Prepared remarks
Good day, and thank you for standing by. Welcome to the Moderna Second Quarter 2026 Conference Call. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lavina Talukdar. Please go ahead.
Thank you, Kevin. Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's second quarter 2026 financial results and business update. You can access the press release issued this morning as well as the slides that we'll be reviewing by going to the Investors section of our website. On today's call are Stéphane Bancel, our Chief Executive Officer; Stephen Hoge, our President; Jamey Mock, our Chief Financial Officer; and David Berman, our Chief Development Officer. Before we begin, please note that this conference call will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see Slide 2 of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. With that, I will now turn the call over to Stéphane.
Thank you, Lavina. Good morning or good afternoon, everyone. Thank you for joining us. After my review of the second quarter, Jamey will present our financial results and outlook, followed by Stephen with recent business updates. Then David will review our clinical progress in oncology and rare diseases. And then I will close by discussing our key value drivers. As you know, the second quarter is always light for seasonal vaccines. We generated revenue of $0.1 billion, which exceeded the top of our range. Our focus on financial discipline continued. We reduced cash cost by 10% in Q2 compared to the second quarter of 2025. We reported a net loss of $0.8 billion. We ended the quarter with $6.9 billion in cash and investments, maintaining a strong balance sheet while continuing to invest in our pipeline. Overall, I am pleased with our continued execution across the business. This team has done a great job to get us ready for the '26, '27 vaccination season, and our pipeline is progressing well.
During the quarter, we delivered several important updates across our pipeline. In our respiratory portfolio, our seasonal flu vaccine, mRNA-1010, received a positive recommendation from the U.S. VRBPAC. This represents another important milestone ahead of our August 5 PDUFA date and brings us one step closer to potentially making our flu vaccine available to patients. For our norovirus vaccine, mRNA-1403, following an interim analysis, we are preparing to enroll an additional cohort in its Phase III trial. In oncology, we are very pleased to present the 5-year Phase II update of Intismeran autogene in combination with KEYTRUDA in adjuvant melanoma at ASCO 2026, highlighting the continued durability of the clinical benefit observed on this program. We also presented important translation data that provides additional confidence in the mechanism of action of our individualized neoantigen therapy.
And finally, we're excited to announce that dosing has begun in 2 cancer antigen therapy programs. The Phase I/II study of mRNA-4194 in Lynch syndrome and the Phase I study of mRNA-4200 in solid tumors. Beyond our pipeline, we also had several notable corporate achievements during the quarter. We are pleased to expand our partnership with CEPI to explore the development of an Ebola vaccine, reinforcing our long-standing commitment to global health security and pandemic preparedness. We were also honored to be named the world's most impactful company by TIME Magazine, recognizing our pioneering work in mRNA science. This recognition reflects both the global impact we made during the pandemic and our continued effort to advance a broad pipeline of innovative medicine and expand access to mRNA technology worldwide. Turning now to our leadership team. I'd like to highlight 2 important appointments we announced this quarter.
As we continue to strengthen Moderna for the next phase of growth, I'm very pleased to welcome Ester Banque as our new Chief Commercial Officer. Ester joined us with more than 30 years of commercial leadership experience and an outstanding track record of leading high-performing organizations across the health care industry. More recently, she led U.S. operations at Zoetis and before that, held several commercial leadership roles at BMS and Novartis, where she helped bring important medicines to patients around the world. Ester now leads our global commercial organization as we prepare for multiple launches and continue expanding into new markets. We are delighted to have Ester join Moderna and have been enjoying working closely with her. I'm also pleased to welcome Michael McDonnell to Moderna's Board of Directors. Michael is familiar to many of you as most recently, he served as Executive Vice President and Chief Financial Officer of Biogen.
Michael brings more than 2 decades of public company CFO experience and deep expertise across finance, capital markets, Investor Relations and corporate governance. His experience across the life science and technology sectors will be a valuable addition to our Board as we continue to execute our strategy and create long-term value. We are delighted to welcome Michael to Moderna's Board. With that, I will now turn to Jamey.
Thanks, Stéphane, and hello, everyone. Today, I'll start with our second quarter financial results and then review our updated financial framework for 2026. Let me start with our commercial performance. For the second quarter, total revenue was $145 million, above the guidance range we provided on the first quarter call. Our geographic mix for the quarter was 60% U.S. and 40% international. For the first half of the year, total revenue was $0.5 billion with 31% from the U.S. and 69% from international markets. Our long-term strategic partnerships drove the strong international contribution during the first half. Overall, we are pleased with our first half performance and are reiterating our expectation for revenue growth of up to 10% in 2026. We continue to expect a roughly 50-50 split between U.S. and international revenue for the full year, and we expect third quarter revenue will represent approximately 55% of our second half revenue.
Now let me turn to our second quarter financial performance on Slide 10. As I just mentioned, revenue was $145 million in the quarter, up 2% from the prior year. Cost of sales for the quarter was $93 million, a 22% decrease compared to the prior year, primarily driven by lower unutilized manufacturing capacity costs as we continue to improve our manufacturing efficiency. R&D expenses for the quarter were $651 million, a 7% decrease compared to last year. The decline was driven by lower clinical development costs following the wind down of several late-stage programs. SG&A expenses for the quarter were $216 million, down 6% from last year, reflecting continued cost discipline across the organization. Our income tax provision was immaterial in both periods as we continue to maintain a global valuation allowance, which limits our ability to recognize tax benefits from losses. Net loss for the quarter was $782 million, improving by $43 million or 5% compared to last year.
Loss per share was $1.97 for the quarter compared to $2.13 last year. We ended the quarter with cash and investments of $6.9 billion compared to $7.5 billion at the end of the first quarter. The decrease primarily reflected cash used to fund operations as we continued to invest in R&D and advance our pipeline. In July, we paid $950 million related to the litigation settlement announced earlier this year, which will be reflected in our third quarter cash balance. Now let's turn to our financial framework for 2026. We still expect total revenue to grow up to 10% in 2026 with the geographic mix and quarterly phasing I previously mentioned. Our 2026 revenue guidance factors in potential future declines in COVID vaccination rates and continues to assume no revenue from mFLUSIVA and mCOMBRIAX. We are lowering our cost of sales projection by $0.1 billion to $1.7 billion, reflecting additional manufacturing efficiency gains.
The $1.7 billion estimate includes $0.9 billion of expense related to the previously announced litigation settlement charge. We are also lowering our R&D expense estimate by $0.1 billion to $2.9 billion due to operational efficiencies. SG&A expenses are still expected to be approximately $1 billion, flat versus the prior year. Similar to 2025, our commercial spend will be more heavily weighted to the second half of the year due to the seasonality of our business. In aggregate, excluding the $0.9 billion litigation charge, we are expecting total GAAP operating expenses of $4.7 billion and $4 billion of cash costs, which excludes stock-based compensation, depreciation and amortization. Each reflects a $0.2 billion improvement compared to our previous guidance. We expect taxes to be negligible in 2026. Capital expenditures are still projected to be between $0.2 billion and $0.3 billion. Cash and investments are now projected to be between $4.7 billion and $5.2 billion at the end of 2026, which reflect the improvement in our cash cost guidance. As a reminder, our cash guidance does not assume any additional drawdown from our remaining $0.9 billion undrawn credit facility. With that, I will now turn the call over to Stephen.
Thank you, Jamey, and good morning or good afternoon, everyone. Today, I'll take you through our recent business updates. Slide 13 outlines our multiyear revenue growth strategy, anchored in geographic expansion and portfolio expansion from the continued advancement of our product pipeline. For 2026, we continue to expect revenue growth of up to 10%, driven by our long-term strategic partnerships in the United Kingdom, Canada and Australia and supported by the continued growth of mNEXSPIKE. Looking across the 3-year horizon, we are building toward a broader and more diversified portfolio, including flu, our combination flu and COVID vaccine and norovirus as well as late-stage programs in oncology and rare disease, while continuing to expand our global commercial footprint. We're making tangible progress against this strategy, and mNEXSPIKE is now approved in Japan and Taiwan. Our flu program received a unanimous recommendation from the VRBPAC FDA Advisory Committee, and we signed a joint procurement contract with the European Commission for up to 24 million doses of mRESVIA across 6 countries.
We also received approval for mRESVIA in Mexico and a label expansion for the product in Australia. In Latin America, we advanced our strategic partnership in Brazil by signing an agreement with a local manufacturer to support our multiyear COVID vaccine supply agreement with the government. Finally, as our commercial portfolio expands, emerging real-world evidence strengthens the support for our respiratory portfolio. Slide 14 highlights our approved infectious disease portfolio and several recent updates across the products. Starting with COVID, health authorities in the United States and Europe have selected the XFG strain for the '26, '27 season, and we are updating both Spikevax and mNEXSPIKE to target this strain for the upcoming vaccination season. For Spikevax, we also recently published a real-world evidence study. A link to the study is included on this slide. And mNEXSPIKE is now approved in the United States, Europe, Canada, Australia and as mentioned earlier, now in Japan and Taiwan.
Additional filings are planned for the second half of 2026. We also published a real-world evidence study evaluating the adjusted vaccine effectiveness against COVID-related hospitalization during the most recent 2025, 2026 season, which I will discuss in more detail shortly. Turning to mRESVIA, which is approved in 44 countries. Most recently, it was approved in Mexico for all adults aged 60 and older as well as high-risk adults aged 18 to 59. We also received a label expansion in Australia to include high-risk adults aged 18 to 59. In addition, a real-world evidence study evaluating vaccine effectiveness against hospitalization and associated with RSV-related acute respiratory illness was published for mRESVIA. Finally, mCOMBRIAX is now approved in the European Union and is under review in Canada, Australia and most recently, Japan. In the United States, we are awaiting approval of our stand-alone flu vaccine before seeking further guidance from the FDA on next steps for refiling the combo here.
Slide 15 highlights the emerging real-world evidence supporting mNEXSPIKE's clinical profile. As a reminder, during its first season on the market in 2025, 2026, mNEXSPIKE captured approximately 24% of the total U.S. retail COVID vaccine market. Uptake was particularly strong among older adults with mNEXSPIKE accounting for approximately 34% of the retail market among individuals aged 65 and older. This market uptake was supported in part by the Phase III head-to-head data of mNEXSPIKE versus Spikevax. The subsequent real-world analysis evaluated adjusted vaccine effectiveness against hospitalization with documented COVID-19 during the 2025, 2026 season. Among adults aged 65 and older, vaccine effectiveness was approximately 59% for mNEXSPIKE compared with a matched unvaccinated cohort. Among adults aged 75 and older, it was approximately 67%. These estimates were numerically higher than those observed for a competitor vaccine in separately matched analysis.
While this real-world study was not designed as a head-to-head comparison, the numerical differences are encouraging, particularly when considered alongside the vaccine efficacy observed for mNEXSPIKE versus Spikevax in the Phase III head-to-head trial. Taken together, the strong initial market uptake and the emerging real-world evidence highlight mNEXSPIKE's potential, particularly among older adults. Turning now to our late-stage infectious disease pipeline. Starting with flu, we are grateful for the unanimous VRBPAC recommendation for mRNA-1010 and look forward to the potential for approval with the PDUFA date of August 5 in the United States. mRNA-1010 is also under review in the European Union, Canada and Australia. The efficacy and safety results from our Phase III study were recently published in the New England Journal of Medicine. A link to the publication is included at the bottom of the slide.
For our norovirus vaccine, mRNA-1403, the Phase III study did not meet the statistical criteria for early success at its interim analysis. The study remains blinded as we now prepare to enroll an additional fourth cohort. With that, I will now turn the call over to David, who will provide a more detailed update on our oncology and rare disease pipelines.
Thank you, Stephen. Before I begin the review of our oncology and rare disease pipeline, I want to take a moment to say how excited I am to be here. Before joining Moderna, I followed the company's oncology portfolio and Intismeran in particular, very closely. The strength and potential of the pipeline were an important part of what attracted me to the Chief Development Officer role. Since joining the company and spending time with the teams, I have become even more impressed by the quality of the science, the depth of the programs and the opportunities ahead of us. With that, let me take you through the progress we are making across our oncology and rare disease pipeline. Starting with Intismeran, our individualized cancer therapy developed in partnership with Merck, the program continues to advance across a broad portfolio of 9 Phase II and Phase III studies. In adjuvant melanoma, the Phase III study is fully enrolled, and we look forward to the interim analysis in 2026.
At ASCO, we presented the 5-year update from the Phase II study of Intismeran in combination with KEYTRUDA in the adjuvant melanoma setting as well as translational data demonstrating the induction of de novo neoantigen-specific T cells following treatment. A link to our ASCO investor event presentation is on the bottom of this slide. Our Phase III development program also includes studies in adjuvant non-small cell lung cancer, including a Phase III study in patients without a pathologic complete response following neoadjuvant therapy as well as the recently initiated Stage I study evaluating Intismeran, both as monotherapy and in combination with KEYTRUDA QLEX. Across the Phase II portfolio, the adjuvant renal cell carcinoma and muscle invasive bladder cancer studies are fully enrolled and continue to accrue events. We are often asked when we expect these studies to read out. Because both studies are event-driven, it is difficult to predict the timing with precision.
The renal cell carcinoma study has been fully enrolled since the second quarter of 2025. So it is possible that the threshold for the analysis could be reached this year. However, it is also possible that this occurs next year. It depends on the pace of event accrual. The muscle invasive bladder cancer study completed enrollment earlier this year, and we currently expect the readout to be more likely in 2027, again, subject to the timing of event accrual. Non-muscle invasive bladder cancer study continues to enroll. As a reminder, this trial is evaluating both Intismeran with BCG in combination as well as Intismeran monotherapy. Beyond the late-stage portfolio, our Phase I studies in adjuvant pancreatic cancer and perioperative gastric cancer are also fully enrolled, and we look forward to sharing data from these programs as they mature. Taken together, the breadth and continued execution across the Intismeran program reflect our commitment to evaluating this therapy across multiple tumor types and stages of disease.
Outside of Intismeran, we continue to advance a broad portfolio of oncology programs across cancer antigen therapies, T-cell engagers and cell therapy enhancement. mRNA-4359 is in a Phase II program in first-line metastatic melanoma and second line or later metastatic melanoma. It is also being evaluated in first-line metastatic non-small cell lung cancer. We are also advancing 2 additional cancer antigen therapies, mRNA-4106 and mRNA-4200 in a Phase I study in patients with advanced solid tumors. I'm pleased to report that dosing has now begun with mRNA-4200 alongside the ongoing evaluation of mRNA-4106. In addition, mRNA-4194 has entered clinical development with dosing now underway in a Phase I/II study in individuals with Lynch syndrome. This program is designed to evaluate the potential of our technology in an earlier cancer interception setting. Our T-cell engager, mRNA-2808, also continues to advance in a Phase I/II study in multiple myeloma with patients actively dosing.
Finally, in collaboration with Immatics, dosing continues in the Phase I study of mRNA-4203 in combination with the anzu-cel cell therapy. These programs demonstrate the breadth of our oncology pipeline and the continued progress we are making across several distinct therapeutic approaches. Moving now to Slide 20. In rare diseases, our propionic acidemia or PA program is fully enrolled in its registrational study, and we expect data from the study in 2026. For our methylmalonic acidemia or MMA program, as mentioned last quarter, we have deferred our decision on a pivotal trial until the PA readout. With this review, I will hand it over to Stéphane.
Thank you, David, Stephen and Jamey. Looking at the second half of the year, on the commercial and financial side, we remain on track for up to 10% revenue growth this year and also remain committed to improving our operational efficiency and achieving our new lowered cash cost guidance of approximately $4 billion. We also expect to build on last year's success mNEXSPIKE launch and to continue expanding across the COVID patients around the world. We look forward to approvals for mCOMBRIAX in Canada and Japan. And following the positive recommendation from the U.S. VRBPAC, we now look forward to the August 5 PDUFA date and potential approval of our seasonal flu vaccine in the U.S. We also anticipate approval for flu in Canada and Europe. From a pipeline perspective, oncology remains a key focus with important milestone ahead for Intismeran in multiple tumor types. As David said, our registrational study in PA, we expect data this year.
We have a busy second half of the year ahead of us. Success will come from disciplined execution across our key priorities, and I'm confident in our team's ability to deliver. We will be happy to host you in Cambridge or online for Analyst Day on November 12. Finally, I would like to thank our employees around the world for their continued commitment to our mission and for everything they have accomplished this quarter. With that, operator, we'll be happy to take questions.
Questions and answers
Our first question comes from Salveen Richter with Goldman Sachs.
Two questions for me. One is in the case that the Phase III Intismeran melanoma study passes the first interim and progresses to a second and/or final analysis, how should we interpret that in the context of powering an event accrual? And how detailed will your disclosure be? And the second question for me is if the trial is indeed positive here, how do we think about read-through to other tumor types like lung in the context of tumor mutational burden, but also the fact that you're talking about different neoantigens that play the key role there as you think about the cassette?
Thank you very much. There are a lot of questions. Regarding the Phase III, to answer your first question, if the Phase III INT study in melanoma continues, it continues. We haven't disclosed the statistical powering or the thresholds for early interim efficacy, so I won't address that further. As for a press release, I think it's too early; let's see the data and then we'll decide the exact wording. On your other question about read-through if Intismeran is positive, that is an important question I've given a lot of thought to. There are several things we need to see: one, the degree of efficacy; and two, whether we can validate the mechanism. With regard to that, the data we presented at ASCO confirm that when we give the neoantigen vaccine, we see neoantigen-specific T cells, and we know those T cells can kill the tumor. We have therefore moved into other tumors where checkpoint inhibitors work, and we know the mechanism I described is how those checkpoints act. Since checkpoint inhibitors work in lung cancer and bladder, that increases our confidence in bladder. The big question is in tumors where checkpoint inhibitors don't work, such as pancreatic cancer and, to a lesser degree, gastric cancer. That's why we're conducting Phase II trials and Phase I expanded trials in those other tumors.
And Salveen, maybe on your first question, just to fill in a little bit. As David said, we haven't disclosed the statistical analysis plan. But suffice it to say, it's an interim analysis, and there are still subsequent planned analyses. And ourselves with our partner, Merck designed the overall study to evaluate the full commercial profile of the product. And so we do think that there's a commercially valuable product that could emerge maybe only in the final analysis, but that wouldn't meet the criteria for early efficacy at the interim. And obviously, we'll move forward with the study accruing events to characterize that, but we do still see if there is an opportunity there.
Our next question comes from Tyler Van Buren with TD Cowen.
Another one on the Phase III melanoma INT readout. Forgive me, but I have to ask for more granularity on timing. How close are you to achieving all the events required for the first analysis? What percentage of events for the first analysis have been observed? And what's your level of confidence that we'll get the data readout this year?
Tyler, good to hear from you. So we're not going to disclose any more details around the specific timing aside from that it's second half in terms of powering. I think in terms of confidence, the fact that we had this very strong randomized Phase II data that had consistent efficacy in all the subsets was very promising to me. And the fact, as I mentioned, that the translational data confirms the mechanism of action. I don't think that there's anything else that can be done ahead of a randomized Phase III. And so that's what we're conducting.
Got it. And if it succeeds in the Phase III, do you expect standard review? Or is a priority review possible? And can you remind us what your capacity to treat patients would be on approval?
Yes. Priority review will always be subject to the data, but we certainly hope that if we're successful it will be under consideration and an accelerated review process would be possible. As David said, we are highly confident we'll get that data in the second half of this year or at least that an interim analysis will be conducted. If that is positive, and again we don't have the data yet, then we would obviously make the case for an accelerated review, and we think it will be supported by any profile that looks like Phase II. Now, as to commercial capabilities, we have been establishing manufacturing in Massachusetts in a dedicated facility that will be able to support launch. We believe that facility can support the commercial profile that we and our partner Merck have articulated for several years to come. We may have to build more in the future if there is more demand and all goes well. But we do believe we can satisfy the initial indication out of that facility and that we would be ready to go next year if all went perfectly to plan.
Our next question comes from Ellie Merle with Barclays.
Just 2 for me, one on flu and then one on INT. Just in terms of flu, I guess, curious if you've had any discussions with the FDA regarding strain selection for 2027. Specifically, if there's a mismatch in the selected strains in the beginning of the year with the circulating strains later in the year, would you be able to update your strains whereas the other flu vaccines wouldn't be able to? Basically, just curious if this came up at all in the discussions and how you're thinking about this as a potential possibility in 2027? And then just a second question, INT, interesting analysis on the immunogenicity that you presented at ASCO. Curious if there was any learnings in terms of how you think about the algorithm for the selection of the neoantigens since there seemed to be variability between patients in terms of the number of neoantigens that patients had immune responses for. So curious how you're thinking about that and potential ways that you could theoretically optimize the selection of the neoantigens.
Thank you for both questions. So I'll take the flu one and obviously have David take INT. So first, in terms of discussions with U.S. FDA, the answer is yes. Those have happened. In fact, they even happened at the advisory committee. And so there was active discussion both between the agency, the committee members as well as the company on how we would address a potential mismatch or a late strain selection. Our demonstrated capability in the COVID context is less than 2 months. And so strain selections have happened as late as early July in the history of COVID, and we've been able to make a fall vaccination season work with millions of doses. And that was discussed at the VRBPAC and obviously had been part of the basis for pursuing accelerated approval in our discussions with the agency. Now the process by which that would happen would ultimately fall to public health to articulate. And so FDA, CDC, WHO, others would need to accommodate a late strain selection if they wanted to. And those discussions I would describe as in their early stage. The first step is to get the product approved so there's a potential to address such a situation. And then the second step is to work closely with public health to define how we would do that and under what circumstances they would want us to do that.
Ellie, regarding your second question, that's a very interesting question. We see that about 29% of the neoantigens we include in our cassettes are immunogenic. In the patients we showed, there were between one and eighteen neoantigens that were reactive in each patient. The good news is you only need one neoantigen-reactive T cell to have activity; in theory, the more the better. To improve this, we have an ongoing program to refine the algorithm, and we're using artificial intelligence to develop the next-generation algorithm. I think the key milestone will be obtaining an efficacy readout that links our algorithm to clinical efficacy; that will be the next important step.
Our next question comes from Terence Flynn with Morgan Stanley.
Great. Maybe just on your flu vaccine. I was wondering if you could provide any update in terms of your thoughts on potential pricing, either some of the inputs or how you're thinking about analogs there? And then on the norovirus interim, just any insight in terms of what that means for potential effect size?
Great. Thank you for both questions. First, on flu pricing, it is a little premature. Those conversations are ongoing and depend on us getting the product approved. Based on our own data, we feel confident about that profile given the relative vaccine efficacy demonstrated in the Phase III trial published in the New England Journal versus the standard dose, and we view it as an enhanced option. Importantly, it offers features, such as the lack of egg adaptation, that are more specialized than some available therapies. We will assess the potential value from a health economic perspective and discuss with payers and other bodies to characterize those benefits as we consider pricing in the future. But the first step is to get the product approved, which we are working on now. As it relates to norovirus, there is not much more I can say because we are still in the blinded phase and the study is continuing. We have not previously disclosed the statistical analysis plan, so it would be inappropriate to do so now. Suffice it to say that we know we will need additional cases from a further cohort to strengthen the statistical analysis, and we are working hard to prepare to stand up that part of the study.
Our next question comes from Cory Kasimov with Evercore ISI.
I wanted to also ask on Intismeran, but on the RCC front. And can you speak to the immunogenicity data that you have that kind of gives you confidence that Intismeran works as well in low TMB RCC as what you've seen so far in melanoma and non-small cell lung cancer?
So that trial is still ongoing. So we don't actually have that data yet. But we will be showing some data later this year on other tumors that are hard to treat. And I think the fact that we can demonstrate immunogenicity in, for example, pancreatic cancer, I think, leads us to believe that we can identify neoantigens and create a neoantigen vaccine for RCC as well. I think we have confidence in that.
And I think the one thing I'd add is at least in the context of our Phase II melanoma study, which is now through 5 years, we had previously published or presented that TMB did not correlate with the difference. In fact, a low TMB adjuvant melanoma patients had a consistent hazard ratio as those with high. So it gives us some reason to believe that, that will translate, but to be fair, that is in the melanoma context. And as David said, we're still waiting for data in other histologies.
Our next question comes from Andrew Tsai with Jefferies.
So, thinking about your clinical Horizon 2 wave of assets coming, first, for the IDO compound it sounds like that could have pivotal data in 2027 since you mentioned it as a revenue contributor in 2028. Can you talk about the approvable bar for first-line and second-line melanoma? You also have a T cell engager program announced at Science Day that I believe could have data by year-end. In a seemingly refractory population, what would positive data look like in myeloma, and is there a strategy to move upstream?
Thank you, Andrew. I'm glad you mentioned Horizon 2. 4359, our IDO PD-L1 program, is very interesting. A randomized study from another company provided encouraging proof of concept. We also saw intriguing data that we presented last year and followed up with a first-line dataset earlier this year. What we're doing now in the ongoing Phase II expansion is confirming that signal. Is the signal real, and is there a path forward based on it? I don't want to get ahead of whether it will be pivotal. First we need to confirm the signal and identify the best opportunity in melanoma: first line or second line and beyond. As you noted, the approval bar for single-arm studies in second line is a moving target. Generally you need to show sufficiently high response rates with adequate durability, but nobody can define exactly what "sufficiently high" is. In first line we have an ongoing combination with nivo/ipi, and we previously showed intriguing data with pembro plus 4359.
But in single-arm trials, especially first line, combining two active agents can make it hard to disentangle each agent's contribution. So we are asking if the combination can be given safely in first line and whether it shows increased activity. In second line PD-1 relapsed/refractory patients, we're looking for activity above what we'd expect, particularly durable responses in patients who progressed on prior PD-1s. We should have more to say on that next year. Regarding 2808, our T-cell engager program, this is also very interesting. Multiple myeloma already has a number of T-cell engagers, and this week J&J reported the first-ever combination of two T-cell engagers. For us, the exciting part is that we're studying the first product that contains three T-cell engagers. We're testing it in relapsed/refractory myeloma patients who have progressed after multiple CAR-Ts and multiple T-cell engagers—patients with essentially no other options.
We'll be assessing, first, whether we can produce a product with three engagers; second, whether it is safe and well tolerated; and third, whether we can observe complete or partial responses and how durable those responses are. That's what we're looking for, and I'm quite intrigued and excited about both programs.
Our next question comes from Courtney Breen with Bernstein.
Just a couple of other questions. I want to push a little further on norovirus and the update there. The question many of us are asking is whether this is an enrollment issue, an efficacy issue, or an event-driven situation. Can you help us understand the overall event rate relative to expectations and what might be driving it? Second, you've just announced a new Chief Commercial Officer and you have a broadening business, especially given the pipeline and the number of readouts over the next couple of years. What are the top priorities for the Chief Commercial Officer over the next six months? And what changes or longer-term evolution will be required in the commercial structure to support this evolving business?
Thank you. I'll take the first question and obviously turn it over to Stéphane to handle the second. First, on the question of noro, again, I'm limited in what I can say because the trial remains blinded. But suffice to say, we are going forward with another season this year. We have been able to enroll the trial cohorts, but the epidemiology of the primary endpoint cases has been a little slower than expected. As we previously discussed, some of that in the first season for that trial was the result of a unique outbreak of a different set of strains of norovirus that were not contributing to that primary endpoint, so cases came a little slower in that season. For that reason, we were a little slower to achieve the interim analysis than we intended. We ultimately did, though, power the study for a final analysis with a full number of cases. What we're doing now is we've gone through that second season, been able to conduct the interim analysis, and are preparing for the third, which will be the third winter this year.
This has happened with other vaccines in the past — if you think about flu vaccines, they often have to do multiple-season studies to accrue sufficient cases — and it appears to have happened to us here. For that reason, we're getting ready to stand up new case accrual. It's unique in that we have to enroll new patients to get new cases because it's a seasonal vaccine for a seasonal infection. Ultimately, we expect to go one more season this winter for norovirus 1403.
Thank you, Stephen. So in terms of context, as we talked about in the press release when we announced the position of Ester. Basically, if you look at the business, as you know, we have 3 products on the market today. We have since the spring, a fourth product approved in mCOMBRIAX, the flu COVID combo, which we are preparing the launch for 2027. Potentially a fifth product approved in H2, which, of course, flu, as we talked about before. So as you can see, just what is just in front of us, there's a very, very large growing IV pipeline of product. And the other piece, as well as you know, is Europe. As you know, we have not been able to participate in the European market because of an exclusive partnership that the EU set up during the pandemic. But this partnership expires, as we said before, in 2026. So we really see Europe as a very important growth driver for us. And as you know, in Europe, the markets are all very, very different.
So there's a lot of complexity there. And then, of course, there is INT. As you know, we expect the Phase III data potentially in the second half of the year, given the trend. And so as you can imagine, Moderna and our Merck colleagues have been very active. Stephen talked about manufacturing a minute ago, but they have been very active on the commercial side of the house in terms of medical affairs, marketing, commercial. And so that's another piece where Ester is also going to be helping and leading, working hand-in-hand with Merck. And of course, there's also rare disease with PA. As you know, we said PA because it's a time-driven Phase III. We should have a data this year. Of course, its partners will recall our team, but we're going to be, of course, working with a partner to ensure a great launch. So if you look at the next few years, Stephen had a good slide earlier in the presentation, looking at the geographic expansion, including also in Asia and Latin America, the product expansion.
So there's a lot to do. And so as we are gearing for the growth stage of the company coming ahead of us, we feel that this role was important. And also the new role for Stephen, who is really overseeing IV, INT and rare from a kind of a general management to make sure that all the functions are integrated together. So it's just us getting ready for the next stage of growth of the company that's exciting.
Our next question comes from Michael Yee with UBS.
We have 2 questions. First is on INT for David or Stephen, at the interim analysis, while you're not going to disclose the powering, if you go back to your Phase IIb, it was statistically significant, but you were using a one-sided alpha of 0.1. And so that's a much different hurdle rate than, say, traditional interims that you might be using here. So to what extent that people have too high expectations for the interim versus the final where you could have a nonproportional hazard ratio where the effect size gets better over time due to the way the drug works. That's question number one is the thought around the effect size getting better over time and a nonproportional hazard ratio. The second question is on the COVID flu combo in Europe. Can you just remind us at what point you engage in conversations to do contracting for that? Because I guess you could have actually revenues for that in '27 and when we get visibility on that?
Michael, I'll take the first question. We are not going to disclose anything about the statistical analysis plan, but I do think there are maybe two key points to highlight. The first is, if you remember back to the Phase II study, which was updated at ASCO, there was, as you said, somewhat of a nonproportional hazard with about 12 months before a really strong separation occurred. The good news in the Phase III study, which was designed with Merck, who has a lot of expertise in melanoma, is that it also requires a minimum of 18 months of follow-up. So every patient has been followed well beyond where the separation occurred, and I think that gives us increased confidence.
Yes. On the question of the combo in Europe and negotiations: with approval, we can start pricing negotiations with many governments where that is a separate process. In most cases, we have submitted HTA documents as health technology assessments, so the supporting pricing negotiations are underway. In some countries, you need recommending bodies analogous to the CDC to issue recommendations before engaging in that process, and we have been supporting those. Some of that has been public, for example recommending bodies in countries like Germany where STIKO and others have begun to contemplate the combo vaccine. In other countries we have begun pricing negotiations. There are first instances of pricing being issued in a couple of countries, and we will continue that process through this year. Once that's done, we will have achieved market access and then begin engaging in tenders, or, in countries that are not tender-based, straightforward commercialization.
About half of those markets will be more tender-related. Some tenders will pertain to 2027 and some to 2028 because of the timing of flu or COVID tenders, which may be a year forward. We will provide more clarity as we get into those years. We expect some contribution from traditional commercialization markets as well as tender markets beginning in 2027, but the full effect probably will not be felt until 2028 and maybe a bit beyond, depending on what individual countries require in terms of real-world effectiveness data or other post-approval evidence to support market access. We are excited to be approved; we have a lot of work to do in Europe to drive that growth. We think there is real enthusiasm for the product, and we are working hard to start impacting as early as 2027 while building the business over the following couple of years.
Our next question comes from Geoffrey Meacham with Citigroup.
I just have a couple of quick ones. I guess for Jamey, the 10% revenue growth guidance for the balance of the year, maybe just give us a reminder of the puts and takes of that when it comes to different geographies. Are there still more contracts or more sources of potential new pockets of demand? And then on the rare disease portfolio, you guys have completed enrollment in 3927. Just wanted to get a sense for what determines the timing, maybe the regulatory usability of the readout. I wasn't sure what you guys are looking for from an effect size or from a clinical meaningful standpoint.
Yes. Thanks, Geoff, for the question. I'll take the first one on revenue. We're sitting pretty well after the first half, with about $0.5 billion in revenue, roughly 70% international and 30% in the U.S. Your question is where the upside and variables for the second half lie. To start, compared with the prior year we are up almost $300 million in the first half, so if we are flat in the second half that would still put us above 10% growth for the year. As for the variables, we expect the full year to be roughly 50-50 U.S. versus international. Because the first half skewed more international, the second half will skew more to the U.S., and that is the biggest variable. Globally, we've basically contracted and now need to execute. There are some countries with lower vaccination rates where shipments could occur this year or be pushed into the first quarter of next year, but that is relatively small.
The biggest variable is the U.S. As I mentioned in my prepared remarks, we have already provided for a decline in vaccination rates, particularly in the U.S. The largest upside would occur if the decline is smaller than we projected; conversely, if it is worse, there would be downside. Broadly speaking, in the second half last year we had no U.K. volume and were missing some strategic partnership volumes. This year we will supply some of those strategic partnerships, which is quite material and offsets the provision we built into the U.S. for vaccination rate decline. Overall, we are confident after substantial growth in the first half. If we are flat to last year with international growth offsetting the U.S. decline, we should be above our 10% guidance. The biggest variable remains the size of the U.S. market.
With regard to the question on PA, at this time about 20 patients have been enrolled and the primary endpoint, which is metabolic decompensation events on treatment relative to pretreatment, with each patient serving as their own control, is based on a 12-month follow-up. That should occur sometime in the fourth quarter. And just as a reminder, in our prior releases we showed about 60% to 80% efficacy with our therapy, which is why we have confidence and hope for this trial.
Our next question comes from Myles Minter with William Blair.
Congrats on the quarter. My question is just one on clarification. I think Dr. Carlino at ASCO mentioned in INTerpath-001 that approximately 2/3 of patients would have micrometastatic disease. It's a little bit confusing to me as to whether that was just restricted in the Stage III patients, so that was the overall trial. So just wondering whether you can confirm or adjust his comments that are said on record. And then secondly, just the potential impact of going from 1/3 micrometastatic in the Phase I/II study to 2/3 in INTerpath-001 and any sort of impact that we could see there?
So I don't recall exactly what he was referring to in that statement. But we haven't released the baseline demographics of the trial. Essentially it's to say that it's Stage IIB to fully resected Stage IV. In terms of why we believe we can go to that broad eligibility based on the Phase II data, it's because when you look at the subsets from an efficacy standpoint, they were all consistent. And secondly, we know that the earlier you go, i.e., Stage IIIA and then Stage IIB and IIC, the immune system should be healthier and the tumor burden should be even lower. So the ability to induce a T-cell response and to have those T-cells kill, whether it's micrometastatic or even before it's micrometastatic, should still be there. So I think that's what I would say. I'm not sure; I don't remember exactly the point about two-thirds micrometastatic.
The last question comes from Jessica Fye with JPMorgan.
Just wanted to confirm 2 things on INT. First, if the interim in the Phase III adjuvant melanoma trial passes without stopping for efficacy, how will the Street learn about that? I guess, is the study simply continuing a material event that we would hear about right away? Or would we just hear about that maybe later in normal course updates? And then the second one on INT is the translational poster at ASCO had a relatively small number of patients relative to the number who were in the Phase II. I'm curious if you know what the data looked like in the broader study population.
So we will be issuing a press release on that data, Jess, for the interim. And with regard to the second question, the reason that the data set on the translational was only 7 patients is because that in-depth T-cell antigenicity required leukapheresis, which is a little bit more burdensome to the patients than just collecting a tube of blood. And so the patients have to consent to that. So the patients have to consent to that. And so we do hope to expand that because we do think that, that degree of biomarker analysis is important for understanding the mechanism of the drug. And actually, we're also looking at ways and we're exploring ways to try and disentangle T-cell immunogenicity without having to do leukapheresis. So that's still exploratory, but more to come on that. That's the reason why there were only 7 patients.
This concludes our Q&A session. I'd like to turn the call back to Stéphane for any remarks.
Thank you very much, everybody, for joining. We look forward to speaking to many of you in the coming days and weeks, and have a great day and weekend. Bye.
Ladies and gentlemen, this does conclude today's presentation. We thank you for your participation. You may now disconnect, and have a wonderful day.