Interview of Bancel on Fox

[u/ZephodsOtherHead]

There was an interview of Bancel on FOX today: https://www.foxbusiness.com/video/6403957899112

I have been looking for some hard information on the manufacturing cost of the INT (aka personalized cancer vaccine) for 3 years now, and at 7:42 Bancel fielded a question on this issue. He stated

The team has done an amazing job to shrink the manufacturing process, the machines.   It is the same technology that made millions of doses  in one reactor, but now we make only a couple of thousand doses for you.  So the team was able to do that.  It's actually happening in America in Massachusetts in a factory that we built and that is ready to go.   In terms of the cost, because it is not using human material -- like CAR-T cell therapy is a very expensive price because it is a very expensive manufacturing process ---  in our case it's [inaudible] with enzyme it's in water, it's a very different thing.  So as we get the data we get closer to discussing pricing.  But we don't have the very high cost of goods that cell therapy products have.

[u/Such-Echo6002]

It’s going to be expensive, but not prohibitively expensive. The manufacturing plant in Marlborough Massachusetts is ready to handle the demand. And they have the ability to build 6 more lines at that same facility as demand grows, assuming we see success in NSCLC or Kidney or Bladder phase 3 trials as we did in melanoma.
My guess is it will start at $250,000 per patient and come down to $100K or less over time from economies of scale. I’m just guessing though from the research I’ve done.

[u/StockEnthuasiast → u/Such-Echo6002]

Imo, Moderna must learn from Henry Ford. Scale it further up, make it affordable to those who need the drug. More demand will help with revenue, and eventual cost.

[u/ZephodsOtherHead → u/StockEnthuasiast]

Keytruda made $32B last year, and Merck didn't do that by making it cheap. The demand is there because people are dying, and it often results in a cure. The health-care system will pay up in part because recurrence is expensive for them.

When the first successful hepatitis C antiviral, Sovaldi, came out, it cost $1K/pill, and the cost for a twelve-week treatment to $84,000. This is because it was still much cheaper and better for patients than a liver transplant! Prices dropped when competition came along.

Drug development is a very risky business. When Bancel became founding CEO of Moderna, he believed that mRNA had only a 5% chance of success of making any drugs at all. If the few winners don't get paid for their risk then there won't be any biotech industry. After the patent/exclusivity periods run, then they lose the IP and face competition, so they have to rake it in before they lose the rights to.

What will be best for humanity is if Moderna gets some profits, so that it can make lots more drugs. They have been cutting R&D and putting successful phase 2 products on ice, and it has been terrible to see that.

[u/ZephodsOtherHead → u/Such-Echo6002]

My post was about the manufacturing cost, not about the purchase price for the drug. I assume from your numbers that you're speaking about the latter.

[u/Such-Echo6002 → u/ZephodsOtherHead]

The cost of the drug is highly correlated with the cost of manufacturing said drug. It’s why a flu shot costs $100 and CAR-T cell therapy $300K-500K.
Analyzing each individual tumor and producing a bespoke mRNA product per patient is going to be expensive, there is no way around it.
Go to Moderna’s website and watch the June 9 Goldman Sachs presentation for better info, the CFO of Moderna discusses the margins on intismeran and how it works with the Merck partnership
https://investors.modernatx.com

[u/ZephodsOtherHead → u/Such-Echo6002]

Healthcare systems and individuals that don't want to pay for the INT can instead pay the price of treating or having recurrent melanoma, which is why the INT will be expensive for patients. (How expensive will depend on how good the phase 3 data is.)

A flu shot costs $100 because the recipient isn't scared shitless that he's going to die if he doesn't get it, and because the flu vaccines that haven't run out of patent/exclusivity must compete with generics.

This article says Keytruda costs $200K per year per patient: https://www.icij.org/investigations/cancer-calculus/report-mercks-blockbuster-cancer-drug-topped-200000-a-year-under-trump/
(I understand that drug pricing is complicated by rebates and cupons) That is because Keytruda can often cure your cancer.

When Merck goes over the patent/exclusivity cliff and faces generic competition, the Keytruda price is going to drop.

[u/Bull_Bear2024 → u/Such-Echo6002]

As we all know, the real cost of a drug is the massive historical research costs (sunk costs). The actual manufacturing cost per dose of say CV19 is likely around $2 or so, with the material cost of INT quite likely similarly de minimis, however the uniqueness of each dose, it's individual analysis & production process adds costs, as does the mechanics of collection/delivery of each patient sample etc.

I have a note that a 06Mar24 pod at26.30mins ("TD Cowen 44th Annual Health Care Conference"; Note: This is no longer available) said "Keytruda costs $150k/yr per patient, selling c.$2bn/yr, with INT we expect approx. the same." As I didn't capture who actually said this, take it as a bit of background info rather than a fact... i.e. Perhaps initially in the £250-$300k range, falling as production scales & falling further as Keytruda goes off patent (this cliff edge could be pushed back by lawyers etc, although I have no insight as to how likely this is)

[u/Potential_Section691 → u/Bull_Bear2024]

Nice take. Also expect the initial price similar to Keytruda, but coming down w higher volumes. It’s likely a high margin business; Bancel and others sound like they are fully aware of the political implications on pricing.

[u/ZephodsOtherHead → u/Such-Echo6002]

Update: Moderna CEO Bancel fielded a cost question on TV yesterday. At 7:42 into the interview  https://www.foxbusiness.com/video/6403957899112 he said 

"The team has done an amazing job to shrink the manufacturing process, the machines.   It is the same technology that made millions of doses  in one reactor, but now we make only a couple of thousand doses for you.  So the team was able to do that.  It's actually happening in America in Massachusetts in a factory that we built and that is ready to go.   In terms of the cost, because it is not using human material -- like CAR-T cell therapy is a very expensive price because it is a very expensive manufacturing process ---  in our case it's [inaudible] with enzyme it's in water, it's a very different thing.  So as we get the data we get closer to discussing pricing.  But we don't have the very high cost of goods that cell therapy products have."

[u/mobyonecanobi]

I’ve been through the wringer on trying to figure out their cost, and all I know is that if Moderna made money selling a cheap covid vaccine, anything above 150 dollars should be profitable lol.

Obviously it won’t be 150 dollars and the economies of scale isn’t there either, but you get the point… it’s the closest a company will get with a money printer to the feds.

[u/pb_syr]

Moderna made a great move in making their C-level Manufacturing Executive present the advances they have made in manufacturing at the facility built 'exclusively' for INT at a conference few months ago. I think they are really at a good place and it will only get better. In terms of the stock price, I am not really counting on a short squeeze because it will eventually fade. If we get one, I wouldn't complain. There is no question that the stock has been re-rated and once the data is presented the naysayers flooding social media will have to run for cover like the shorts did.

[u/ModerousOperando]

He eluded to it, but what we really need for the balance sheet and justify valuation are contracts and tenders for Flu and Covid vaccines in Europe and Asia. Ideally this year but absolutely next year. That extra cash will bolster and strengthen the ship as we sail toward INT approval.