the VAX-24 study, most of the serotypes looked great for our product. There were a handful that showed room for improvement. Fortunately, for us, they were key circulating strains. But what we're looking to show is continued strong, robust responses on the serotypes for which there is 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 VAX-31 Phase II study that are using higher doses for any of these serotypes 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 noninferiority comparisons already in this segment. And 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-vallet vaccine that increases coverage from in the 60th-ish percentile of circulating disease to the 90th-plus percentile of circulating disease, that would be a huge step forward for the class.

We'll take our next question from Salim Syed with Mizuho.

This is Erik on for Salim. Yes, 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 immunogenicity? Do you think that longer-term, all things going well with Phase I, Phase II that you might expect to run an efficacy trial for Phase III for submission?

Erik, thank you for the question. I'm going to hand it off to Jim in just one second, but I really appreciate the acknowledgment around VAX-A1. 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 yes, 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 I. Jim?

Thanks, Grant. Erik, our plan is to start in adults with the safety assessment. We will 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 that 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 III. 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 Erik, this is Andrew. Consistent with prior practice, we've obviously guided to initiating the Phase I 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.

We'll take our next question from Seamus Fernandez with Guggenheim Securities.

This is Evan Wang on for Seamus. Just 2 for me. Just one follow-up on Group A 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 either the vaccine or development path?

And then on VAX-31, can you just describe some of the work with respect to the pre-commercialization planning underway now and some of the regulatory discussions around post-marketing efficacy studies? And then maybe on the post-marketing studies, just how we should be thinking about how you're tackling these versus to some of what we've seen in the past from Merck or Pfizer.

Yes. Maybe I can take the second one first and then pump the first to Andrew. As it relates to the post-marketing 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 Capvaxive, 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?

Yes. Yes, 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 VAX-A1 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 PCV franchise, which, of course, remains the biggest value driver.

And 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 PCV franchise that we can continue to deliver on with cash now through at least the end of 2028.

We'll move next to Carter Gould with Cantor.

Congrats on all the progress. Looking forward to exciting 2026. Back to OPUS-1. 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 comparisons against PCV21 given its importance in IPD prevalence. And maybe just speak as well to the commercial importance of demonstrating noninferiority there to avoid counter detailing.

Yes. Thank you, Carter. Appreciate the question and the recognition of the moment for us. Yes, 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 serotype that despite its inclusion in the marketed pneumococcal conjugate 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 yes, serotype 3 is just the 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 protected threshold. So we've seen this play out already. When the 15-valent from 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 has 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 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 Capvaxive. 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.

We'll take our next question from Jason Gerberry with Bank of America.

Congrats on all the progress this quarter. This is Dina on for Jason, by the way. I guess, maybe just a follow-up on the prior discussion of the various OPUS-1 data scenarios. You've 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 VAX-XL. 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?

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-1, I'm glad the base 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 2 currently recommended vaccines for adults, Capvaxive 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 serotypes, 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, coverage, 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 II data relative to Prevnar 20, where we showed consistently higher immune responses across an array of the common serotypes along with an 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 II 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 training coverage for lower immune responses. So we've really flipped the script on being able to have the opportunity to demonstrate both.

So yes, 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 you also asked about VAX-XL. That's our third-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 U.S. and in Europe, respectively. There really isn't enough headroom to warrant bringing out a third-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 serotypes for which may circulate and having readiness to add them on top of VAX-31 to have this third-generation program move forward into the clinic in earnest at the appropriate time.

We'll take our next question from Tara Bancroft with TD Cowen.

So I feel like we have a pretty good grasp of data expectations, your regulatory commercial readiness. So I kind of 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-1 data?

Thank you for that question, Tara. I always appreciate you being a student of the vaccine space. So yes, 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 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 BLA, but then also in the context of the recommending bodies as they determine how to slot VAX-31 into the schedule.

And so OPUS-2 and its 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 OPUS-3 study is perhaps a more strategically important outcome. And 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 yes, if I had to pick 1 of the 2, I think it's OPUS-3 that could unlock the most commercial potential for the company.

Okay. Great. And I also -- I have to say, specifically to Jim, I'm very happy for you guys that you have strapped back.

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

We'll take our next question from Asad Haider with Goldman Sachs.

Congrats on all the progress. A lot of mine have been answered already. Just 2 quick ones. First, just on the infant program, what factors are you considering in 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?

Maybe I'll take the competitive landscape question and then hand the question about the trade-offs to Andrew in just a moment. So yes, I think as it relates to the competitive landscape, Asad, we're in front, right? We've got 2 vaccines that are the standard of care today. One is a 20-valent, the other is a 21-valent. Our 31-valent is in the midst of its Phase III 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 I. They just announced today the initiation of a second Phase I study on top of the Phase I 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 I safety data by the end of this year. And of course, we're anticipating having the outcome of our pivotal Phase III foundation of our BLA 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 II, which is a 25-valent vaccine. And as we understand it, there are as many as 15 different formulations currently in Phase II for that program. So it sounds like they're still working it out.

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 yes, 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?

Yes, sure. And thanks for the question, Asad. And just to set the context, as we've said, right, 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 data in advance. And of course, if we can blind it, we would announce when it's a 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 II meeting? Would it allow us to initiate a Phase III 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 kind of declare what our plan is by mid this year.

We'll move next to Tom Shrader with BTIG.

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 2 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 immunogenicity 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?

Yes. Yes, Tom, 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 Merck 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 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?

Yes. 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 up 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, 20, 21 that they would be getting and not have any hyporesponsiveness. 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 have been previously vaccinated.

So if you get more breadth, the bar for common serotypes is just be no harm. Is that?

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 the immune response, but you haven't with PCVs. So I think that's the bar we're hoping to achieve.

[Operator Instructions] We'll move next to Joseph Stringer with Needham & Company.

You commented that FDA has historically required greater than 3,000 patient exposures from a safety database perspective. It sounds like you'll have more than that in total from your Phase III 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.

Yes. 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 3 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 yet, like Grant said, we're going a little bit above to make sure we get a really robust label. And I'll leave it at that.

Yes. 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 Instructions] And we'll take our next question from David Risinger with Leerink.

I'm [ Edward ] calling in for David Risinger. So just a quick question on PCV uptake for those who are like 50 years old and above. What is the current trend right now?

Yes. Thank you for that question, Andrew (sic) [ Edward ]. I think I will turn that one over to our Chief Commercial Officer, Mike Mullette, 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?

Yes, sure. So first of all, thanks for the question. It's I think, a really exciting time and opportunity for commercialization of VAX-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 Capvaxive has been able to achieve, again, solidifying this market dynamic of shifting from lower serotype vaccines to higher serotype vaccines. We continue to see Merck 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 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 VAX-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 VAX-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. Yes, I think I would just want to caveat that the U.S. 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 sometimes 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 Vaxcyte fourth quarter and full year 2025 financial results conference call. Please disconnect your line at this time, and have a wonderful day.

Welcome, everyone, to Jefferies London Healthcare Conference 2025. My name is Roger Song, one of the senior analysts covering SMID Cap Biotech in the U.S. It is my pleasure to have the fireside chat with our next company, Vaxcyte. Welcome, Grant and Andrew.

Thank you, Roger. Pleased to be here.

Awesome. All right. So for people maybe not familiar with Vaxcyte, which should not be the case, but give us some maybe updated elevator pitch for Vaxcyte and where the current state of union.

Yes. So if you're new to the Vaxcyte story, we are focused on developing a 31-valent pneumococcal conjugate vaccine. We have a proprietary foundational platform, which is a cell-free protein synthesis platform for which we are able to develop conjugate vaccines that are sites specifically joined in ways that we think we can increase coverage without sacrificing immunogenicity as it relates to pneumococcal conjugate vaccines, but also unlock novel vaccines, including a group A strep vaccine we have in preclinical development. So we're mostly known for the pneumococcal conjugate vaccine franchise.

Our 31-valent vaccine has read out an extremely positive Phase II outcome comparing to the standard of care 20-valent vaccine. And we're about to initiate Phase III clinical development for that program in adults, and we have a Phase II program underway in infants with that same 31-valent vaccine.

Excellent. Okay. So it is a very focused story for pneumococcal conjugate vaccine. And then we know this is $8 billion to $10 billion growing market. And then historically, it's a winner takes all. That's why people are really looking for best-in-class profile, which speaks to broadest coverage without sacrificing the immunogenicity. That's what Vaxcyte is striving for. So maybe just an additional kind of high mark there.

And then let's just focus on the program. So it is bifurcated by age group. One is adult and then the other maybe older adult and then the other one is for the infant, maybe focus on the adult. It is in late stage. You have been talking with the FDA, finalized the Phase III and you're about to start the Phase III pretty imminently. So what's the gating factor outstanding steps you still need to finish before you can start the Phase III?

Yes. So we're pretty much there. We have guided to be initiating our Phase III pivotal study for VAX-31 in December of this year. So that's right around the corner. So we will be making the announcement of that study as we vaccinate the first subjects in the study. So you can look out for those details in relatively short order. And I appreciate the assist on some of the comments. But yes, we're extremely exciting and gratified to have seen the results we've seen with our 31-valent vaccine. And what usually characterizes a dominant position in this class is simply the coverage advantage that one vaccine has over another. And what's unusual about what we have been able to do with our 31-valent vaccine is not only expand coverage relative to the current standard of care, but also show better immune responses in a head-to-head comparison.

Usually, you're sacrificing one or the other, and we have the benefit of that combination of both superior coverage and better immune responses. So we're looking to replicate that in Phase III. There are 2 standard of care vaccines that are currently available today. One is a 20-valent, the other is a 21-valent. And what we haven't said yet is which of those 2 or if we will be looking at both of those in the Phase III study, but that will be one of the things that we put out in the next month as we get the study started.

Okay. Great. And then by the way, the profile is supported by the Phase II data you already shown pretty impressive in the adult population. Okay. Good. And then maybe just remind, I say this is $8 billion to $10 billion growing market. Historically, infant is getting a bigger portion of the market, but adult is actually probably underappreciated by a lot of investors because it's growing, particularly with the recent ACIP kind of the universal recommendation. How do you think about the adult market for PCV? How big that could be? And then how much credit you should get that?

Yes. So historically, the market has broken out with infants and adults. It's been about 80% infant revenue. So Roger has it right. It's $8 billion run rate for the current market today. About 80% of that is in infants, 20% of it is in adults. But the expectation is that the adult market is going to grow quite quickly. So historically, the United States has been the only country that has universally recommended vaccinating adults, and that's changing very quickly. Most of the developed countries, particularly those in Europe, Asia, Australia, have recently made recommendations for universal vaccination for pneumococcal conjugate vaccines for adults at various ages, usually 60 or 65 and up.

So in Pfizer's most recent quarterly update, their international sales of Prevnar went up 17% in the last quarter. So we're really seeing a new wave of appreciation for the impact that these vaccines can have in adult. Looking forward, it's hard to know exactly how it will play out, but the expectations are that this market in the next 5 to 10 years will grow from $8 billion a year to more like $12 billion to $15 billion. We could see that end up with somewhere around 50-50 split between adults and infants ultimately. So having the best-in-class profile with our 31-valent in adults is quite exciting given the anticipated revenue growth there.

And I might just expand on that, Roger, the U.S. market, that's also one of the key drivers of the expectation of the growth in this adult market. Historically, the recommendation in the United States has been to vaccinate adults upon turning age 65. Just a year ago, they lowered that recommendation from 65 to 50. Obviously, you have more Americans entering the age of 50 than you do 65. You have this bolus population of 63 million Americans that now become immediately eligible for vaccination. So it's expected that, that bolus population will be kind of vaccinated or a good proportion over the next several years. We think we'll be able to participate in that upon approval, if we're fortunate to get there with our VAX-31 program.

And then this market in the United States is setting itself up for what historically has been a 1-dose market to a prime boost market where Americans would get vaccinated with the initial dose upon turning age 50 and would need likely to be boosted as adults immunosenescence at about the age of 65. This was discussed among ACIP about a year ago, and the discussion was tabled until broader valent vaccines become available. And we think the potential approval of our VAX-31 adult program would be the impetus for revisiting this discussion to boost adults. And again, that is one of the 3 key drivers of the expected growth in the adult market.

Yes, exactly. So the adult market is growing in a very rational way, right? So with all the supporting evidence, they will become a bigger driver. I think start from 80-20 to 50-50. And then in a growing market, the adult market is pretty sizable, already very sizable and even more significant in the future PCV market. Okay. Good. So that makes this adult program is maybe more critical than investors thinking because people say, okay, infant is the bigger driver, but actually adult in the future can be equally kind of important program.

Okay. Got it. And then we have to ask this kind of because you're in vaccine space and we know a lot of FDA and the CDC, a lot of the change in the political and the policy environment. Anything recently you can give us an update in terms of your interaction with the regulator or the policymaker? Anything we should know?

Yes. I mean maybe I can start and you can finish. Just by virtue of us being able to guide to initiating the Phase III clinical development means that we've had those end of Phase II conversations with the FDA. And while we're stopping short of providing the finest detail of our Phase III pivotal study that we're getting underway, what we have said publicly is that through the course of these conversations that we've had with the FDA, there's been no mention of any necessity for a field efficacy study or a placebo-controlled trial nor have we had any suggestion that we would need to produce a safety database that would be out of the norm for programs like this. So we're decidedly reassured that it's been primarily business as usual as it relates to the regulation of this class of vaccines.

Yes. And I would just add, the team with which we've been working at FDA has largely remained unchanged pre-administration to the current administration. Of course, we've been dialoguing with the FDA really since the IND submission a few years ago, certainly more recently in the context of this Phase III trial that we're now poised to start. So we haven't seen a material change in the team nor in the tone and tenor of this conversation. So there have been -- there will continue to be interactions with the FDA as it relates to both of our adult and infant programs in normal course.

And then clearly, given the dynamic, we are investing to build relationships with folks in the executive branch in Congress as well as the agencies to continue to advocate and remind folks of the importance of vaccines and protecting our population as well. And those have been constructive dialogue as well. Certainly monitoring what is happening externally, but very involved from a government and public affairs standpoint to be apprised of what is happening as best one can as well, as I said, to build important relationships there.

Got it. Yes. Okay. And then just back to one of the components you say you will be -- you were disclosing, which is the comparator for the Phase III study. Does that really change any study design or the size of the study if you want to do one or both selections that create more complexity? Or it's -- no matter which FDA you agree with, and it's not changing any kind of like of success or the time line or the size of the trial?

Yes. So in the moment, the current standard of care includes either Prevnar 20 or the 21-valent vaccine for Merck, which is called Capvaxive. So for us, we believe we have the best-in-class vaccine. Our Phase II study was conducted comparing VAX-31 to Prevnar 20. We showed on average a 25% higher immune response on the common serotypes. So we know we have an immunogenicity advantage and a coverage advantage based on the Phase II outcome. We're also able to look at the Capvaxive pivotal studies for which they compare themselves to the same comparator, Prevnar 20.

And when we look at those relative immune responses, the advantage that we're seeing with the responses to VAX-31 only go up relative to Capvaxive when we look at that sort of transitive comparison. So our view is that we could compare to either of those vaccines using very similar powering and sample size. The conventional cohort size in this class is around 850 to 1,200 subjects per cohort, and we've been guiding to staying within that range.

Awesome. Great. Okay. So -- and then we should move on to the infant program because you had a recent Phase II from the VAX-24 and then with the full data from the PD3 and PD4 Phase II data. So what did you learn from that trial and then the most recent, this full data and then you apply the learning to the Phase II VAX-31 program, which will have later.

Yes. So going back a bit, our first clinical program in our pneumococcal conjugate vaccine franchise was a 24-valent vaccine. So we had originally gotten positive adult data for that program in late 2022. We then quickly advanced our 31-valent program into adult studies and showed that with incremental conjugates, 7 more do the math, we could not only get broader coverage, but we're able to maintain high immunogenicity and even to push to higher doses to drive even higher immunogenicity. So we had a lot of learnings as we were able to graduate from 24 to 31-valent coverage in the adult category. In this moment, we have read out the VAX-24 infant study. We have already initiated the 31-valent infant study. And the big learning was that in this naive infant population, driving the right amount of protein carrier will deliver the right sort of prime and boost response that you want to see to deliver durable protective responses.

So we have already shown that our 24-valent vaccine has shown adequate immunogenicity and an improved coverage profile relative to today's 20-valent standard of care. Now the opportunity for us is to graduate to the 31-valent vaccine. So we have taken certain learnings from the data that read out for VAX-24, and we've incorporated higher doses in the VAX-31 study that we think will put us in a position to graduate to the VAX-31 program to deliver meaningfully higher coverage than what we would be able to deliver with VAX-24. And given the sort of relative immune responses we've seen in adults, we have confidence that VAX-31, once it reads out, will give us an opportunity to upgrade to that program for the Phase III advancement.

Excellent. Yes. So I think the Phase II VAX-24, the purpose always kind of to learn a little bit more about this -- the profile and then to apply -- eventually, you want to do the 31 and because this is standing -- establishing a bit higher kind of barrier of entry for the competitors.

Yes. So the coverage advantage, like for VAX-24, it's only a modest coverage advantage. But when you look at the 31 valent and compare it to the 20-valent that's currently available, you go from around 60% coverage of circulating disease to 90% to 95% coverage for our 31-valent vaccine, which would be a massive upgrade in terms of the amount of disease that we could prevent with that 31-valent program.

Excellent. Okay. So you're running the Phase II recently you add another high-dose cohort, which increased the likelihood of success for that program. So what will we consider a winning scenario for that data readout in the coming years?

Yes. I mean, the way we think about the composition of the vaccine is there are kind of 3 different buckets of the conjugates that are in the vaccine. So we have 11 more serotypes in VAX-31 than we'll have in the comparator 20-valent vaccine. Those should have a relatively straightforward opportunity to show the sort of effect that would warrant inclusion in the vaccine. So that's a lower bar. Then there are those serotypes in the 20-valent vaccine that are still circulating in earnest. And we already showed with the VAX-24 data that we showed really good relative immune responses on those. It just so happens that it was the serotypes in the current vaccine, the 20-valent that aren't circulating where we showed weaker relative immune responses.

So if we could have picked any to where we looked a little worse, those were the ones because they're not relevant if they're not circulating. So by increasing the doses in VAX-31, we think we can do better from an immunogenicity perspective, but the only area for improvement were in those serotypes that are no longer circulating. So what I would say is even if we had a few misses on these serotypes that are no longer causing disease in the context of a 31-valent vaccine, that would be very much a winning hand on a relative basis. And every version of increasing coverage vaccines in this class in infants have shown some misses, but it's more than counterbalanced by the incremental coverage that the newer vaccine is able to deliver.

So we have that sort of same opportunity with us, but in the context of data that's already shown us we're on track it's just a question of how much of a coverage advantage will we be able to deliver.

Excellent. Okay. And then this infant program is a multi-dose, right? So they have a prime 3 doses and then booster the final dose that we call PD3 and PD4. You say you will release those 2 data set by first half 2027. Now strategic decision you will make is if you will separate them or report them together, what's the criteria you will do? And then how likely you will start to see those blinded data and help you to make that decision?

Great. Yes. And just to level set, just to reinforce what you said, Roger, what we have said publicly is we expect to be in a position to disclose the PD4, the booster data by the end of the first half of 2027. And that will either be concurrently with the PD3 data or there's a scenario under which we would unblind and therefore, also disclose the PD3 data prior, which would be about 6 months, plus or minus before then. There's no scenario under which we would unblind the PD3 data and the wait to disclose it. If we're going to unblind it, it's material enough data, we would disclose it. And for us, there are a few factors at play, kind of the 2 most relevant are which just what do we believe is the right communication strategy. Both data sets are required to get a true picture of the total profile of VAX-31, both data sets are required to put together a package to submit to FDA for an end of Phase II meeting.

And so there's the communications component. There's some minor but not material operational component. The other component is we'll be -- we're enrolling in this infant study right now. We'll soon be enrolling in a number of adult studies that collectively comprise our VAX-31 adult program. And the immunoassay work, the serology work is conducted by vendors that serve both our adult and infant studies. So that will also have an impact in terms of when we'd be in a position for not only the infant, the adult studies to have the data.

So you should expect in the early part of next year, not necessarily in January, but the early part of next year, once we're further down the enrollment pathway and have really had a full discussion on the communications to announce what the plan is in terms of the unblinding and result and disclosure strategy and what the expected timing of those would be depending on where we land.

Yes. We'll stay tuned, right? So in terms of strategy and then you'll give us a little bit more guidance. Just curious about how you're going to make that decision. Maybe you will tell us kind of a little bit more specifics later. Okay. Good. So that's that. And then obviously, this is a Phase II and then after this, you will end the Phase II and just follow the same kind of playbook as the -- move forward, this is a vaccine space and the vaccine play and then the manufacturing matters a lot. I know you've been building out the manufacturing. So where you are for that? And then what's the CapEx right now? And then what you're about to spend a little bit more on the manufacturing part?

Yes. So we have already made a very fulsome investment on the manufacturing side. So we entered into a working relationship with Lonza almost a decade ago, and we will be launching initially out of multipurpose facilities at Lonza for which we've made many, many batches of the vaccines over the preceding years. But we recognize that in those multipurpose facilities, the capacity isn't there to be able to meet the full demand that we could expect for our vaccines. So we recognized that a few years ago.

We expanded our relationship with Lonza and have invested in a dedicated larger capacity facility that we will bring online shortly after the launch in adults and certainly in time to support the launch in infants, where, as you say, they get 4 doses, adults only get a single dose. So you see a really major uptick in the demand for doses associated with the infant indication. So we've mostly completed that facility construction. And maybe I can hand it to you to talk a little bit about the CapEx and a bit more about the details on the manufacturing front.

Yes. So we just provided an update a couple of weeks ago in connection with our Q3 results. When we embarked on this initiative to build out this incremental capacity, we guided to completion of this dedicated suite within the Lonza complex in the early part of 2026 at a total cost of $300 million to $350 million. We're on track and on budget. We reaffirmed that just a couple of weeks ago. So well positioned to meet -- to get that facility beginning to make product to qualify that facility and to build inventory in anticipation of the future launches. And then I would just add what Lonza does on our behalf for a number of components of the manufacturing, including the drug substance.

We have done and we'll continue to do the drug product, the fill/finish in the United States. We're currently working with a very well-regarded CDMO there. And as some of you may have seen, we announced several weeks ago, a relationship with Thermo Fisher to serve as our long-term fill/finish facility. So I think the punchline is we are well positioned with both Lonza and this existing U.S.-based CDMO to support the expected demand for the adult indication and these newer facilities this dedicated suite with Lonza and this relationship with Thermo Fisher -- we expect we'll be on track to meet the supply requirements upon the infant indication coming online, which obviously is significantly larger given you have a global market and a multi-dose market versus the U.S. market, which historically has been principally U.S. that's growing for reasons we talked about.

Excellent. Okay. Great. So this space is -- historically, most of the large pharma is playing this vaccine and the pneumococcal vaccine. Now you are one of the biotech, but you still have a lot of the large pharma doing this. And any updated kind of a competitive landscape that we should be aware, I think Pfizer, they're pushing forward the 25 and then they're also moving to the 31 and GSK the same thing. Any updated kind of information you can give us?

Yes. So they have been providing periodic updates on their programs. And yes, I think the most recent update was that Pfizer has pushed back the potential initiation of the Phase III program for their 25-valent program from late this year to potentially late next year. But they are still in the process of nailing down what the formulation would look like for that program. So I think it's still a bit of a work in progress. We know they have talked about a 30-plus valent program that's in preclinical development, which will be an additive program on top of this 25 valent.

So I think it's kind of a first things first kind of moment for them. They're trying to get that 25-valent on track. And then GSK also has had a 24-valent program that they've been working on, but they've fallen back to a 30-plus valent program, I think, to be more competitive and try to match up with us. And that program has just gotten the clinic with a small Phase I study. So they're behind us, and we've generated really compelling data to date, but I'm sure they're going to keep trying hard.

Excellent. Okay. So how is the balance sheet, Andrew? And then how does that support everything we just said?

Yes. Based on our Q3 update, we have $2.7 billion on the balance sheet as of September 30. So really in a strong position. And what we have indicated is that balance sheet is sufficient to fund our operations and advancing our business and of course, investing in our PCV programs as expected into the middle part of 2028. So that would put us to the cusp of the potential launch of the VAX-31 adult program and obviously, a period through which we're able to fund multiple milestones, not only the -- all the Phase III readouts for the adult VAX-31 program, but as well as these key readouts for the ongoing VAX-31 infant study.

excellent. Thank you. Thank you for being with us. Yes. Thank you, everyone.

Yes. Thank you.

Okay. Good afternoon, everybody. Thanks again for joining us at Guggenheim's Second Annual Healthcare Innovations Conference here in Boston. Really pleased to be joined by Vaxcyte. I'm Seamus Fernandez, one of Guggenheim's senior biopharma analysts.

And to my far right is Andrew Guggenhime, President and CFO; and to my immediate right, Jim Wassil, EVP and COO of Vaxcyte. Always great to see you guys. Maybe, Andrew, if you want to just kick us off, love to just kind of hear your thoughts around the progress that Vaxcyte has made in the last 6 to 7 months. And also just state of the state on the environment and the opportunity ahead for Vaxcyte.

Great. Yes. Thanks, Seamus, and thank you and the team at Guggenheim for the opportunity to present here today. Appreciate it. Yes. No, look, it's an exciting time for Vaxcyte. The last year, just about a year ago, delivered by all accounts, pretty spectacular results for our 31-valent adult program.

And then this year, in 2 installments, the last of which was last week, delivered robust results for our infant 24-valent program. So it's going to be an exciting time for us over the course of the next 12 to 18 months, just ticking off kind of the key events for us in the adult market, which represents about $2 billion of the total $8 billion pneumococcal vaccine market.

We're on the cusp of initiating our 31-valent program, adult Phase III study, expect to start the pivotal non-inferiority study in December of this year. And reading out the top line results from that study next year and then expect to move into the balance of the Phase III studies that comprise that program next year with those studies reading out in 2027, which allows us to maintain our BLA and potential approval time line. So really excited about that. I know we'll get into the discussion on that.

Moving into the infant market, as I mentioned last week, we unveiled the final data set for our 24-valent infant program that showed results consistent with what we observed early this year, robust immune responses, dose -- strong dose response profile and continuing to see an absence of meaningful carrier suppression in that population, which bodes well for the ongoing 31-valent infant program that continues to enroll subjects -- we're exploring 3 arms in that study, 2 of those arms are doses higher than any explored in the 24-valent study.

So that program, as I mentioned, continues to enroll, and we're expecting to see data from that study either in 1 or 2 installments. If it's 1 installment, both of those will be by the end of the first half of 2027. If it's in 2 installments, we'll have the first data set likely either end of next year or early 2027. And so we can get into the reasons why we have optimist -- we are optimistic about the results from that 31-valent interim program.

And then as we advance those studies from a clinical perspective, we continue to ready ourselves for potential commercial launches first in the adult population and then in the infant population. We announced last week the hiring of our first Chief Commercial Officer, Mike Mullette, who joins us today in the audience, but Mike brings a long and distinguished career in vaccines, spent almost 2 decades at Sanofi. And roles of increasing responsibility around the globe, then moved on to Moderna, where he stood up and led their North American vaccine franchise during the pandemic and comes to us most recently from Lykos. So thrilled to have him on board.

And as we prepare for that aspect of commercial readiness from a manufacturing perspective, we are on the cusp of completing the build-out of our dedicated facility in our partnership with Lonza. That remains on track and on budget to complete early part of next year. And then more recently, we announced just in the last couple of months, the solution for a long-term drug product fill/finish capacity, an agreement with Thermo to establish capacity here in the States in North Carolina.

And I'll just close by saying all these efforts are supported by a very strong balance sheet, $2.7 billion in cash and equivalents as of the end of September. So capital that enables us to fuel the advancement of these clinical programs as well as our readiness toward potential launches for first adult and then the infant markets.

Okay. Maybe we can just jump into just the evolution of the commercial market for pneumococcal disease. I know there's other areas that are viewed to be under threat or whatever. But as you guys look at the pneumococcal vaccine opportunity and the evolution today, how is the market evolving? And is it consistent with the more is better mantra when you look at it so far?

Yes. So I'd say that the market is fairly robust as it is today. It's a significant disease. And so from that perspective, the majority of countries throughout the world have already made recommendations and are funding it for the infant program. The estimate is that it's roughly an $8 billion market and some say it's projected to go to $12 billion, even $14 billion over the next decade or so.

The main driver for that is the adult market. In the infant market, I just mentioned, most countries have already adopted. There will be some price increases. So you'll see some growth there. But in many ways, it's the adult market fueling this growth. So we see a change from more of an infant-based market to both infant and adult equally split. In the U.S., the reason for that is that the recommendations got moved recently down from 65 to 50 years of age.

And with that movement down to 50, you get 63 million Americans between 50 and 65 that are now eligible. So there's this nice big catch-up that Merck and Pfizer are fighting over right now. But we believe when we launch, there'll still be a decent portion of that catch-up to us. The other thing, though, is the ACIP, which is the recommending body for vaccines in the U.S. have said, hey, when broader valent vaccines come out, we're going to consider giving a boost at 65 years of age. So that would double the market in the U.S. as well as this additional catch-up.

Now ex U.S., because of the broader valent vaccines, adult recommendations have started to appear, Germany, U.K., Japan. And just last week, I think Quebec said that Capvaxive is on their schedule as well. So we're seeing that significant growth.

No, I think that's right. I'd just add to Jim's comments just in terms of the dynamics of the market. So $8 billion today, as he said, growing to $12 billion, $14 billion. So it's very large, very well established. And importantly, the adoption criteria in this market over the past 2 decades have been clear. So broader has been better. We've seen that in both the adult and infant markets that the broadest spectrum vaccine garners the significant share of the market.

That's certainly true in the context, for example, in the U.S. of a preferential recommendation being granted to the broadest spectrum vaccine. We have seen that historically. That isn't the case today. But even in the absence of a preferential recommendation, we have seen the broader spectrum vaccine garner the significant market share, which I think gives us the optimism we have about the profile for starting with VAX-31 in the adult population, where a vaccine that covers more serotypes than any other vaccine, covers substantially more disease than the 2 existing players in the adult market.

And if we can continue to replicate the data in our Phase III study that we saw in Phase II, not only more serotypes, more disease, but better immune response as well. So we're excited about the profile of this vaccine and the opportunity to hopefully commercialize it soon.

Right. And one dynamic that I think is worth talking about is just your adult Phase II data, what we learned from those Phase II data with VAX-31 and incremental to that, the ability to translate those data into Phase III results just because I think it is the opportunity here to talk about that. Maybe you can also remind us the starting point for your Phase III trial, I believe, is now December of this year, just the dynamics around that.

Yes. Maybe I'll first cover the -- just kind of the time lines and where we are and turn it over to Jim to talk about what we expect in terms of the translatability of Phase II data to Phase III in the context of what you typically see in this space. So just to level set, as I mentioned, we've got a Phase III program upcoming that will be led in headline by the pivotal noninferiority study. This is historically 1 of the 2 studies required for ultimate licensure.

We reaffirmed just last week in our Q3 update that we expect to start that pivotal non-inferiority study in December with the data from that study reading out in 2026 with the balance of the studies to follow initiating in 2026. We'll be providing specifics on that design either once we've dosed the first subjects in that study or shortly before then. That's customary with our historical practice.

One thing we have said in our interactions with the FDA, we are not expecting and have not heard to date any request for placebo-controlled study, a field efficacy study or an outsized safety database. So we continue to expect it will be driven by non-inferiority study with the details, as I said, ultimately to follow here, not only in the non-inferiority study, but the other studies that we expect will comprise the program for eventual licensure. But we -- as we have said, we are ready to go in that study, operationally ready.

Supply is ready. We have submitted the final protocol to the FDA that is reflective of the conversations we've had with the FDA to date, which gives us the confidence that we'll be in a position to enroll the first subjects in December.

Great. And just remind us the percent coverage relative to whether it be Prevnar 20 or also CAPVAXIVE, where VAX-31 would end up in the adult population?

So in the adult population, we expect to cover about 95% of strains, and that's an incremental 14% to about 35%, 35% being above PCV20, 14% being above CAPVAXIVE. That's for invasive pneumococcal disease. For pneumonia, it's even larger difference.

We actually see a better difference relative to both CAPVAXIVE and to PCV20. And just to answer that last question, you said, are we going to expect any differences between Phase III and Phase II?

We're basically the same assays. We're the same patient population, a lot of the same sites, and we had 18 out of 20 serotypes be greater than Prevnar 7 of which were statistically superior. So I think we're going into the Phase III with a lot of confidence that we can reproduce what we've seen in the Phase II.

Yes. And I think that we have that confidence in part, certainly founded by the data we've shared to date, the strength of our technology platform. That outlook is consistent with what you've seen historically in this space where other developers who generated positive Phase II data. I think we're still batting 1,000 in those companies generating similarly positive Phase III data and the opportunity to ultimately get to licensure into the market.

The one question on the adult side is Prevnar 20 has been available for some time for the over 65 population, just in terms of being able to execute the clinical study. Can you just remind us -- are there any restrictions on the age of the patients, the patient population, just your expectations for recruitment of the study to be able to deliver the results in 2026?

When we did the original study design, we assumed that the ACIP would recommend the vaccine at 50 years of age. So we picked a population that would balance both the 50- to 65-year population and the 65 and above. So we want to make sure that we have a balance between those 2.

Yes, the enrollment will be a little bit slower in the 65 and above because about 63% of them have already received a pneumococcal vaccine. But overall, we don't foresee any issues with enrollment in either patient population.

Right. And the benefit of also not having a placebo control in that study should be incremental an incremental help, I would think.

Absolutely.

Okay. Great. Why don't we talk a little bit more about the pediatric data, how you're thinking about the modifications to the study, the ability to kind of push the dose higher? And what did we learn from the most recent fourth dose results?

Okay. All right. So in the infant population, we had the recent data readout. I think the bottom line is that it's very consistent with what we've seen in the top line data that we saw in March. There were a couple of nuances that I think were very encouraging. The one is that as we got more of the fourth dose data, what we saw was a greater difference between the 2.2 microgram arm and the 4 in terms of a dose-dependent immune response.

So post-dose 4, we are seeing an improvement when we push dose. We had already seen that in the top line data, and that's why we stopped the VAX-31 infant study and added what we're calling an optimized dose arm that is mostly 4.4 micrograms and then restarted that study while dropping the low-dose arm and moving forward.

So I think it just reconfirms that we made the right choice to add the additional arm and move forward because we think that we can get improvements. We didn't see the carrier suppression in those serotypes that stayed at 2.2 micrograms between the middle and the mixed dose. So we didn't see a diminution in those. So we didn't see the historical carrier suppression that you've seen with other vaccines. So we're optimistic we can push dose and see an improvement in that immune response.

The other little nugget was -- when we looked at the data, we obviously report the IEP, the immunogenicity evaluable population. But when we looked at subjects that were excluded because they got flu vaccine, we saw better results with us compared to PCV20 versus the overall general population, meaning that we had less interference when given concomitantly with flu than PCV20 did.

And the reason that's important is flu is a standard of care and given in this population on a routine basis. So perhaps in Phase III, we don't exclude those individuals, and we can maybe see an even further improvement when we move forward with this project. Anything else?

No, I think just -- I would say the learnings from that study give us the confidence we have this 31-valent infant study ongoing, the combination of the data we saw, the fact that we are moving to higher doses in the 31-valent and the dose response and the absence of meaningful suppression give us the confidence we have as we move into this -- further down the enrollment pathway for this study.

Great. Maybe talk -- let's maybe drill a little bit more into the individual serotypes. -- and the data that we've seen from the individual serotypes, which ones would you just sort of say characteristically are the most important? And how have you sort of optimized for showing a non-inferiority to Prevnar 20 or potentially another vaccine in that context?

In infants?

In Infants.

Yes. So the most important are the ones that are currently circulating at the largest amount. 3 and 19F are the 2 most common. They represent 30% of the strains. In our 24-valent results, both post-dose 3 and post-dose 4, you saw more than a 1.5-fold, in some cases, over a twofold increase in our response relative to PCV20.

So we think that we're in a good position because when you look at the serotypes that are circulating the most, I picked the 2 most common, but -- all the others we did fairly good as well with. So we're feeling very comfortable moving forward that we're covering those strains that are the most prevalent in the environment. The ones that we did a little bit lower on and may have missed on the non-inferiority like 1, 6A and 5 have not been circulating in the U.S. for 3, 4, 5 years in some cases.

I think just to expand on Jim's comment, the other serotypes on which we did particularly well in the 24-valent study were the 4 serotypes unique to VAX-24. And as we think about the ongoing 31-valent study, we'll have 11 serotypes unique to VAX-31 that are not contained in PCV20. And those 11 serotypes that are unique to VAX-31 confer an additional 30% of circulating disease coverage.

So the coverage encompassed by those unique serotypes in which we did particularly well, we believe we'll do particularly well in the ongoing study and the performance on the serotypes that are common with PCV20, which we did particularly well kind of collectively, those represent a substantial portion of the disease that is circulating today, which is kind of one of the many factors that ultimately the FDA will consider in evaluation of this vaccine as they have in others, which is kind of the totality of the data assessment.

Great. And can we talk a little bit more about just sort of the dynamics around when we'll see the data from your Phase II and how we're likely to see it. There's a choice between covering a primary series versus going all the way to the fourth dose before revealing the data.

Yes. So that's still under discussion internally. What we have said and we affirmed this last week is we anticipate and we will announce the data either concurrently or sequentially. In either case, we'd expect to have the booster data, which is the second co-primary endpoint after the booster dose administered between 12 and 15 months of age. We expect to deliver that data set by the end of the first half of 2027.

So 1 of 2 approaches will be taken. Either we will unblind that data set concurrent with the primary immunization series data. That's the data following the first 3 doses that are administered at ages 2, 4 and 6 months. If we unblind those results concurrently, we'll deliver that full data set we expect by the end of the first half of 2027. The alternative approach would be to unblind and therefore, disclose that primary immunization series data set in advance.

If we do that, we would expect to have those data 6 months plus or minus in advance of the booster data, which would put that data set either at the end of 2026 or early 2027. We expect in the early part of next year to communicate publicly kind of what our ultimate unblinding strategy will be and what the result and disclosure plan looks like, whether it's a 2-step or this one-step approach.

One question that I have is just in terms of setting expectations for VAX-31 in the pediatric patient population. I'm a little reluctant to do this right now because I know that there's lots of paths to success.

But maybe you could just help us understand what has kind of managed to -- what have other vaccines achieved in this space even when non-inferiority has been demonstrated, what number of serotypes has that been demonstrated to? And how much flexibility do you guys think you have?

Yes. Maybe I'll ask Jim to talk about the most recent example of an approved vaccine in PCV20 mutant population, then I can translate to kind of how we plan to set expectations as it relates to our 31 valent program.

Yes. So for PCV20, they got approved recently in infants in the U.S. They missed -- there are 2 co-primary endpoints, one after the first 3 doses that are given at 2, 4 and 6 months of age and then the second co-primaries after the booster dose given in the second year of life. In the first of the 2 co-primaries, they missed on 6 out of the 20 in terms of non-inferiority.

They did recover where they made it after the booster. And they said that from that perspective, they felt that it was an approvable product. And of course, the FDA decided to move forward even though they did miss on those 6 serotypes.

And then I would just before I get into our expectations, I would say you contrast that with the European study where they administered 2 doses in the first 6 months of life before the booster dose. And in that study, they missed on 11 of 20 in the first of the 2 co-primary endpoints. And in that context, that data set was not approved.

So you can see 6 was approved, a missing of 6 was approved out of 20, 11 was not. As it relates to our data set, we continue to believe, and we hear this from experts with whom we have conferred that our VAX-24 data set on which we did miss a few serotypes, both post-dose 3 and post-dose 4 represents an approvable data set. As we head into VAX-31, a couple of factors, I think, work further to our advantage.

As I mentioned, we've got 2 of the 3 dose arms in the study that are higher than any of the arms explored in the VAX-24 study. And we saw this nice dose-dependent response, no impact to the safety and tolerability profile and absence of meaningful carrier suppression, which give us kind of the optimism that these higher doses will deliver higher immune responses. So we do expect higher immune responses in this VAX-31 study.

This is a program, which, as I mentioned, confers substantially more disease coverage than the comparator PCV20, which set us up well. So I think our expectations going in the study will be similar to those we set in advance of the VAX-24 study. We would expect and believe we can miss on a few serotypes. But in the context of the disease coverage, how much these incremental serotypes represent, and kind of the overall immune response profile the FDA has and no indication that they will not continue to evaluate the totality of the data as we go forward. We'll be working to refine those expectations, but I think it's fair to assume and expect and still represent an approvable profile to miss on a few serotypes, whether post-dose 3 and/or post-dose 4.

Another sort of dynamic that can come into play and can be quite helpful is just sort of the size of the study. So can you just help us sort of scale the size of your Phase II pediatric study relative to the size of what a Phase III would look like?

So Phase II, we were doing about 200 subjects per arm, give or take, in the enrollment. When we do a Phase III, the overall size of the study won't be much different. It's just all of them will be 1 dose versus 3. So my guess is roughly 1,000 subjects per arm, maybe a 2,000 subject total is traditionally what a Phase III pediatric study will look like.

That is an important point, though, Seamus, and thanks for reminding even if you have kind of consistent mean -- geometric mean ratios from Phase II to Phase III, just given the Phase III study will be larger in size, but the confidence intervals are expected to tighten, right?

And the measurement here is non-inferiority. So even with consistent means, would expect the kind of lower bound of that confidence interval in the Phase III study to be higher than in the Phase II, just given statistics.

Great. And then maybe just to wrap up, it's a competitive landscape. You guys are definitely in the lead in a lot of ways. But can you just give us a sense of your perception and view of how far along you are relative to competitors?

Yes. I mean look, I'm not going to speculate in years, but I think we like the position we're in. I think most recently, some of our competitors have announced kind of delays to their programs. So I think our lead, in our view, has only widened over the course of the last year, and we're about to start our Phase III program for 31-valent.

It's the highest valency program going into Phase III of any. It remains a competitive market for obvious reasons, it's an $8 billion market in size. But we continue to have healthy paranoia about our competition, but like the position we're in from a timing standpoint and just the profile of our vaccine given the technology platform we have.

Great. Well, unfortunately, we are up on time. 25 minutes never really enough, but it's a great opportunity to catch up with you guys again. Look forward to all of the announcements and future success of Vaxcyte coming in 2026 and beyond.

Great. Thanks, Sam.

Thanks. Thanks, everyone.

Okay. Good afternoon. Welcome to the Cantor Global Healthcare Conference. My name is Carter Gould, biopharmaceutical analyst here at Cantor. Thank you, everyone, for joining us.

I'm pleased to welcome Vaxcyte to the stage. We are joined by CEO, Grant Pickering; Andrew Guggenhime, President and CFO; and Jim Wassil, COO. Gentlemen, thank you very much.

I think before we get started, maybe just a brief overview of the company and any other opening comments from you, Grant.

Yes, sure. First of all, Carter, thank you for having us. Thank you all for coming. Vaxcyte is a company focused on vaccines. We have a proprietary cell-free protein synthesis platform that allows us to perform very precise conjugation of vaccine mutations. We had been applying those technologies primarily toward our pneumococcal conjugate vaccine franchise. We have obtained very compelling results with our lead vaccine which is called VAX-31 in adults. And we have an ongoing Phase II study in infants with VAX-31.

I'd say the headline for our technology is that we're able to create a broader spectrum versions of what has been a tremendously effective class of vaccines and produce broader spectrum vaccines while actually improving immunogenicity over precedent lower spectrum vaccine, which is entirely unique relative to how this class has evolved.

Usually, you're sacrificing coverage and accepting lower immune responses, and we've been able to produce a combination of both, which is broader coverage and better immune responses. And that's really what's propelling our lead VAX-31 program toward hopefully a market introduction in the not-too-distant future. And we are on the verge of initiating Phase III clinical development of that program, and we will look forward to applying this technology to other vaccines as time goes by.

But the PCV franchise, as we call it, is really the centerpiece of the company today.

Perfect. Okay. Great. So about a month ago, you guys had a couple of updates. Maybe we could focus first on the adult setting and frame sort of the end of Phase II feedback and what that means for Phase III.

Yes. So obviously, vaccines are in the news quite a bit these days, and there's a lot of anxiety understandably about how vaccines are being developed in this moment. But we were able to announce last month that the program for VAX-31, as we have emerged out of end of Phase II conversations with the FDA, we were able to announce that the program is exactly the sort of composition that we had been expecting all along.

So these vaccines are now approved based on validated surrogate immune endpoints, which have correlated with efficacy historically and have resulted in the elimination or drastic reduction in disease for the strains incorporated in these vaccines based on this path to approval.

So we were able to announce that our Phase III program for VAX-31 will be getting underway. We plan to initiate the Phase III pivotal study in the fourth quarter of this year. And we are also able to announce that the balance of the Phase III studies will go off as we had been planning. We will have more than one initiated before the end of this year.

The balance of the Phase III studies will initiate next year, and the results of those Phase III studies will be obtained over the course of 2026 and 2027. And if everything goes as planned, that would put us in a position to file a BLA in late 2027 and anticipate a potential approval in 2028.

So those are the high points. And then we also wanted to emphasize that some of the aspects of conversations around vaccines did not apply to our program based on the conversations that we had with the FDA. So no conversation around the necessity of a placebo control study or an efficacy study nor any change as it related to the size of the safety database that has conventionally been required for this class of vaccine.

So a lot of really meaningful progress in collaboration with the FDA as we anticipate the initiation of Phase III for VAX-31 before the end of this year.

All right. So I do want to dig into a little bit to the Phase III sort of program. But before we do that, maybe just if you could put maybe a finer points on some of those interactions with the agency, just how you get confidence that, that guidance is binding to the extent it is. Maybe any commentaries on the extent to which senior leadership was involved in those conversations that you come out of that with solid confidence that this is the plan going forward.

Yes. I mean, certainly, we did come out of that -- those interactions with solid confidence. We've been engaging with the FDA over the last several years since we've had kind of parallel programs in adult and infant for VAX-24 and VAX-31. I would say that the tone and the team and the tenor of the conversations we've had with FDA have been consistent with the pre- and post-administration change.

Several signatories attached to the correspondence, which is principally post-COVID in writing. We -- certainly, the senior folks at FDA were very involved in this, whether the most senior folks at FDA were involved, they weren't among the signatories to the documents, which isn't to say they weren't, but we don't have direct evidence of it.

We've had the opportunity to engage directly with senior leadership at FDA in other forms, but not necessarily in these interactions, but very constructive dialogue.

Look, the FDA always has the right to change its view. But given the nature of these discussions and the very consistent approach that the FDA has applied to precedent programs and appear to be applying to competitive programs today, we feel good about where we stand. And as we discussed, we'll share the full details of not only the noninferiority study, which we expect to start in the fourth quarter, but the balance of the studies upon commencing that program.

That was the next segue to my next question, which we'll see how far I get on that one. But as we think about that Phase III program, how -- at this point, to what extent can you characterize it beyond sort of the noninferiority study? And maybe putting it a different way, to what extent do maybe some of the proceeding kind of Phase III programs like we saw from Merck serve as a good proxy for what we should expect? Maybe that's a good way to kind of pivot off that.

Yes. I think if you start off in a good place, which is Merck and Pfizer have both gotten approval in this space. They both have gotten multiple clinical studies to -- for their products. We know we have a certain minimum amount for safety. The noninferiority study will not consume all of those 60 subjects. So we want to do a few other steps.

Now those studies are not necessarily required for approval. But as long as you have to do them for safety anyway, you might go round out your label. So you want to do studies like concomitant use with flu because a lot of these vaccines are given at the same time as flu.

You want to look at previously vaccinated subjects because you want to say, "Hey, if you want to broaden coverage on 13 valent, then you want to see if the 31-valent, or a 20-valent for that matter, will improve as well.

So you look at it as more -- we want to round up the label. We want to have at-risk individuals because those that are at higher risk of this vaccine -- for this disease, you want to make sure that they actually respond well to the vaccine as well. So the studies will encompass a lot of those types of studies.

Okay. And then the follow-on point to that is as we think about the sequencing of these reading out, should it be our expectation that the non-inferiority study will be the first one to read out? Or could we get some of these other Phase IIIs maybe in advance of that? Or I think there are a lot of questions coming out of the update just -- and we'll get to some of the -- particularly on the infant side, just -- we're going to get a lot of data and how they're going to come out.

Yes. Certainly expect '26 and even '27 to be data-rich years. And I think, Carter, to your specific question, once we start the noninferiority study and see how early enrollment goes, and then the timing of the start of the other studies will sharpen our pencils, so to speak, as to the -- this more narrow window right now, as we've said, expecting data from the noninferiority in 2026.

And from the other studies, either in '26 or '27 in terms of exactly what the sequencing is, stay tuned. That will come shortly after we not only initiate it, but see how early enrollment is going in those studies.

Okay. One of the other things that came out of the update and sort of like a line in the PR, but I definitely want to double-click on it is sort of on the manufacturing side of things, which I think the Street, it's a little bit difficult for us to sometimes get our hands around. But it seems you guys called it out with purpose there.

And I don't know to the extent that you can maybe give a little bit more visibility into the importance of that. And maybe just taking a step back, just sort of in terms of preparation for a potential filing down the road, kind of where the manufacturing effort is at and maybe additional stage gates that you'll have to get through beyond sort of producing Phase III products. Hope that makes sense.

Yes. No, no. I followed it. So to your question about the status of our CMC pursuits with the FDA, indeed, we did update on that at our quarterly update in August. And needless to say, pneumococcal conjugate vaccines, especially one with the sort of breadth of the 31-valent vaccine, it's a tremendously complex undertaking from a CMC perspective.

And so what we wanted to make sure was clear was that we had gotten the blessing from the FDA to allow the initiation of Phase III of clinical development because this is really codifying the process of making the vaccine that will be carried through the commercialization of the vaccine.

So this was a really big moment for us where we had been able to share the full measure of data that we had collected across the gamut of the components that go into this vaccine, so 31 different drug substances. Many components that go into the construction of those conjugates and many assays, both in process and post production to confirm those components are precisely what we would want them to be.

So yes, it was a really big moment for us. And we've always had the view that a fulsome investment in CMC would be required to fully realize this opportunity. This is the largest segment of the vaccine industry. So we -- there are $8 billion worth of pneumococcal vaccines sold every year. And so recognizing the sort of best-in-class profile that we thought we could obtain with our technology, we knew we needed to make that fulsome investment in the manufacturing in order to realize that.

So we've taken a very long-term view as we build the company and build the product, and this was a big step in ensuring that we did the right thing.

Okay. And I want to maybe just stay on that for a moment. This being a novel platform that the agency hasn't seen before. So as you talk through those efforts there, how much of that was FDA was going to do this anyway for anything moving to Phase III versus this is novel, we haven't seen this before, we're going to make sure FDA kind of comes up the learning curve? I hope that's clear.

Yes. So undoubtedly, there are certain things that we are doing in order to construct our conjugates that create a meaningful difference where it matters most, which is producing better immune responses across a broader array of immunogens to create broader protection when a person is immunized.

Yet in terms of the actual method of making these vaccines, there's much more the same than different. And so what's fundamental is to ensure that you've covalently bound these 2 discrete immunogens that one drives the T cell response and the other one that directs the actual antibody response.

And so the method of construction might be slightly different in terms of using a newer form of chemistry that's more efficient and allows some adjustment in terms of ratios and site -- the site of conjugation. Other than those small changes, it's much more the same than different.

So most of the release assays are the same as those have been used historically. So there's much more that the agency is able to look at that's the same that they've reviewed and measured historically than different. There are a few assays that we needed to produce in order to satisfy them, but these were identified at the very earliest stages of the program. So again, ultimately, it's more the same than different, but you need to meet those precedent standards.

Yes. And vaccines versus drugs or others, a step from Phase II to Phase III is significant. And the reason is that with the drug, you can test the drug at the end, and you know exactly what's in there. With a vaccine, the process is the product.

So the FDA for all vaccines, including ours, when you go into Phase III, they want to see you manufacture at scale -- commercial scale and that you can do it consistently and that you have all the analytical tools to do it. So this is a big step for all vaccines, us included. So I don't think it's anything unusual. It's something that all vaccine manufacturers have to do before proceeding to a Phase III.

Okay. So I want to get to the infant part of the market in a second, but maybe just to round out sort of the adult market. If you can help frame -- obviously, the $8 billion number gets thrown around a lot. But as you think specifically around the adult segment, frame the attractiveness of that relative to the infant segment and differential growth rates, et cetera, and why we shouldn't be so dismissive of the adult segment contributing real dollars.

And right now, you see about a 75%, 25% split, 75% peds, 25% adults. So you still have -- in an $8 billion market, that's nothing to sneeze about. But that said, a lot of the growth is going to come from the adult market.

Infants, most of the countries around the world have already recommended it, and the penetration is extremely high. So what you see in terms of increase in the size is more due to price increases than anything else.

For the adult, though, what we saw was the ACIP recommended the vaccine shift from 65 years of age down to 50. And what that means is that you now have more individuals that you can vaccinate. And we think that eventually, you get a shot at 50. I don't think that's going to carry you through your sunset year.

So I do think that they will recommend a booster. So that will double the U.S. market. Ex U.S., what we're seeing is with these broader vaccines like in PCV20, a lot of the countries that didn't have an adult program or were using Pneumovax 23, which is the unconjugated form, are now shifting or making recommendations for the first time.

So countries like France and Germany, Switzerland, and you hear Japan is in the final stages, Australia. So you're seeing a huge increase in utilization ex U.S. as well. So we foresee the split going from 75-25 to more of maybe a 60-40 or maybe someday even a 50-50 split.

And just to summarize that on the $8 billion market today, you look at several third-party projections predicting the size of the overall market globally to grow from this $8 billion to $13 billion or so, the overwhelming driver of that growth is in the adult market for reasons Jim outlined.

And Jim, maybe any early lessons from the Capvaxive launch and -- that are relevant as you guys start to do your planning?

I mean, let's move back. When PCV20 went against PCV15, what we saw was that PCV20 ended up with very high market share. Capvaxive has broader coverage. They're making significant inroads. I think it's still early to tell, but they got already 39% market share, and they've made it in channels where customers are looking at clinical differentiation versus obviously the marketing prowess that Pfizer may have.

So I think that coming out with a broader coverage vaccine for us will bode well and that we should be able to penetrate the market quickly as well.

Okay. All right. Moving on to the infant setting, and you guys had some news today that the optimized dosing arm started to enroll patients. Maybe if we take a step back, frame the decision to go this route and as you -- the rationale really to take this step.

Yes. So as Carter pointed out, we did announce today that we have reinitiated the enrollment in our ongoing Phase II VAX-31 infant study. And this is a reinitiation after having introduced a higher dose, which we call the optimized dose.

So you may recall that we obtained our first infant data for our VAX-24 program earlier this year in March. That data was positive, but it was a dose-finding study, where we saw that with higher doses, we get higher immune responses, which isn't shocking, but it doesn't always work out that way with vaccines.

And so what we saw was that we had an approvable profile with VAX-24 when compared to Prevnar 20, but there was room for improvement for a number of the serotypes. And we had already initiated a Phase II study for VAX-31.

And so it created an opportunity for us to introduce an optimized dose of VAX-31 into this already ongoing study to give us the highest probability that we can have an outcome coming out of Phase II that would be a dose that we would advance directly into Phase III.

So this decision was taken based on that data we saw in the spring. And so that optimized dose cohort has more of the serotypes dosed at the higher end of the spectrum, which is up to 4.4 micrograms. In fact, the majority of the serotypes are dosed at that highest dose, and the balance are at a slightly lower dose of 3.3 micrograms.

So now we'll have a medium, a high and an optimized dose in this dose-finding study, along with a low dose that we elected not to continue to accrue to because based on the infant data we saw in the fall, when we first took our vaccine into the clinic, you're doing dose finding. And the VAX-24 data showed that when we tested a significantly lower dose relative to the conventional marketed dose, it wasn't adequate.

So that was not shocking, but we needed to see it. And so the study that will read out in the future will have these 3 dose cohorts, plus we'll look at that low dose data we accrued in half of the intended subjects. So that study is now accruing.

We have guided only to the latest time point for which we know we'll have all of the data from that study. And so what we've said is we will have the primary series data and the boost data by the middle of 2027, but we carefully worded today's press release to acknowledge that we could look at the data sequentially. These are co-primary endpoints, and we have an opportunity to look at the primary series data earlier than that -- by the middle of 2027.

So we're waiting to more specifically guide to that until we get more of the accrual under our belt and look at the timing. But certainly, it would be in the 6 months earlier, plus or minus, than that later time point, and we will work out the unblinding strategy and get more specific about our guidance at a future date.

So I'll come back to the disclosure in a minute. But probably, I got carried away. So the one -- on this whole page, the one question I think really wanted to ask you was, should we think about this optimized dosing arm as establishing an upper limit or, I guess, evaluating a bound condition? Or is it a genuine attempt to potentially define a Phase III dose?

We should think about it as the latter. There have been higher doses tested by other sponsors. So it -- there's nothing that would ultimately prevent us from pushing to even a higher dose. There really has not been any dose-limiting adverse events identified using pneumococcal conjugate vaccines. These are decidedly immunogenic constructs, and yet there is not a demonstrable AE profile that emerges as you administer more of them or adjust the doses up slightly.

It's not to suggest it's precisely the same, but it's very, very minor and modest. So I do think we could ultimately imagine a scenario where we would have higher doses. But based on the data we've generated in that VAX-24 study and the dose responsiveness we've seen, we don't think we'll need to push beyond that higher dose.

Okay. So come back to the disclosures now. I think historically, we've seen companies release the primary data. So it's a great way to ask the question around why that language. And I -- as I think about that, it's all in the context of you guys are going to have a lot of data coming out at the same time. And maybe that's the prism you looked at it through. Am I barking up the right tree? Are there other nuances here I'm just missing? Or are you just giving yourself flexibility?

Yes. No, look, I certainly think that's a key consideration. And as Grant alluded to earlier, we have not yet finalized the unblinding plan for this infant study. It's the unblinding plan that's going to dictate the disclosure plan.

But the factors at play are, we've just resumed enrollment in the study. We want to see how enrollment goes to understand, regardless of what the unblinding and disclosure strategy is, when those time frames would fall for primary series and booster.

And then we have the adult programs, the noninferiority study starting as expected in the fourth quarter of this year with other studies starting around that as well. So we'll have an infant program going on once we get a sense of when these adult Phase III study start and how early enrollment looks, the data, the serology data from all these studies go to one vendor to be processed.

So you have the rates of enrollment for several studies, how those overlap in terms of ability to do the serology, which will influence the timing of the readouts from all of them. So getting a sense, I do think by the early part of next year, we'll be in a position to sharpen our pencils on the disclosure plan, an unblinding plan for the infant study and the expected readouts for the collective studies infant and the few in the Phase III as well.

It sounds like you're teeing up a really exciting calendar 2026 discussion this time next year. Okay. So maybe then in terms of defining that optimized dose arm, you guys have used the term majority of the serotypes evaluating the higher dose.

Are we going to find out about that prior to the actual readout? Or are we going to sort of probably continue to guess...

I don't expect that we will get more granular than that. This is a highly competitive area, and we've been more forthcoming than most about the study designs that we have been executing. So I think that's enough for people to go on.

And the thing that I have emphasized is that if you go back and look at the VAX-24 data, you can certainly identify serotypes for which there was room for improvement. And for any of those for which there was any suggestion of room for improvement, you can imagine that we have erred on the side of using a higher dose.

Okay. That's a great segue. My next question is, you guys are still on the hook to share the final data from VAX-24 on infants. A, should we expect that before year-end? And what else is there to learn given that we saw interim data in a meaningful number of patients?

Yes. So most definitely, we are still expecting to deliver and announce the final results of the VAX-24 infant study. And just to rewind the tape, the data that we put out in the spring was not entirely complete. And so the OPA, so the functional antibody response is at that primary series end point was only interim. And then at the post-dose 4 co-primary end point, we only had 2/3 of the IgG data, which is the other co-primary end point and we had none of the OPA data.

And so that's a 50% increase in the number of events that we will have incorporated into the final results that we'll have before the end of the year. And I guess, what I would say is we wouldn't expect the point estimates of the comparisons to change materially. But the end point is defined based on the lower limit of the confidence interval exceeding a particular level.

And any time you add more events, the confidence intervals tighten up. And at that post-dose 4 outcome, we did have 5 misses. And we could see less misses in light of those confidence intervals tightening up. So it could improve certainly the outcome that we have in hand at this moment.

Would that meaningfully change anything from your strategy? It seems like you guys are kind of...

Well, I would say that we look at that data that we got from the spring, and if you show that data to any objective vaccine developer, they say, "This is an approvable sort of profile. That it is evidently approvable based on all of the historical precedents that have gone before," which also had a number of misses. And this all works out in the context of a few misses that are modest in relation for adding coverage, that's a good trade.

And so the number of misses we had were manageable, but the headline value of the misses, I think, created an angst amongst investors. And so to the extent the headline value improves with fewer misses, I think people would be more reassured.

Okay. And just the final moments here. One thing we haven't talked too much about is sort of opportunities outside the United States. As we think about the Phase III in adults, could we see region-specific studies to potentially give yourselves some optionality as you think about how to commercialize? And any other kind of broader comments you want to make on maximizing the opportunity outside the United States?

Well, you did hear earlier that the winds are changing ex U.S. for the adult market. So I don't think we should ignore that. That segment is going to be quite substantial going forward. So plans are to have regulatory discussions with other key regulatory entities for countries that we think will have a substantial adult market.

Based on that feedback, if they want local studies, we'll do local studies. Nothing to the level that we are with the current body of Phase III, but enough to get approval in those countries as well as to allow the recommending bodies to consider us for a local recommendation.

I would just -- in terms of setting expectations, I would say sort of the key studies for which we've issued guidance for VAX-31 are going to be U.S.-based studies. I think those European opportunities come down the road. And of course, as we contemplate the future infant Phase III, we would definitely -- given that, that is truly a global market already in a sizable one, we would be conducting studies both in the U.S. and in other countries around the world.

Okay. Last 30 seconds, Andrew. So you're on the clock here. As we think about the sort of cash runway and particularly after some of the changes you made, maybe just put a final point on it.

Sure. Yes, look we're fortunate to be in a position of a very strong balance sheet, $2.8 billion as of June 30. Kind of notwithstanding that balance sheet in the context of the macro environment, we did take the opportunity over the last several months to kind of look across the business, see if we had opportunities to further extend our runway. And there were some trade-up decisions involved in that.

The first principles in that exercise were to continue to preserve the opportunity for our PCV franchise. So the impact was elsewhere, including on our decision to defer advancement into the clinic of some of our pipeline programs. But that exercise in total allowed us to extend our runway about 6 to 9 months, putting us in a position to fund our current operating plan until the middle of 2020, which would put us on the cusp of the potential approval of VAX-31 in adults, as Grant referenced earlier.

All right. Great. Exciting next 18 to 24 months. So thank you guys, and best of luck.

Thank you.

Yes. Great. Thanks for your time.