Summary of Key Points from the Conference Call Industry Overview - The focus is on the **China Healthcare** industry, particularly the demographic of the **'silver' population** aged 50 and above with significant spending power, defined as having a net worth greater than **Rmb3 million** [3][16]. Core Insights - The **Total Addressable Market (TAM)** for the 50+ >Rmb3 million NW cohort is projected to grow from **Rmb221 billion (US$31 billion)** in 2024 to **Rmb963 billion (US$135 billion)** by 2035, representing a **CAGR of 14.3%** [3][17]. - In 2024, this cohort will account for **3%** of the overall 50+ population but will contribute **5%** of its healthcare spending, expected to rise to **13%** by 2035 [3][17]. - The healthcare needs of this demographic are anticipated to increasingly align with the **out-of-pocket (OOP)** market, with OOP payment share projected to reach **86%** by 2035, up from **65%** in 2024 [3][20]. Key Stocks and Their Positioning - **Aier Eye Hospital**: Upgraded to **Buy**; expected growth in high-end cataract surgeries and improved average selling prices (ASP) due to new technologies [4][12]. - **Eyebright**: Positive outlook on premiumization trends in intraocular lenses (IOL) post VBP, with increasing uptake for OOP cataract surgeries [4][12]. - **Zhifei**: Upgraded to **Buy**; anticipated rebound in vaccine sales despite below-expectation results in 2024 [4][12]. - **Topchoice**: Neutral rating; improving visibility on growth in dental implants with resilient demand [4][12]. - **Straumann**: Buy rating; expected sustained growth in China, benefiting from the 50+ >Rmb3 million NW cohort [4][12]. Demographic and Economic Insights - The 50+ >Rmb3 million NW cohort is expected to grow from **15 million** in 2024 to **29 million** by 2035, representing **5%** of the total 50+ population [16][17]. - This demographic has a net worth approximately **twice** that of the urban average, with higher annual healthcare expenditures [16][17]. - The average annual healthcare expenditure per capita for this cohort is projected to increase from **Rmb15,000** in 2024 to **Rmb34,000** by 2035 [17][22]. Emerging Trends and Technologies - The report highlights the potential of emerging healthcare technologies such as **brain implants, genome medicines, and robotics** to further drive OOP spending [3][20]. - The shift towards OOP spending is becoming a critical component of the healthcare payment system, especially for high-end pharmaceuticals and medical consumables [18][20]. Conclusion - The healthcare spending landscape in China is poised for significant growth, particularly among the affluent 50+ demographic, driven by increasing demand for high-quality healthcare services and a shift towards OOP expenditures. The identified stocks are well-positioned to capitalize on these trends, making them attractive investment opportunities.

Healthcare Sector Performance - Healthcare sector is negative YTD and second worst performer for Q2, behind energy [1] - UnitedHealth Group (UNH) is a significant drag, down 42% since April [1] Vaccine Advisory Committee - RFK's vaccine advisory committee is voting on the RSV vaccine and flu shot [1] - ACIP voted 5 to 2 to recommend Merck's RSV shot for newborns [2] - Concerns were raised about the safety of the immunization, leading to debate [2] - Panel will vote on flu shots, including those containing thimerosal [2] - Thimerosal is a preservative in multi-dose vaccine vials, a focus of vaccine skeptics due to mercury exposure fears [3] - New chairman announced two new work groups: one to review the childhood vaccine schedule, and another to review vaccines not reviewed in over seven years [3][4]

Summary of Moderna (MRNA) Update / Briefing June 16, 2025 Company Overview - **Company**: Moderna (MRNA) - **Focus**: Oncology pipeline and commercial strategy Key Points on Oncology Pipeline 1. **Oncology as a Key Focus**: The company emphasizes the importance of oncology in its future development, with a focus on individualized therapies and cancer antigen therapies [3][4] 2. **Lead Program - Intisiran Auto Gene (INT)**: This individualized neoantigen therapy has shown a 49% reduction in the risk of recurrence or death in a Phase 2 study for adjuvant melanoma, with pivotal study data expected in 2026 [7][39] 3. **Expansion of INT**: The company is exploring INT in various cancer settings, including combinations with pembrolizumab and as a monotherapy [7][8] 4. **Off-the-Shelf Cancer Antigen Therapies**: These therapies are designed for broader patient use and are currently in development, with lead programs mRNA-4106 and mRNA-4359 targeting specific tumor antigens and training the immune system [10][11] 5. **T Cell Engagers**: The company is developing multiplexed T cell engagers that can target multiple proteins on cancer cells, enhancing the immune response [16][17] 6. **In Vivo Cell Therapies**: Moderna is pursuing innovative approaches to enhance the efficacy of cell therapies, including engineered T cells that can be modified within the patient's body [20][24] Clinical Development and Data 1. **Phase 2 and Phase 3 Studies**: The company is preparing for Phase 3 trials based on encouraging Phase 2 data, with a focus on event-driven trial designs [34][40] 2. **Control Arm Performance**: The performance of the pembrolizumab control arm in Phase 2 is reported to be in line with historical data, addressing investor concerns about patient allocation [32][36] 3. **Safety and Tolerability**: The safety profile of mRNA-4359 and INT is favorable, with low-grade adverse events and no dose-limiting toxicities reported [15][62] Market and Competitive Landscape 1. **Partnerships and Collaborations**: Moderna is closely monitoring competitive developments, including BioNTech's recent acquisition of CareVac and their oncology programs [78] 2. **Regulatory Environment**: The company is navigating a changing political landscape that affects vaccine development and approval processes, particularly in the context of COVID-19 and RSV vaccines [82][86] Financial Guidance and Market Outlook 1. **Revenue Guidance**: Moderna has provided a broad revenue guidance range of $1.5 billion to $2.5 billion for the year, considering potential declines in vaccination rates and other market factors [96] 2. **Future Approvals**: The company is optimistic about upcoming FDA approvals and the potential for expanded indications for its vaccines, particularly for high-risk populations [85][89] Additional Insights 1. **Combination Therapies**: The company is exploring combination therapies with checkpoint inhibitors and other agents, aiming to enhance overall response rates and progression-free survival (PFS) [65][66] 2. **Clinical Trial Design**: The design of clinical trials is being carefully considered, with a focus on achieving statistically significant outcomes that can support regulatory filings [50][52] This summary captures the essential points discussed during the call, highlighting Moderna's strategic focus on oncology, clinical development progress, market positioning, and financial outlook.

Core Insights - Moderna's stock has experienced a decline of over 80% in the past year, primarily due to reduced vaccine sales and a disappointing outlook [1][2] - The company reported a significant drop in revenue, with a decrease of 83% from $18.9 billion in 2022 to $3.1 billion over the last twelve months [3] - Moderna's narrow product portfolio has made it vulnerable to demand fluctuations, especially as it transitions from a pandemic-driven market to a seasonal vaccine market [5][7] Financial Performance - Moderna's operating income over the past four quarters was -$3.7 billion, resulting in an operating margin of -118.8% [6] - The operating cash flow during the same period was -$3.1 billion, indicating a low cash flow margin of -97.2% [6] - The company's sales forecast for 2025 was cut by $1 billion, and the break-even target was delayed by two years due to development setbacks [4] Market Transition - The demand for Moderna's COVID-19 vaccine has significantly decreased as the pandemic has shifted to an endemic stage, impacting sales [2][7] - The company is attempting to diversify its revenue sources, but the rapid decline in COVID-19 vaccine sales has outpaced its efforts to compensate for these losses [7] - Promising clinical trial results for a skin cancer vaccine exist, but its rollout is still years away pending regulatory approvals [5]

Company Overview - Moderna is focused on building a diverse portfolio of products utilizing mRNA technology, targeting areas such as infectious diseases, cancer, rare diseases, and autoimmune diseases [3]. Strategic Priorities - The company has outlined three main priorities for the year: 1. To drive sales through approved products, specifically COVID-19 and RSV vaccines [3]. 2. To launch new products to diversify and grow the top line, with up to 10 launches planned over the next few years and several Biologics License Applications (BLAs) already filed [4]. 3. To resize the company from a cost perspective in response to the transition from pandemic-related sales [4].

Financial Data and Key Metrics Changes - Q1 revenues were $100 million, with a net loss of $1 billion, reflecting the seasonal nature of the respiratory vaccine business [6][12] - Cash and investments at the end of the quarter totaled $8.4 billion, down from $9.5 billion at the end of Q4 [16] - R&D expenses decreased by 19% year over year to $856 million, driven by lower clinical development spending [14][19] - SG&A expenses were $212 million, down 23% year over year, reflecting broad-based cost reductions [15] Business Line Data and Key Metrics Changes - Net product sales were $86 million, primarily from COVID vaccine sales, with the U.S. accounting for about one-third of total sales [12][13] - Total revenue for the quarter was $108 million, a decrease of 35% year over year [13] - Cost of sales was $90 million, representing 104% of net product sales, up from 58% in the prior year [14] Market Data and Key Metrics Changes - Lower vaccination rates were observed compared to Q1 last year, indicating a transition of COVID into routine seasonal vaccination patterns [13] - The company expects total revenue in 2025 to be in the range of $1.5 billion to $2.5 billion, with first-half sales of approximately $200 million [17] Company Strategy and Development Direction - The company is focused on three priorities: expanding markets for commercial products, advancing its pipeline to drive sales growth, and executing with financial discipline [7][39] - The oncology portfolio is being expanded with the Checkpoint Medicine program, and the company aims to drive sales for approved products [8][39] - A commitment to achieve a breakeven target on a cash cost basis by 2028 has been established, with plans for significant cost reductions by 2027 [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing need for COVID vaccination, particularly in the upcoming fall season, despite the competitive market environment [52] - The company remains engaged with the FDA and anticipates continued productive exchanges regarding its product approvals [51] - The management is optimistic about the potential for new product approvals and the impact on sales growth [41][42] Other Important Information - The company plans to reduce annual GAAP expenses by over $6 billion from 2023 to 2027, representing a 55% reduction [22] - The Phase III FRU program has exceeded the required number of case accruals for an interim vaccine efficacy analysis [9] Q&A Session Summary Question: Comments on FDA interactions and potential risks to the vaccine business outlook - Management noted that interactions with the FDA have been productive and ongoing, with a focus on providing necessary data for product reviews [51][52] Question: Update on INT Phase III data expectations - Management believes that a 2026 readout for the Phase III melanoma study is still reasonable, pending event accruals [56][58] Question: Concerns about future market share changes in COVID revenue - Management indicated that script data shows a consistent market share of around 38%, and they are focused on managing working capital effectively [100][101] Question: Flu vaccine interim data expectations - Management did not provide specific guidance on total events for the flu vaccine analysis, stating that they will conduct the analysis once the season is over [105]

Financial Data and Key Metrics Changes - Q1 revenues were $100 million with a net loss of $1 billion, reflecting the seasonal nature of the respiratory vaccine business [7] - Cash and investments at the end of the quarter totaled $8.4 billion, down from $9.5 billion at the end of Q4 [16] - Net product sales were $86 million, primarily driven by COVID vaccine sales, with total revenue for the quarter at $108 million, a 35% decrease year over year [13][16] - R&D expenses were $856 million, a 19% decrease year over year, while SG&A expenses were $212 million, down 23% year over year [14][15] Business Line Data and Key Metrics Changes - The U.S. accounted for about one-third of total sales, with lower vaccination rates compared to Q1 last year due to the transition of COVID into routine seasonal vaccination patterns [12][13] - Cost of sales represented 104% of net product sales this quarter, up from 58% in the prior year, driven by lower volume and revenue mix [14] - The oncology portfolio was expanded with the Checkpoint Medicine program, which is expected to drive future sales growth [10][26] Market Data and Key Metrics Changes - The company received approvals for its vaccines in multiple international markets, including Australia, Taiwan, the UK, and Switzerland, enhancing its competitive position [9] - The company anticipates a total addressable market of over $30 billion for its upcoming product approvals [40] Company Strategy and Development Direction - The company is focused on three priorities: driving sales for approved products, advancing its late-stage pipeline, and delivering cost efficiency across the business [39] - The company plans to achieve significant cost reductions, targeting a cash cost of approximately $4.2 billion by 2027 to meet its breakeven target by 2028 [21][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing need for COVID vaccination, particularly in light of recent data showing high efficacy rates for their updated vaccine [53] - The company remains engaged with the FDA and continues to have productive exchanges regarding its ongoing product reviews [52] Other Important Information - The company is planning a total reduction in annual GAAP expenses of over $6 billion from 2023 to 2027, representing a 55% reduction [22] - The company is actively monitoring for additional cases of Guillain-Barré syndrome (GBS) in its trials and has lifted the clinical hold on its norovirus study [92] Q&A Session Summary Question: Comments on FDA interactions and potential risks to the vaccine business outlook - Management noted that interactions with the FDA have been productive and that they continue to see a need for COVID vaccination, especially among older Americans [52][53] Question: Update on INT Phase III data expectations - Management believes that a 2026 readout for the Phase III melanoma study is still reasonable based on historical event rates [57] Question: COVID strain selection process moving forward - The strain selection process will depend on guidance from regulatory bodies, with updates expected within the next month [75] Question: Concerns about future market share changes in COVID revenue - Management indicated that script data shows a consistent market share of around 38% and that inventory levels are being managed by customers [100] Question: Flu vaccine interim data expectations - Management did not provide specific guidance on total events for the flu vaccine analysis but indicated that a large number of cases are expected [105]